To Increase Petrochemical Business, Pertamina Continues to Build Refineries

PT Pertamina (Persero) will continue to develop six of its refinery projects even though sales of fuel oil (BBM) at the time of the Covid-19 pandemic was down dramatically. Because the construction of the refinery will increase the petrochemical business which will be the backbone of the company in the future.

Nicke Widyawati 

Pertamina President Director Nicke Widyawati said, although fuel sales were down, the refinery construction was still promising to continue. One of them, the construction of refineries is needed to encourage national energy independence considering the current fuel imports still reach 40% of the total national needs.

In addition, by equipping the refinery with petrochemical facilities, the refinery project will sustain the company's business in the future. The reason is, when fossil energy needs to decrease, the petrochemical business is considered to be very good. For example, during a pandemic, the pharmaceutical business actually increased and petrochemical facilities could provide basic chemicals for this industry.

"Petrochemicals will become one of Pertamina's business pillars, so we will strengthen it," said Nicke Widyawati.

Nicke acknowledged that the refinery project could not be carried out aggressively during the Covid-19 pandemic given the limitations of mobilization. He said he would focus on completing the design and administrative affairs of the refinery project during this pandemic. Thus, construction can be accelerated after the pandemic is over.

"So it can be continued immediately after PSBB (large-scale social restrictions) ends, can immediately open up employment opportunities," he said.

For example, the construction of the Tuban Refinery in Gresik which is being implemented by the PSBB. He explained, the process of preparing the construction site had to be stopped temporarily. However, it continues to complete its administrative work.

"But as soon as [PSBB] opened, it immediately started operating. Our intention of the refinery continues to create jobs for the people there, "said Nicke.

Until the end of the first quarter, the progress of land clearing in Tuban refinery has reached 90.08% and restoration of 46.4%. The general design progress (GED) of this project still reached 6.22%.

At present, the implementation of the basic engineering design / BED and front end engineering design / FEED of the refinery project has also begun. For projects that have entered the construction phase such as the Balikpapan Refinery Project, he continues to work on.

"The Balikpapan refinery is still ongoing, but the HSSE is tighter so there is no Covid-19 deployment)," Nicke said.

Balikpapan refinery construction until the end of March reached 15.02% and is targeted to reach 40% until the end of the year.

"The Cilacap Refinery and Balongan Refinery projects also continue," Nicke added.

Pertamina targets the development of the Balongan and Cilacap Refineries to reach 10% each this year and will continue to accelerate according to the target stages of development. Discussions with Saudi Aramco as the company's partner in building the Cilacap Refinery continue. 

    As for the Balongan Refinery, the company has signed a memorandum of understanding (MoU) with the Abu Dhabi National Oil Company (ADNOC) for the potential development of the Petrochemical Integrated Refinery Complex which is the third phase of the Balongan Refinery Project. Currently a feasibility study is being conducted with partners and is in the location and land acquisition.

For the first phase, the Balongan Refinery Project is still in the Dual FEED Competition (DFC) phase which is targeted to be completed this May. Next for the second phase, a feasibility study is currently being carried out as well as starting the Revamp Study Unit of the ARDHM.

Furthermore, the Plaju Refinery Project has now entered into the BED Licensor procurement and is starting the BED work. While the Dumai Refinery Project is in the stage of conducting a Bankable Feasibility Study (BFS) revisit tender.

Regarding the Bontang Refinery Project, the company had considered moving the location and is still under review. The company also continues to build new olefin production facilities at the PT Trans Pacific Petrochemical Indotama (TPPI) refinery where the company is a shareholder.

     If all refinery projects are completed, Pertamina's crude oil processing capacity will increase to 2.15 million barrels per day (BPD) from 1 million BPD. Not only that, Pertamina's refineries can also process oil with sulfur content up to 2%. Then, the company's petrochemical production will increase to 12,000 kilo tons per year (kilotonnes per annum / KTPA) from 1,660 KTPA. While the company's fuel production will increase to 1.7 million BPD from 600 thousand BPD.

Investor Daily, Page-9, Thursday, May 14, 2020

The government is advised to invite oil and gas junior companies

The government is advised to invite junior companies (small companies) that focus on oil and gas exploration activities. This is because the discovery of significant oil and gas reserves is the key to achieving the target of producing 1 million barrels of oil per day (BPD) by 2030. 

