Revision of the Oil and Gas Law is a Mess

Revision of Law no. 22 of 2001 concerning Oil and Natural Gas stumbled on the plan to establish oil and gas holding by the Ministry of SOEs. Member of Commission VII of the House of Representatives (DPR), Harry Poernomo, stated that the formation of oil and gas holding causes the plan to establish a special business entity (BUK) which is planned to enter into Revision of Law Number 22 Year 2001 about oil and gas mess.

Harry proposed that the shareholders of State-Owned Enterprises (SOEs) are not held by a Minister of SOEs, but must also be held by sectoral ministries such as the Ministry of Finance. Because, if the authority is only held by the Minister of SOEs, it can lead to arbitrariness and chaotic governance of SOEs.

Plus the lack of synergy on the government. According to Harry, it is seen in the discourse of oil and gas holding formation by the Minister of SOEs. The holding concept led to what had been planned, ie the coordination between the Ministry of Energy and Mineral Resources with the House of Representatives in the discussion of the Oil and Gas Draft Law to be a mess. The delicate discussion of the Oil and Gas Law is about institutionalization.

"Among other things, we are discouraging the existence of a special business entity (BUK). Well, oil and gas holding planned by the Minister of SOEs is totally inconsistent with the draft of Oil and Gas Law," he said.

Therefore, according to Harry, the General Meeting of Shareholders (RUPS) of SOEs should involve sectoral ministries and added by the Ministry of Finance. So once again, shareholders are not just SOE Minister.

IN INDONESIA

Revisi UU Migas Berantakan

Revisi Undang-Undang No. 22 Tahun 2001 tentang Minyak dan Gas Bumi terbentur rencana pembentukan holding migas oleh Kementerian BUMN. Anggota Komisi VII Dewan Perwakilan Rakyat (DPR), Harry Poernomo, menyatakan, pernbentukan holding migas menyebabkan rencana pembentukan Badan Usaha Khusus (BUK) yang rencananya masuk ke dalam Revisi Undang-Undang Nomor 22 Tahun 2001 tentang Migas berantakan.

Harry mengusulkan agar pemegang saham perusahaan Badan Usaha Milik Negara (BUMN) tidak dipegang oleh seorang Menteri BUMN semata, tapi harus juga dipegang oleh kementerian sektoral seperti Kementerian Keuangan. Sebab, jika otoritas hanya dipegang Menteri BUMN, hal itu bisa memunculkan kesewenang-wenangan dan kesemrawutan tata kelola BUMN.

Ditambah lagi minimnya sinergi pada pemerintah. Menurut Harry, hal itu terlihat pada wacana pembentukan holding migas oleh Menteri BUMN. Konsep holding itu mengakibatkan apa yang telah direncanakan, yakni koordinasi antara Kementerian ESDM dengan DPR dalam pembahasan RUU Migas menjadi berantakan. Pembahasan yang pelik dari Undang-Undang Migas adalah mengenai kelembagaan. 

"Di antaranya, kita mewacanakan adanya Badan Usaha Khusus (BUK). Nah, holding migas yang direncanakan Menteri BUMN sama sekali tidak sejalan dengan rancangan Undang-Undang Migas," katanya.

Karena itu, menurut Harry, Rapat Umum Pemegang Saham (RUPS) BUMN harus melibatkan kementerian sektoral dan ditambah Kementerian Keuangan. Jadi sekali lagi, pemegang saham bukan hanya Menteri BUMN.

Kontan, Page-14, Saturday, Jan 6, 2018

Upstream Oil and Gas Investment Not Recovered

Upstream oil and gas investment climate in Indonesia throughout 2017 has not yet recovered. A number of targets are not reached. There is an increase in state revenues as crude oil prices are rising although not significant.

In the explanation of the upstream oil and gas sector 2017 performance by the Upstream Oil and Gas Upstream Business Unit (SKK Migas), the realization of exploration and production investment is mentioned at 9.33 billion US dollars (almost Rp 126 trillion). This is still below the target of 12.9 billion US dollars (almost Rp 166 trillion).

Of the total investment, the realization of investment for exploration amounted to Rp 2.4 trillion or only 20 percent of the target of Rp 11.7 trillion.

