Positive Pertamina Refinery Progress

PT Pertamina (Persero) continues to record positive progress to complete the construction of a national refinery to meet the targets set. The project, known as the Refinery Development Master Plan (RDMP) and Grass Root refinery (GRR) megaprojects, continues to be accelerated to pursue national energy security and independence, which is marked by the stop of imports of fuel oil (BBM) in 2026.

Fajriyah Usman

    Pertamina Corporate Communication Vice President Fajriyah Usman stated, the RDMP and GRR megaprojects showed very significant developments at each stage of development. The East Kalimantan Balikpapan refinery, up to the quarter 1-2020, has reached 15.02 percent, and by the end of this year it is targeted to reach 40 percent.

Meanwhile, the Balongan Refinery in West Java and the Cilacap Refinery in Central Java are each targeting 10 percent this year and will continue to be accelerated according to the target stages of development. In the context of acceleration, Pertamina has carried out a number of works, such as jetty construction, site development, workshop and warehouse construction, construction of laboratory buildings and Health, Safety, Security and Environment (HSSE), as well as other supporting facilities, "said Fajriyah Usman

Fajriyah explained, Pertamina had also completed the procurement of the main equipment, which took a long time to ensure the project went on target. At present the main equipment is in the process of making or manufacturing. In addition, negotiations with business partners and investors also continued well.

A number of memorandum of agreement and business agreements have been signed between Pertamina and various parties, such as The Abu Dhabi National Oil Company (ADNOC), Mubadala, 

Rosneft, K-Sure, and so forth. Including negotiations with Saudi Aramco also continues which is targeted to be completed by the end of April 2020.

Balongan RDMP Project, divided into three Phases. The Balongan Phase 1 RDMP development is currently in the Dual FEED Competition (DFC) stage with two consortia, namely the RRE Consortium (PT Industri Industri, PT Teknik Engineering, and PT Enviromate Technology International) and the JSW consortium, including J GC Indonesia, PT Synergy Engineering, and PT Wijaya Karya.

This process is targeted to be completed in May 2020. For Phase 2, a Feasibility Study is currently underway and the ARDHM Unit Revamp Study is currently underway. While for Balongan RDMP Phase 3 (New Refinery and Petchem Complex West Java), the Feasibility Study will be conducted with partners and are in the location and land acquisition.

Progress of Balongan Phase 3, currently in the process of procurement of land and partnership, namely Pertamina and ADNOC have signed a Memorandum of Understanding (MOU) for the development of the Petrochemical Integrated Complex in Balongan, West Java. The Plaju refinery is currently entering into a BED Licensor procurement, and is starting the BED Work. Meanwhile, Dumai RDMP is in the stage of conducting a Bankable Feasibility Study (BFS) revisit tender.

"Meanwhile, Tuban GRR has been completed with the land acquisition process and is in the process of payment. Pertamina and Rosneft have even signed a Tuban Refinery design contract with selected contractors on October 28, 2019. At present the Basic Engineering Design (BED) and Front End Engineering Design (FEED) have begun.

Land Clearing progress has reached 90.08 percent and restoration progress has reached 46.40 percent. The progress of General Engineering Design (GED) has reached 6.22 percent.

"With the support of all parties, the construction of the refinery is expected to run smoothly and be completed according to the targeted time so that we can be sovereign energy," said Fajriyah.

When the COVid - 19 pandemic that hit the world, Pertamina delivered the good news of oil and gas production in the first quarter of 2020 which recorded an increase of two percent compared to the average production in 2019.

Pertamina Upstream Director, Dharmawan Samsu stated, oil and gas production in the first quarter of 2020 recorded 919 million barrels of oil equivalent per day (MBOEPD), an increase of two percent compared to the average production in 2019 of 901 MBOEPD.

In detail, oil production averaged 421 thousand barrels per day (MBOPD), while gas production reached an average of 2,887 million standard cubic feet per day (MMSCFD).