       Practitioners of Oil and Gas Tumbur Parlindungan revealed that large oil and gas companies rarely voluntarily disburse large funds for large-scale exploration activities. This can be seen from the lack of large oil and gas companies participating in the management of new oil and gas blocks through auctions held by the government.

For this reason, he advised the government to invite junior companies to look for potential oil and gas reserves in the country. This is because, in the world, junior companies usually focus on finding oil and gas reserves to be sold to large oil and gas companies. He gave an example, the discovery of large gas at Tangguh was actually carried out by Arco. However, BP, which is now the operator there, acquired the company.

"We need to invite small companies but want to take exploration risks. We need pioneers who want to drill, we need players who want to play exploration, big companies focus above 100 million barrels and above, "said Tumbur.

According to him, data on oil and gas reserves owned by Indonesia are currently difficult to compete with other regions. At present, large oil and gas companies are actually targeting Africa, which has proven oil and gas reserves in large quantities. This will only happen in Indonesia if there are 11 proven huge oil and gas reserves.

"The company will come if the reserves are proven large," said Tumbur.

Tumbur explained, large companies such as Shell, Chevron, Exxon, and Total would not be interested in oil and gas reserves whose volumes were less than 100 million barrels of oil equivalent. 

Furthermore, companies such as HESS, ConocoPhillips, and National Oil Company (NOC) such as Petronas, PTTEP Thailand, Repsol, will only glance at one area if the reserves are more than 50 million barrels of oil equivalent. 

In fact, he continued, the flow of foreign investment funds is very important so that exploration activities can run massively in Indonesia.

Blogger Agus Purnomo in Petronas PC Ketapang

"We see that our oil and gas block auction is not very large, so it will not be in demand by large companies," he said.

Repsol

On the other hand, the success of finding oil and gas reserves (success ratio) in Indonesia is still less than 50%. This could also be an obstacle to achieving the 1 million BPD oil production target. He gave an example, the findings of oil and gas in Ande-Ande Lumut could be one of the big findings, but the problem of monetization and the use of technology could hamper its development.

Referring to the data of the Ministry of Energy and Mineral Resources (ESDM), the number of the signing of production sharing contracts (PSCs) from oil and gas block auction results has been relatively low since 2015. In 2015, the government signed 8 PSCs. But afterward, although the auction was still held, in 2016-2017, not a single PSC was signed. Furthermore, as many as 11 PSCs were signed in 2018 and 6 PSCs last year. In fact, the signing of the PSC in Indonesia touched 26 contracts in 2011.

Inline, the realization of national oil and gas exploration investment has also been relatively low since 2015. In 2015, the realization of exploration investment was recorded to still reach the US $ 970 million. However, this exploration investment continues to decline to the US $ 916.2 million in 2016, US $ 576.55 million in 2017, and rose to the US $ 786.18 million in 2018. In fact, exploration investment in Indonesia once touched the US $ 3, 05 billion in 2013.

Must be planned

Another strategy from the government to reach the target of 1 million BPD is through enhanced oil recovery (EOR) activities. According to Tumbur, this EOR activity must be planned from the beginning in the development of an oil and gas block. The reason is that EOR activities will not be effective and will require large costs if they are only carried out when the oil and gas reserves of an oil and gas block are almost gone.

"During the decline, the energy strategy has been lost. If it was only EOR at that time, the cost was more expensive. EOR continues improvement, there are pilots from the start. If it's already [production] road it's difficult to run, "said Tumbur.

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) once made an additional projection of oil production from EOR activities. Referring to the projection, the newly initiated EOR activities can significantly increase oil production starting in 2025. Referring to the data, national oil production is projected to only be 281 thousand BPD by 2030 if no EOR activities are carried out. However, if the EOR is successfully implemented, oil production can be bent to 520 thousand BPD that year.

However, at present, the EOR activities are still in the pilot phase. PT Pertamina (Persero) through Pertamina EP has implemented EOR in Tanjung Field. The company has also signed the points of understanding between Pertamina and Repsol for full-scale management, including the implementation of surfactant-polymer EOR. In the Jirak and Rantau Fields, Pertamina is conducting a study of the application of surfactant chemicals for the implementation of EOR in both fields.

Furthermore, related to CO2 flooding, Pertamina is currently conducting studies in several fields, namely Jatibarang, Sukowati, and Ramba. Pertamina also expanded this EOR activity to the oil and gas block managed by PT Pertamina Hulu Energi (PHE), namely in the North West Java Offshore Block, precisely in the Zulu Field and E-Main. In addition, in the near future the Batang field, which is operated by PHE Siak, will be an EOR steam flooding pilot project.

Investor Daily, Page-9, Thursday, May 9, 2020

Additional Oil and Gas from the Bukit Tua Phase-3 Project

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) ensures one more oil and gas project has been operating onstream this year.

Dwi Soetjipto

Head of SKK Migas Dwi Soetjipto said that the Bukit Tua Phase-3 Field development project managed by Petronas Carigali Ketapang II Ltd had been onstream at the beginning of the second quarter-2020. 

Blogger Agus Purnomo in Petronas Carigali Ketapang II Ltd

   Previously, there were four projects that had been streamed in the first quarter of 2020, namely the Grati Pressure Lowering project, the Randugunting Gas Field development project, the Buntal-5 Gas Field development project, and the construction of the Sembakung Power Plant. The projects provide an additional 80 mmscfd of gas production and generate 4 megawatts (MW) electricity.

Dwi said the project, with an investment of US $ 15.1 million, was completed on time despite being overshadowed by the Covid-19 pandemic. The Bukit Tua Phase-3 Field Project is projected to increase gas production by 31.5 million standard cubic feet per day (mmscfd) and oil by 3,182 barrels of oil per day (bopd).

"The development of Bukit Tua Phase-3 is a very important project, considering the additional oil and gas production is very large and very beneficial for consumers, especially in East Java," Dwi said.

                                Blogger Agus Purnomo in SKK Migas

This year, SKK Migas is targeting 11 onstream projects. For this reason, Dwi appreciates Petronas's steps in completing the Bukit Tua Phase-3 project.

Kontan, Page-13, Monday, May 4, 2020

Upstream Oil and Gas Industry Asked to Maintain Activities and Avoid Layoffs

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) requests that the upstream oil and gas industry continue to maintain operations and avoid termination of employment (PHK), in order to maintain the continuity of the industry in the following years, despite being affected by the Covid pandemic. 19 and low world oil prices.

The Head of SKK Migas Dwi Soetjipto said that the achievement of the APBN target in the first quarter was very good, but in the future what was prioritized was how to prevent activities being stopped and no layoffs.

He added, by maintaining upstream oil and gas operations, including in various drilling, maintenance, and other operational programs, the sector was expected to continue to drive the national economy, create a multiplier effect for the regional economy and supporting industries, and maintain the availability of employment.

"Like the blood that continues to flow, the upstream oil and gas industry is expected to continue to drive the pulse of the Indonesian economy," Dwi said.

Meanwhile, SKK Migas Deputy for Operations Julius Wiratno said that until now the commitment of the Cooperation Contract Contractors (KKKS) to achieve the production target is still maintained. From the 1st quarter of 2020 data shows that, for oil production, 7 KKS Contractors exceeded the National Budget target and 8 KKKS exceeded the technical targets in the 2020 Work Plan and Budget. Whereas for gas distribution 5 KKS Contractors were able to exceed the National Budget target and 12 KKS Contractors exceeded the technical target Work Plan and Budget 2020.

SKK Migas has sent a letter of appreciation for KKKS who achieved the target in 2019 and the first quarter of 2020, as well as a warning letter for KKKS that did not reach the target in the first quarter of 2020. In that letter, SKK Migas also submitted input and recommendations for each KKS Contractor based on monitoring the implementation of the Work Plan and Budget and other monitoring so that in the second quarter of 2020 until the end of the year, KKKS who have not yet reached the target can implement the SKK Migas recommendations and those who achieve the target can look for operational ways and innovations so that the achievements obtained can be further improved.

In addition to the operational aspects, SKK Migas through the letter reminded the PSC Contractors to implement the principles of work safety and environmental protection so that the incident rate in the second quarter and until the end of 2020 can be maintained at the specified level.

On Target

Meanwhile, SKK Migas also seeks to prevent the four strategic upstream oil and gas projects from being late in operation despite the Covid-19 pandemic. All projects are targeted to be completed in stages until 2027. SKK Migas Head Dwi Soetjipto said, although the Covid-19 pandemic affected the progress of upstream oil and gas work, the oil and gas contractor working on the four national strategic projects was still committed to completing the project on time.