"By adjusting work systems and personnel to anticipate the Covid-19 pandemic, Pertamina is still working to keep oil and gas production in line with the targets in the RKAP. Until now, it has reached 99 percent of the target, "said Pertamina Upstream Director, Dharmawan Samsu.

Dharmawan added, positive performance also came from oil and gas field operations operating abroad through a subsidiary of PT Pertamina International EP (PIEP) which successfully contributed oil and gas production by 156 MBOEPD or 103 percent of the 2020 Quarter-1 target.

"This increase in production is mainly from field performance in Algeria," Dharmawan said.

Republika, Page-9, Wednesday, April 9, 2020

Early April, SKK Migas Decides the Rokan Block Investment Scheme

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is targeting an investment scheme in the transition period for the management of the Rokan Block to be decided in early April. One of the options is Chevron Indonesia as the existing operator to continue investing in the transition period.

Dwi Soetjipto

The Head of SKK Migas Dwi Soetjipto said that he and Chevron and PT Pertamina (Persero) as the new operators were still discussing investment options during the Rokan Block management transition. One of the options discussed was Chevron continuing its investment in the Rokan Block until the contract was completed in 2021.

the Rokan Block

This refers to the direction of the government through the Minister of Energy and Mineral Resources (ESDM) with the target of continuing investment to optimize the Rokan Block oil and gas production in the transition period.

"We are targeting the first week of April 2020 there has been a decision," he said.

Dwi briefly explained, initially, his side focused on encouraging business to business negotiations between Pertamina and Chevron regarding investments in the transition period. Originally, Pertamina was the one who would disburse funds and Chevron as the executor of its activities. However, this negotiation the call cannot continue. 

So, he continued, his party looked for other alternatives so that investment in the transition period would not cease. One other option is that investment will still be made by Chevron with the acceleration of investment cost recovery (cost recovery). However, proposals related to this option must be submitted by a contractor (KKKS) contractor, namely Chevron.

"So this is still being discussed quickly, what will it be like, and what Chevron [wants it] to be," Dwi said.

Previously, Chevron admitted there had been no more investment in the form of drilling activities in the Rokan Block since 2018 because the contract would soon be exhausted. This policy is likely to last until the contract expires.

Luhut Binsar Pandjaitan

Maritime and Investment Coordinating Minister Luhut Binsar Pandjaitan had also stated that Chevron would continue

investment in the Rokan Block. He has discussed this with the Ministry of Energy and Mineral Resources, SKK Migas, and Chevron in a video conference on Tuesday (17/3). This also keeps the production of the Rokan Block from falling significantly.

"Yesterday had a meeting with Chevron and SKK Migas and the Ministry of Energy and Mineral Resources. We agree that Chevron will continue this project until they are completed in August next year. So the decline in production can be put on hold not to be very drastic, it is a good decision, "he said.

Investor Daily, Page-9, Monday, March 30, 2020 

Oil and Gas Businessmen Review Work Plans

The oil and gas industry players began to review all work plans, in line with the weakening of world oil prices to levels below the US $ 30 per barrel, the lowest since 2016.

With conditions inevitably the upstream oil and gas sector must carry out various strategies, including efficiency measures in order to remain viable.

Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Fatar Yani Abdurrahman said that he continued to monitor developments in world oil prices, including proposals from the Cooperation Contract Contractors (KKKS). At present his party together with KKKS is still focused on existing production.

"We have prepared a policy, but we have not released it. What we see now is how the KKKS survive and profit and loss in the direct costs of production, "he said.

Based on Bloomberg data, at the beginning of this year, the price of West Texas Intermediate (WTI) oil reached US $ 61.18 per barrel until finally reaching the level of US $ 22.63 per barrel in trading Friday (20/3).

In line with that, Brent oil reached the level of US $ 66.25 per barrel at the start of 2020, until finally, it dropped to the level of US $ 26.98 per barrel in trading last week.