Jambaran-Tiung Biru Field (JTB)

These four projects are the development of the Train-3 Tangguh Refinery, Jambaran-Tiung Biru Field (JTB), the Masela Block, and the Indonesia Deepwater Development (IDD) Project. One project that is quite constrained by Covid-19 is the development of the Abadi Field, the Masela Block.

Inpex Corporation

"But we are still discussing with Inpex so that onstream (operations) will not retreat from 2027," Dwi Soetjipto said.

Dwi Soetjipto explained the existence of a pandemic hampered the work on the gas project field survey. In order to prevent the spread of Covid-19 from mobility restrictions, a field survey for the Abadi project could not be carried out.

"Maybe there will be a speedup in the coming year," he said.

In addition, a pandemic that suppressed energy demand and global oil prices, Dwi said also made marketing gas that would later be produced from the Abadi Project difficult.

"First of all, what is still constrained is that prospective buyers are still waiting and seeing," he said.

In fact, a commitment to purchase gas is needed so that the Abadi Project can reach the final investment decision / FID stage which is targeted by the end of 2021. So far, Inpex has just obtained a commitment to purchase gas by PT PLN (Persero) 2-3 million tons per year and PT Pupuk Indonesia (Persero) 150 million standard cubic feet per day / mmscfd. At least, around 80% of the 9.5 million tons per year gas production must have a purchase commitment so that FID can be achieved. Constraints due to the Covid-19 pandemic, also experienced by the Train-3 and Jambaran-Tiung Biru Refinery Project.

"But the Train-3 Tangguh Refinery Project will still be on stream (operation) in 2021. Then, JTB is still committed to onstream in 2021," he said.

While the Jambaran-Tiung Biru Project works until the end of March, still referring to SKK Migas data, it still reached 57.91% of the target of 58.17%. So that the project's operating schedule is expected to be slightly delayed from initially the third quarter of 2021 to the fourth quarter of the same year.

The US $ 1.53 billion projects will produce 190 million cubic feet of gas per day / mmscfd. Pertamina EP Cepu President Director Jamsaton Nababan once revealed that the JTB Project was a little late compared to the schedule. However, this delay range is still fairly reasonable and can still be pursued.

It has prepared a number of strategies to pursue this delay. In April-May, he was optimistic that he could return the JTB Project's progress according to plan. The investment value of these four national strategic projects reaches the US $ 37.21 billion. While the additional oil production is 65 thousand BPD and 3,484 mmscfd of gas.

Investor Daily, Page-9, Monday, May 4, 2020

Repsol and Pan Orient Exit the East Jabung Block

     Repsol SA and Pan Orient Energy said that they would divest ownership of the East Jabung Block after exploration activities did not find oil and gas reserves. Both companies must finalize their exact commitments before leaving the oil and gas block.

the East Jabung Block

     Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Fatar Yani Abdurrahman said the two oil and gas companies had expressed their intention not to continue developing the East Jabung Block. 

     This decision was made after the discovery of oil and gas reserves from drilling the Anggun-1 exploration well last year. However, the two companies have not yet submitted an official letter on the decision.

"In March there has been no official discussion about the KKKS (cooperation contract contractor) stopping this. We will ask again the KKKS commitments, "he said.

     He explained that if the Anggun-1 drilling had succeeded in finding oil and gas reserves, the contractor would continue drilling the Cantik-1 and Anggun-2 wells. However, because drilling failed to find oil and gas reserves (dry holes), the exploration activities in the East Jabung Block were decided to stop.

"If it is also continued exploration activities there might not be oil and gas findings. In fact, drilling a well for Anggun-1 costs the US $ 30 million, "he said.

     Referring to SKK Migas data, drilling Anggun-1 wells is part of the exact commitment agreed by the contractor with the government when given an extension of the exploration period at the beginning of last year. The Anggun-1 well was drilled on November 14, 2019, and completed on December 10 of the same year.

Repsol

     Besides drilling the Anggun-1 well, other commitments promised were geological and geophysical studies (G&G) and drilling of two more wells. This year, it is planned that Repsol and Pan Orient will undertake two G&G studies and drilling Anggun-2 or Cantik-1 wells depending on the results of the Anggun-1 well drilling.

     After the decision of Repsol and Pan Orient to end activities in the East Jabung Block, SKK Migas reminded that the contractor must still fulfill the obligations of the seventh and eighth work commitments as agreed upon when given an extension of the exploration period.

Investor Daily, Page-9, Saturday, May 2, 2020

Oil flood

More than 30 tankers gathered near the coast of California, United States, with a full cargo of crude. The ships carried around 20 million barrels of crude oil for days without knowing where to put the cargo. Millions of barrels of oil do not yet have prospective buyers. The story is on the Bloomberg website, Wednesday (22-April-2020). US WTI (West Texas Intermediate) oil is hit hard.

For the May 2020 purchase contract, the price of WTI crude oil is minus. Based on oil trading, Tuesday (April 21), the price is minus 35.55 US dollars per barrel.

minus 35.55 US dollars per barrel

What does it mean? Buyers are even paid to receive crude oil. Therefore, oil producers must incur additional costs for storage, while the storage tank capacity is maximum. That was explained by Lamon Rutten, CEO of Indonesia Commodity and Derivatives Exchange.

When the storage tank is full, where do you want the oil to go? Oil is not leftover laundry water that can be thrown into a ditch. While production continues, which is also expensive, and there are costs for storing oil, the Mafia, on sale oil.

This situation has never happened in the land of "Uncle Sam". In a number of reports, this condition has the potential to make many oil companies in the US go bankrupt. How about in Indonesia? Indonesia, as a net oil importer, can actually benefit from cheap crude oil prices. 

Nicke Widyawati

    As stated by the President Director of PT Pertamina (Persero) Nicke Widyawati, cheap world crude oil prices have the opportunity to import as much oil as possible.

The statement came out when the Covid-19 pandemic was not widespread in Indonesia. However, everything changed when the Covid-19 pandemic was declared a national disaster by President Joko Widodo, which was followed by large-scale social restrictions (PSBB). The Covid-19 pandemic drastically reduced the movement of people and goods.

Not many planes fly and private cars are parked at home. In the public transport sector, long-distance train trips are canceled, whereas taxis and public buses are only parked at their respective puls. That is, the demand for fuel oil (BBM) drastically reduced.

The option to import is much cheaper than draining oil from domestic oil wells. Some refineries will be stopped operating. Pertamina's report shows that national fuel consumption dropped dramatically by 35 percent.

In DKI Jakarta and Bandung, consumption dropped dramatically to 60 percent. Pertamina's efforts to "provoke" the purchase of fuel through a 50 percent cash return service for application-based motorcycle taxi drivers have not been satisfactory.

Solar and aviation fuel stock in Indonesia also broke records, from an average of enough for 25 days to 100 days. All of the above situations led to the insistence that fuel prices in Indonesia be lowered. However, the government indicated it would not reduce fuel prices.

The consideration is the plan to cut oil production of members of the Organization of Petroleum Exporting Countries (OPEC) and their alliances starting next May, as well as the exchange rate of the rupiah against the US dollar. The government is also aware that reducing fuel prices makes Pertamina's fiscal pressure.

Negative crude oil prices in the US also do not necessarily reduce fuel prices there. Another question is, how significant is the reduction in fuel prices when many people need it in the middle of the Covid-19 pandemic?  

Kompas, Page-9, Friday, April 24, 2020

Pertamina's New Reserves in ONWJ FK-1 Well

The Pertamina Group continues to explore new oil reserves. Pertamina Hulu Energi (PHE) through its subsidiary, Pertamina Hulu Energi Offshore Northwest Java (PHE ONWJ), discovered oil reserves from drilling the FK-1 well development.

PHE's Managing Director, Meidawati said that the current corona outbreak was very challenging. However, PHE still makes every effort to work according to the target Work Plan and Budget (RKAP).

FK-1 wells in Indramayu waters in West Java

One of them is drilling FK-1 wells in Indramayu waters in West Java. ONWJ PHE General Manager Cosmas Supriatna explained, drilling activities at ONWJ were still on schedule and the results were positive.

 "The initial projection of the drilling was 400 bopd, but the Wells test recorded higher results, which yielded 987 bopd. Of course, we are still waiting for the results of the FK-8 Well drilling which is expected to be completed by the end of April, Meidawati said.