Meanwhile, on Thursday (March 26) until 14.32 WIB, WTI type oil prices for the May 2020 contract were exchanged Nymex is at the level of US $ 23.54 per barrel. Likewise with the price of Brent oil for the May 2020 contract on the ICE exchange corrected 0.83% to as low as the US $ 26.56 per barrel.

SKK Migas Deputy for Operations Julius Wiratno added, the weakening of world oil prices below the level of US $ 30 per barrel certainly had an effect on the performance of KKKS. For this reason, his party facilitated and tried to review massive efficiency measures, especially for KKKS that have high operating costs.

"We are discussing reviewing work programs that are not a priority so we immediately drop it," he explained.

Pertamina Hulu Energi's Managing Director Meidawati revealed that her office was reviewing all work plans and renegotiating the procurement of goods and services. 

    Not only that, but he also carried out efficiency related to operating cost budgets without disturbing costs associated with the health safety security environment (HSSE), costs that have a direct impact on production, as well as costs related to worker welfare.

"If oil prices are low, work plans can delay or cancel both exploration and development. What is clear is that we will prioritize the exploration and development drilling work plan whose risk is lower in the future, "said Meidawati.

For the production target, Pertamina Hulu Energi will continue to optimize its production activities so that this year's production target can be achieved despite the pressure.

"We will try our best. There are still 9 months to go, and we hope that all problems will end and the price of oil will return to the above US $ 50 per barrel, "said Meidawati.

POLICY PACKAGE

With the weakening of oil prices to below the level of US $ 30 per barrel, the government's policy package is certainly highly anticipated to support the sustainability of the upstream oil and gas sector. Executive Director of the Institute for Essential Services Reform (IESR) Fabby Tumiwa said, if the weakening of world oil prices occurs within the next 6 months, it is necessary to consider changing the formula for revenue sharing and other fiscal incentives.

According to him, this matter needs to be reviewed carefully by SKK Migas, the Ministry of Energy and Mineral Resources, and the Ministry of Finance.

"For the time being I have not recommended it, but for the study, it could be done pending the development of oil prices," he said.

Meanwhile for KKKS, Fabby argues, efficiency is the most appropriate strategy to be applied in the current conditions. The reason is that the average cost of oil production in Indonesia is the US $ 25 per barrel-US $ 30 barrels so that with the current oil price, KKKS can be said to be at a disadvantage because of the difficulty in getting profits.

"For KKKS in the current oil condition, it is necessary to carry out massive efficiency," he explained.

On the other hand, observers of the upstream oil and gas sector Tumbur Parlindungan assess the government's needs to make the ecosystem in the oil and gas sector more conducive and help facilitate all licensing. In addition, the government needs to hold activities that help KKKS to increase their production.

"In the end, there will be a merger or acquisition between oil and gas companies," he said.

Indonesian Petroleum Association Director Nanang Abdul Manaf said that if the weakening of oil prices is long-term in nature, it will later have an impact on all KKKS activities.

"Actually the price of oil below the US $ 30 per barrel has touched psychological numbers," he said.

According to Nanang, of course, incentives are needed because many projects are no longer economical with low oil prices.

Bisnis Indonesia, Page-8, Friday, March 27, 2020

Threatened to be Delayed, SKK Migas Monitor Tangguh Train 3

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) does not deny that there is a potential delay of the Tangguh Train 3 project by BP Berau Ltd due to the corona pandemic. For this reason, SKK Migas is ready to oversee the sustainability of this 3.8 million ton per year (MTPA) project.

SKK Migas Deputy for Operations Julius Wiratno said that in fact the project is still ongoing, especially in vital works. Nevertheless, the number of manpower and equipment logistics support is said to be an obstacle.