Until the first quarter of 2020, PHE ONWJ oil production reached 29,021 bopd, or 10% higher than the RKAP production target in the previous quarter of 26,395 bopd. This oil production achievement also exceeded the target of the State Budget (APBN) which was set at 28,809 bopd.

For the realization of lifting in the first quarter of 2020, PHE ONWJ successfully exceeded 109.4% of the RKAP and passed the state budget target of 100.2%. Throughout this year, PHE ONWJ is targeting oil and gas production of 41,100 boepd, consisting of oil production of 26,400 bopd and 85 mmscfd of gas.

Kontan, Page-13, Tuesday, April 21, 2020

Pertamina stops Balikpapan refinery operations from May

PT Pertamina (Persero) will stop the full operation of the Balikpapan Refinery starting in May following the decline in domestic demand for fuel oil (BBM). On the other hand, taking advantage of low world oil prices, the company will increase imports of crude oil and fuel.

Nicke Widyawati

Pertamina President Director Nicke Widyawati said, to mitigate the impact of the current conditions, his party would begin to reduce the refinery's operating capacity within certain limits according to demand conditions.

In the final scenario, the company has begun to reduce the capacity of the Balikpapan refinery this month, to finally stop its total operations for the two crude distillation units (CDU).

the Balikpapan refinery

"Starting in early May, the whole Balikpapan Refinery must stop. We use this moment to do maintenance. Where during slow down demand, some of our refineries are shut down for maintenance. So our maintenance is speeding up, "said Nicke Widyawati.

Nicke Widyawati explained that with world oil prices falling significantly and fuel consumption also being cut, the operation of the refinery in full is actually not economical and actually harms the company. However, it will continue to operate other refineries because the cessation of operation of all refineries will have an impact on the national economy.

"Refineries if only all of these operational economies are closed. But Pertamina has the responsibility as a driver of the national economy, therefore we remain in balance even though the economy is not the best, but how does Pertamina's operational impact on the national economy and job creation, "said Nicke.

He noted, since March 1, the average daily sales of fuel dropped significantly, namely 16.78% for gasoline and 8.38% for diesel compared to the daily average in January and February. Specifically, the average daily sales of gasoline in March-April recorded only 77.95 thousand kiloliters (KL) from the normal 93.66 thousand KL, while gasoline sales were only 37.84 thousand KL from the normal 41.31 thousand KL.

In fact, based on Pertamina's data, the company's fuel sales this year is targeted to reach 78.7 million KL. While related to refinery operations, still referring to the same data, the company targets crude oil processing including intermedia and gas at the national refinery this year to reach 355 million barrels, up 4% from the 2019 prognosis of 342 million barrels. While refinery production is targeted to reach 290 million barrels, up 6% from last year's prognosis of 273 million barrels.

Add Import

On the other hand, taking advantage of the drop in world crude oil prices, Nicke stated that Pertamina decided to increase its purchase of crude oil and fuel from abroad. This policy was taken because it was considered more economical. In particular, crude oil imports were 10 million barrels and gasoline 9.3 million barrels.

the Rokan Block

With this additional import, Pertamina plans to temporarily stop the purchase of domestic crude oil. Mainly from oil producers whose large production such as PT Chevron Pacific Indonesia (CPI) from the Rokan Block and Exxon Mobil Cepu Limited (EMCL) from the Cepu Block. This is because domestic oil prices are now more expensive than imports.

Exxon Mobil Cepu Limited (EMCL)

"Domestic crude has a high price, so if it is purchased, it will be heavy The COGS will increase dramatically. While imported crude is cheap, this is the right time for crude stock to be used for refineries to reduce refinery HPP. To take the opportunity for oil prices to fall, we optimize the existing storage, "explained Nicke Widyawati.

Related to the procurement of crude oil and fuel, based on Pertamina's data, the company sets the volume of crude oil imports this year at 83 million barrels, down 3% from the 2019 prognosis of 86%. Furthermore, imports of gasoline products are planned at 119 million barrels, up slightly from last year's prognosis of 118 million barrels.

Aramco

Nicke added, his party also plans to increase imports of liquefied petroleum gas / LPG by 220 thousand metric tons. The addition of LPG imports is to take advantage of the low price of LPG according to Aramco CP. Pertamina's data shows that according to the RKAP, LPG import volume originally planned was 6 million metric tons, up 3% compared to last year's prognosis of 5.8 million metric tons.

Investor Daily,  Page-9, Saturday, April 18, 2020

PEPC Pursues JTB Production Target in July 2021

PT Pertamina EP Cepu (PEPC) stated that the progress of the Jambaran-Tiung Biru Field Gas (JTB) Project Development project has now reached 56.42%. The project is targeted to be productive in July 2021 according to plan.

the Jambaran-Tiung Biru Field Gas (JTB)

The four-well drilling projects, 6.6 km of collecting pipe construction, the construction of the Gas Processing Facility (GPF). In addition, work on a fluid pipeline connected to the Banyu Urip Field production facility, work on a gas sales pipeline along 11.3 km, construction of a gas sales measurement station, and construction of infrastructure and supporting operations such as offices, warehouses, workshops, houses of worship, and housing.

The JTB Drilling Campaign starts on September 17, 2019, using a rig owned by PT Pertamina Drilling Services Indonesia (PDSI), which has advanced walking rig technology. The rig can shift from one well to another without having to be laid down, thereby reducing the duration of the drilling. Drilling works include 5 new wells and 1 existing well to produce 315 MMSCFD of raw gas. The work involved 42 contractors, all under the control of the country's best sons and daughters.

At present, the entire Drilling Campaign series at JTB has completed 3 wells, so it is expected to be completed by the end of 2020 and ready to flow gas to the Gas Processing Facility in the first quarter of 2021, according to the Government's target. In carrying out its operations, PEPC is committed to always upholds safety, occupational health and environmental protection standards.

Specifically for mitigating the spread of COVID-19, a number of preventive measures have been taken as outlined in the Precautionary Procedure for Spread of COVID-19, which must be followed by all workers involved.

Investor Daily, Page-9, Saturday, April 11, 2020

Chevron's Work Plan on Rokan Block has Potentially Revised

If the PT Chevron Pacific Indonesia scheme continues to invest in the Rokan Block is approved, the US oil and gas company work plan will be revised. The reason is, since 2018, Chevron no longer plans to drill new wells in the Rokan Block.

Dwi Soetjipto

The Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that he and Chevron Indonesia were currently reviewing the investment plan of the oil and gas company in the Rokan Block for this year and next year. This is related to efforts to keep oil production from oil and gas blocks in Riau from falling dramatically during the management transition period to PT Pertamina (Persero).

"If the scenario has been approved by the Minister of Energy and Mineral Resources (ESDM), Chevron's work plan and budget (WP&B) for 2020 and 2021 will adjust," he said.

the Rokan Block Chevron

The aforementioned scenario is related to investment options during the Rokan Block management transition. According to him, one of the options discussed was Chevron continue its investment in the Rokan Block until the contract is completed in 2021. For this reason, the company together with Chevron and PT Pertamina (Persero) as the new operator are still conducting discussions.

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 it focused on encouraging business to business negotiations between Pertamina and Chevron related to investment in transition period. Originally, Pertamina was the one who would issue funds and Chevron as the executor of its activities. However, he said that these negotiations could not continue.

So that his party looked for other alternatives so that investments 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 later as to what, and what Chevron wants to be like," 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 was immediate used up. This policy is likely to last until the contract expires.

Maritime and Investment Coordinating Minister Luhut Binsar Pandjaitan had also stated that Chevron would continue investing in the Block Rokan This was discussed with the Ministry of Energy and Mineral Resources, SKK Migas, and Chevron in a video conference in mid-March. This too keep the production of the Rokan Block from going down 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, "Dwi said.

Investor Daily, Page-9, Wednesday, April 8, 2020

First Quarter, Pertamina Oil and Gas Production Increases Slightly

PT Pertamina (Persero) recorded oil and gas production until the first quarter of this year of 919 thousand barrels of oil equivalent per day (barrel oil equivalent per day / boepd), up slightly compared to the realization of the same period last year of 901 thousand boepd. This year, Pertamina targets oil and gas production of 923 thousand boepd.

Pertamina Upstream Director Dharmawan Samsu said oil and gas production in the first quarter of 2020 was recorded at 919 thousand boepd, an increase of 2% compared to last year's average production. Specifically, oil production averaged 421 thousand Barrels Per Day (BPD), while gas production averaged 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 (work plan and company budget). Until now, it has reached 99% of the target, "he said.