"Activities that enter the critical construction stage are still ongoing when there are limited personnel and supporting equipment because there are restrictions on the number of workers and physical distancing," explained Julius.

the Tangguh Train 3 project

At present, the Tangguh Train 3 project is entering the peak of the construction phase. The procurement of equipment is considered not so constrained. Because most of the tools needed have been brought to the project site. To be sure, the reduction in the number of workers has a major effect on the progress of completing construction

"The total workforce reached 13,000 last week, down to 10,000 and will continue to drop to 3,000 for core jobs, Julius said.

Nevertheless, he ensured that intensive coordination continued between the Cooperation Contract Contractor (KKKS) and SKK Migas. In the face of existing limitations, SKK Migas seeks to ensure that this project can remain on-line as targeted in the third quarter of 2021.

"Of course there will be negative impacts and there is the potential to be somewhat backward. While we anticipate and pay close attention, coordination has been very intensive," said Julius.

Kontan, Page-13, Friday, March 27, 2020

SKK Migas Seeks 12 Oil and Gas Projects This Year is Not Delayed

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) seeks to prevent 12 oil and gas projects scheduled to start production this year due to the widespread of the Corona Virus.

Dwi Soetjipto

SKK Migas Head Dwi Soetjipto said that the Covid-19 pandemic, which was followed by a call for the community to remain at home, made the oil and gas operational schedule for the project shifted from the plan. From his observation, there is one oil and gas project which has the potential to be delayed from this year's operation to next year.

"But we are trying to minimize the shift. We will inform you more fully in mid-April, "he said.

SKK Migas

SKK Migas Deputy for Operations Julius Wiratno added that the oil and gas project development has the potential to be disrupted due to a change in crew and logistics supply. Nevertheless, he will continue to conduct intensive coordination to mitigate and carry out recovery plans for the oil and gas project. In fact, several projects he said had been operating.

Blogger Agus Purnomo in SKK Migas

"Of the 12 projects in 2020, there are already four projects that are on stream (starting operations), all according to schedule. Hopefully, everything can run smoothly, "he said.

Of these four projects, three are scheduled to be operational in the first quarter of 2020, namely the Grati Pressure Lowering Project with a capacity of 30 million cubic feet per day / mmscfd by Ophir Indonesia (Sampang) Pty Ltd, Buntal-5 45 mmscfd by Medco E&P Natuna Ltd, and Sembakung Power Plant by PT Pertamina EP.

While one more project was completed earlier than planned in the second quarter, the Randu Scissors Project with an estimated production of 3 mmscfd by PT Pertamina Hulu Energi Randu Gunting. In addition, there are eight other projects planned to operate this year.

Blogger Agus Purnomo in Petronas Carigali Ketapang

In the first quarter, Bukit Tua Phase-3 with an estimated production of 31.5 mmscfd by Petronas Carigali Ketapang II Ltd is planned to start operations. Furthermore, three projects will operate in the second quarter, namely 15 mmscfd Betung Compressors by PT Pertamina EP, Malacca Strait Phase-1 3,000 bpd by EMP Malacca Strait, and Meliwis 20 mmscfd by Ophir Indonesia (Madura Offshore) Pty Ltd.

In the third quarter of 2020, there were three oil and gas projects scheduled to operate. These three projects are the 2.4 mmscfd Beauty Project by PT Sele Raya Belida, the 150 mmscfd LP-MP Compressor by PT Pertamina EP, and Peciko 8A 8 mmscfd by PT Pertamina Hulu Mahakam. Finally, the Merakes Project by ENI Indonesia is scheduled to begin production in the fourth quarter of 2020. 

ENI

At the Merakes Field, ENI plans to drill six subsea wells and build an underwater pipeline system that will be connected to the floating cricket production facilities / Jangkrik FPU in Muara Bakau Block. The peak production of the Merakes Field is estimated to reach 60,305 barrels of oil equivalent per day / boepd.

the Merakes Field

In 2020, the national oil and gas lifting is set at 1.95 million barrels of oil equivalent per day / boepd, up slightly from last year's realization of 1.8 million boepd. Specifically, oil production rose to 755 thousand BPD from the realization of 746 thousand BPD, and gas to 1.19 million boepd from the realization of 1.06 million boepd.