Dharmawan added, the positive performance of the company's oil and gas fields abroad. Pertamina's subsidiary, PT Pertamina International EP (PIEP) managed to contribute oil and gas production by 156 thousand boepd or 103% of the target for the first three months of 2020.

"The increase in production is mainly from field performance in Algeria," he added.

This year, Pertamina set oil and gas production targets of 923 thousand boepd which consisted of oil production of 430 thousand BPD and 2,857 gas mmscfd. When compared with this year's target, the company's oil production realization of 421 thousand BPD was only 97.9 percent of the target. While Pertamina's gas production is around 1% above the target. Dharmawan admitted that the 923 thousand boepd target was very challenging. To ensure oil and gas production targets can be achieved, he will ensure the drilling plan is carried out according to schedule.

"The production target of 923 thousand boepd is very heavy, because we have to make sure that drilling cannot be late," he said.

Pertamina's oil and gas production this year is planned to be obtained from the contribution of oil and gas production from Pertamina's upstream operations in the country amounting to 765 thousand boepd and 158 thousand boepd abroad. From foreign assets, oil production is targeted to increase slightly from 105 thousand BPD to 107 thousand BPD, and gas production will increase from 276 mmscfd to 298 mmscfd. While from the domestic oil and gas block, oil production is targeted at 323 thousand BPD 2,559 mmscfd gas.

For information, the company's oil and gas block assets in the country are managed through its subsidiaries, PT Pertamina Hulu Energi (PHE), PT Pertamina Hulu Indonesia (PHI), PT Pertamina EP, and PT Pertamina EP Cepu (PEPC). PHE targets oil production of 84 thousand BPD and 822 mmscfd of gas. While Pertamina EP set a target of oil production of 85 thousand BPD and 965 mmscfd of gas.

PT Pertamina EP Cepu (PEPC)

PHE plans a number of activities to achieve this year's target, namely drilling 51 development wells and 6 exploration wells, as well 50 wells. While Pertamina EP will drill 108 development wells and 10 exploration wells in 2020.

Anticipate a Global Situation

To anticipate the impact of the decline in world crude oil prices coupled with the Covid-19 pandemic, Dharmawan said, Pertamina take anticipatory steps by implementing a business continuity plan while continuing to conduct in-depth evaluations for prioritizing work plans, operating costs, and investments. This is in line with corporate policies to optimize financing.

"Pertamina continues to maintain the upstream investment level to meet national oil and gas needs, both in production and lifting, but with some adjustments based on priority scale so that the economics of the project can also be achieved," Dharmawan explained.

Pertamina also continues to monitor the development of the global situation, mainly the world price of crude oil, the rupiah exchange rate against the dollar, and the impact of the Covid-19 pandemic. Referring to Pertamina's data, of the total investment budget of the company this year of US $ 7.8 billion, most of it is allocated for upstream oil and gas investment amounting to US $ 3.7 billion. This upstream investment budget is up compared to last year.

ENI Block

Previously, Dharmawan revealed, the increase in upstream investment was partly because the development of the Merakes Field, East Sepinggan Block will begin in 2020. In this block, for information, Pertamina through PHE has a participating interest / PI of 15%. While the operator of this block is ENI. ENI was approved by the plan of development / POD in April last year.

Under the POD, ENI plans to drill six subsea wells and build an underwater pipeline system that will be connected to the floating production facility / FPU Jangkrik block in Muara Bakau Block. Referring to SKK Migas data, the Merakes Field is targeted to start operating in 2021. The peak of field production is estimated to reach 60,305 boepd.

Investor Daily, Page-9, Wednesday, April 8, 2020

Petroleum Production Still Continues

PT Pertamina Hulu Energi Offshore North West Java PHE ONWJ's activities, which operate off the north coast of West Java, continue to take place during the CoVid-19 pandemic situation.

Its production, around 28,000 barrels of oil per day. "Our activities on the ground continue as usual despite changes in crew changes, from every 12 days extended to every 28 days during the Covid-19 pandemic," said PHE ONWJ General Manager Cosmas Supriatna.

The number of workers in the field has also been reduced, from 1,200 to 970. In Indonesia, the Covid-19 pandemic has an impact on upstream oil and gas activities, in the form of declining oil and gas demand and hampered field operations.

Kompas, Page-10, Monday, April 13, 2020