Investor Daily, Page-9, Friday, March 27, 2020

Chevron will drill 100 wells

PT Chevron Pacific Indonesia is targeted to drill 100 wells in the Rokan Block, Riau Province, in line with the company's commitment to continue provocation in the oil and gas block until August 2021. 

    Deputy Head of SKK Migas Fatar Yani Abdurrahman revealed that the drilling target will start as early as November 2020 because it still has to wait for the procurement of rigs and equipment for long leads. He explained, at least Chevron will use 5-10 units of the rig until August 2021.

Chevron

"At least Chevron can drill approximately 100 wells with the normal cost recovery scheme as it is now. At the time of Pertamina

enter just to continue, "he said.

According to Fatar, the drilling that will be carried out by Chevron is an effort to hold the rate of decline so that it is not too drastic so that it can be continued by PT Pertamina (Persero).

"The number of investments is still being discussed in the revised Work Plan and Budget (WPB) 2020, depending on where the well will be drilled," he said.

Meanwhile, in 2019, the realization of the Rokan Block production will be 190,000 barrels of oil per day (Mbopd), exceeding the Work Program and Budget (WPB) of 185.3 Mbopd. In the same period, the use of cost recovery was recorded at US $ 1.62 billion from WPB approval of US $ 1.71 billion.

Meanwhile, WPB approval for cost recovery in 2020 is valued at US $ 1.89 billion with a production target in accordance with WPB of 161 Mbopd. Previously, Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan said the government had held a joint meeting between the Ministry of Energy and Mineral Resources, SKK Migas, and Chevron.

Luhut Binsar Pandjaitan

From the results of the meeting, according to Luhut, Chevron is committed to continuing the project in the Rokan Block until August 2021. 

the Rokan Block

Chevron Pacific Indonesia's Corporate Communication Manager Soenitha Poernomo said that her party continued to discuss with various parties to ensure the Rokan Block transition takes place smoothly.

Soenitha Poernomo

"We are grateful to the direction and initiative of the Government of Indonesia that provides solutions to invest in optimizing national oil production," said Soenitha Poernomo.

Bisnis Indonesia, Page-8, Tuesday, March 24, 2020

The Tiung Biru Jambaran Project Speeded Up

PT Pertamina EP Cepu (PEPC) decided to move fabrication into the country in order to ensure the continuation of the Jambaran Tiung Biru (JTB) project when the coronavirus spread in a number of countries.

Jamsaton Nababan

PEPC Managing Director Jamsaton Nababan said a number of equipment factories were scattered in a number of countries affected by the coronavirus. Even one part factory is located in Wuhan. For this reason, the move to the fabrication process has been carried out.

Covid-19

"There is one part fabricated in Wuhan. But we have taken a strategic step to move the fabrication to Indonesia with the permission of the licensor, "he said.

PT Pertamina EP Cepu (PEPC) 

By moving part of the fabrication process into the country, Jamsaton hopes that the potential for material delays can be minimized. PEPC also decided to use global scale inspector staff. 

    The Engineering Procurement and Construction (EPC) Contractor of the JTB Gas Processing Facilities (GPF), PT Rekayasa Industri (Rekind) claims, coordination has been ongoing. Managing Director of Rekind Yanuar Budinorman said coordination continues to be carried out in order to maintain the continuity of the project.

the Jambaran Tiung Biru (JTB) project 

"Long lead items have been purchased, are being processed in fabrication, large equipment is already on site. The project coordination is very good," he said.

Yanuar added that with a number of efforts, his side was optimistic that the JTB project's onstream target in July 2021 could be achieved.

"Construction has been delayed a little because of rain and recently the corona pandemic, we started to rebound in May," he explained.

For the sake of smoothing the acceleration plan, Rekind is ready to increase the workforce to 1,000 people in the next two months. Jamsaton added the acceleration of the project can be done considering that around 60% of material needs are already on site.

"From the drilling target of six wells, we have completed drilling of four wells," he said.

In addition, the construction of a 5-kilometer pipeline is underway and is targeted for completion in April 2021.

"For gas facilities, it is 54.94%. Until December the target is 94% for GPF, "said Jamsaton.

The Jambung Tiung Biru Project is a national strategic project with a total investment of US $ 1.53 billion.

Kontan, Page-14, Friday, March 20, 2020

JTB Project on Target

PT Pertamina EP Cepu (PEPC) and PT Rekayasa Industries believe the US $ 1.53 billion Jambaran-Tiung Biru (JTB) project could be streamed in July 2021 despite being delayed. The JBT project, a national strategic project, has a gas production capacity of 192 million cubic feet per day (MMscfd), which will supply gas to consumers using the Gresik-Semarang gas pipeline. Later, gas supply from the JTb project is expected to overcome the gas supply deficit in 19 industrial sectors in Central and East Java.

Jambaran-Tiung Biru (JTB)

Based on data revealed by Pertamina EP Cepu (PEPC), the progress of the JTB Gas Processing Facility Procurement (EPC) Gas Processing Facility as of March 18, 2020 recorded only 54.94% of the planned 55.35%.

Jamsaton Nababan

"Seeing the progress achieved and the remaining time, we believe the JTB project target for on-stream can be achieved," said Jamsaton Nababan, Director of Pertamina EP Cepu (PEPC).

Pertamina EP Cepu (PEPC)

He revealed that the 0.4% delay was due to weather factors which had become an obstacle in the project. However, a number of strategies have been prepared, one of which is by bringing in automatic welding machines that can be used indoors so that the project can be carried out.

In addition, it has mobilized a number of workers to work at night shifts. Meanwhile, in the next 2 months, about 500-1,000 workers will be added. It will also use a number of water pumps to suck up rainwater so as not to cause flooding on the project site.

"The addition of workers was in accordance with the initial schedule plan, so it was not due to minus 0.4. That's normal in the project category, indeed the plan will increase. "

Meanwhile, when the corona outbreak broke out, Jamsaton made sure it would not affect the amount of material and equipment needed for the project. According to him, most of the company's orders have been made before the outbreak of the virus.

"In several other countries, there are also corona issues, we have taken steps, that our inspectors use inspectors worldwide. So, in general, there are no more issues watching in these countries, "he explained.

On the other hand, Managing Director of Industrial Engineering Yanuar Budinorman said that the coordination in the work of the JTB project with Pertamina EP Cepu (PEPC) at this time was very good. In addition, all workers who were empowered in the project were all Indonesian citizens so that they were not affected by the issue of the spread of the coronavirus.

Japan Gas Corporation (JGC)

The JTB gas field development project has a project value of US $ 1.53 billion. The value of the EPC GPF contract (Indonesian Consortium-JGC-JCC Consortium) is the US $ 983 million.

Head of SKK Migas Dwi Soetjipto previously stressed that the JTB Field was the only hope for supplying the largest gas supply in East Java so that the JTB Project had to be on-stream in July 2021.

Bisnis Indonesia, Page-9, Friday, March 20, 2020

THE COMPLEXION OF OIL AND GAS BLOCK TRANSITIONS

The process of transition in the management of oil and gas working areas that will end their contract period does not always take place smoothly despite the rules. In the Regulation of the Minister of Energy and Mineral Resources No. 15, 2015 it is stated that the management of terminated working areas (WK) can be done in various ways, namely management by PT Pertamina (Persero), the extension of the contract of cooperation by the contractor, and joint management between Pertamina and contractor.

Of the various constraints that exist, the issue of the mechanism of returning investment costs in upstream oil and gas business activities is one that makes the transition process complicated.

the East Kalimantan Block

In fact, the mechanism for returning investment costs is already regulated in ESDM Minister Regulation No. 26/2017. For example, the return on investment costs in the East Kalimantan Block and the Sanga Sanga Block. 

the Sanga Sanga Block

    Both of these working areas were jointly taken over by Pertamina. The Sanga Sanga Block began to be managed by Pertamina on 7 August 2018 from Vico Indonesia, while the East Kalimantan Block was officially managed by Pertamina on 25 October 2018.

According to Pertamina Upstream Director Dharmawan Samsu, repayments for investment costs continue to be coordinated with relevant parties. It is expected to be carried out immediately while still observing governance principles in accordance with applicable regulations, "he said.

However, the process of calculating the return on investment costs, according to Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities Fatar Yani Abdurrahman, could not be rushed.

"We are still verifying the unrecovered cost of the East Kalimantan and Sanga Sanga Blocks. This long verification process is being calculated. It is better for us to study late rather than in a hurry the results are not appropriate, "he said.

RECEPTION OPTIMIZATION

When talking about the Regulation of the Minister of Energy and Mineral Resources number 26 of 2017, this regulation is presented considering efforts to maintain the fairness of production levels and optimization of state revenues from upstream oil and gas activities. This legacy regulation of Ignasius Jonan and Arcandra Tahar has been amended three times.

This ministerial regulation was first published on March 30, 2017. Not long ago, the Minister of Energy and Mineral Resources Regulation No. 47 of 2017 was issued on August 3, 2017. After 7 months, another Minister of Energy and Mineral Resources Regulation No. 24 of 2018 was published. 

   Finally, re-changes took place on November 16, 2018, with the birth of the Minister of Energy and Mineral Resources Regulation No. 46 of 2018 concerning the third amendment to the Minister of Energy and Mineral Resources Regulation No. 26 of 2017. Fatar acknowledged the regulation continues to be refined.

"The Ministerial Regulation was made to ensure the return of investments that have not yet returned capital. Therefore, if you want to enter into an operator like Pertamina, they have read the intent and purpose. "

That is, the cooperation contract contractor (KKKS) who dares to manage oil and gas blocks must be able to reimburse investment costs. Oil and gas practitioner Tumbur Parlindungan said that as investors, KKKS do not want to be treated differently. Therefore, the government should ideally be firm and consistent with established rules.

According to him, the lack of implementation of the return on investment costs by the new KKKS to the old manager, could be the cause of PT Chevron Pacific Indonesia (CPI) refusing to drill during the Rokan Block transition. Tumbur said that Chevron could have been waiting for the realization of the unrecovered costs in East Kalimantan or Sanga Sanga.

Meanwhile, founder of the Reforminer Institute Pri Agung Rakhmanto said that regulations issued by the government related to the transition were in fact not easy to implement.

"In fact, it can be said it will more often not be applied because each party will ultimately refer to the existing contract clause."

Chevron

Unfortunately, the Chevron was reluctant to comment further. Chevron's Corporate Communication Manager Sonitha Poernomo confirmed a number of things being discussed so far, including the option to optimize production from this strategic asset. 

Sonitha Poernomo

    From the information gathered, the transition process at the technical level has actually been going well.

the Rokan Block by Chevron

Likewise, it is also related to the option to buy Rokan Block shares or Pertamina's scheme to enter the Rokan Block before next year. The business also tried to confirm to Pertamina's President Commissioner. Pertamina's Chief Commissioner Basuki Tjahaja Purnama was reluctant to explain more about the decision to buy Chevron's shares or early handovers in the Rokan Block.

Basuki Tjahaja Purnama

"It's clear the decision of the BOD and BOC meeting. Let the directors answer, "he said.

Bisnis Indonesia, Page-9, Friday, March 20, 2020