"The realization for such exploration is very small. That's what spends only on big contractors. Small contractors do not exist, "said Head of SKK Migas Amien Sunaryadi.

Amien Sunaryadi

Amien said SKK Migas will seek to make exploration investment increase from time to time. The classic problem of obstacles to exploration activities, among others, is licensing. SKK Migas needs the support of many parties to make exploration activities in the field easier.

"In addition, investors should also not delay the process of holding goods and services during the exploration period," he said.

Deputy Head of SKK Migas Sukandar added that upstream oil and gas investment in 2017 is still affected by oil price. Investment planning in 2017 was made in previous years. Throughout 2016, the average price of crude oil is less than 40 US dollars per barrel.

"We expect this year there will be an increase in investment as oil prices continue to rise. In fact, WTI and Brent oil prices already exist above 60 US dollars per barrel. This is an opportunity for investors, "said Sukandar.

The realization of "lifting" low achievement of the production of ready-to-sell (lIifting) of oil in 2017 was recorded as much as 803,800 barrels per day. This achievement is lower than the benchmark APBN Change 2017 as much as 815,000 barrels per day.

Similarly, natural gas emissions are realized as much as 6.386 million standard cubic feet per day (MMSCFD). Achievements are or lower than the target, ie 6440 MMSCFD.

Deputy of Oil and Natural Gas Planning Jafee Arizon Suardin said the target of upstream oil and gas investment this year is set at 12.6 billion US dollars, equivalent to Rp 170 trillion. Of that amount, 810 million US dollars or Rp 10.9 trillion is allocated for exploration activities, the rest is for production. By 2018, there will be drilling of 103 exploration wells.

"The two-dimensional seismic survey plan in 2018 covers 1,753 square kilometers and a three-dimensional seismic survey of 356 square kilometers," said Jafee.

Although the target of oil and natural gas is not achieved, the realization of state revenue from the sector has increased. The realization of state revenues from upstream oil and gas activities in 2017 was 13.1 billion US dollars (Rp 176.8 trillion), higher than the benchmark APBN Change 2017 of 12.2 billion US dollars (Rp 164.7 trillion). The increase in crude oil price throughout 2017 allows for an increase in revenue of upstream oil and gas sector.

Up to the year 2026, there are 34 working areas upstream oil and natural gas out of contract period. The government is expected to be able to immediately decide on the continuation of operations in the 34 working areas. Thus, investment plans can be arranged in advance and delays in activities can be prevented or avoided.

IN INDONESIA

Investasi Hulu Minyak dan Gas Bumi Belum Pulih

Iklim investasi hulu minyak dan gas bumi di Indonesia sepanjang 2017 belum pulih. Sejumlah target tidak tercapai. Ada peningkatan penerimaan negara karena harga minyak mentah yang meningkat meskipun belum signifikan.

Dalam paparan kinerja sektor hulu minyak dan gas bumi 2017 oleh Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (SKK Migas), realisasi investasi eksplorasi dan produksi disebutkan sebanyak 9,33 miliar dollar AS (hampir Rp 126 triliun). Ini masih di bawah target 12,9 miliar dollar AS (hampir Rp 166 triliun).

Dari total investasi itu, realisasi investasi untuk eksplorasi sebesar Rp 2,4 triliun atau hanya 20 persen dari target yang sebanyak Rp 11,7 triliun.

”Realisasi untuk eksplorasi sejumlah itu sangat kecil. Itu pun yang membelanjakannya hanya kontraktor-kontraktor besar. Kontraktor yang kecil-kecil tidak ada,” kata Kepala SKK Migas Amien Sunaryadi.

Amien mengatakan, SKK Migas akan berupaya agar investasi eksplorasi meningkat dari waktu ke waktu. Masalah klasik yang menjadi hambatan kegiatan eksplorasi, antara lain adalah perizinan. SKK Migas memerlukan dukungan banyak pihak agar kegiatan eksplorasi di lapangan menjadi lebih mudah.

”Selain itu, investor sebaiknya juga tidak menunda-nunda proses mengadakan barang dan jasa selama masa eksplorasi,” ujarnya.

Wakil Kepala SKK Migas Sukandar menambahkan, investasi hulu migas sepanjang 2017 masih dipengaruhi harga minyak Perencanaan investasi di 2017 dibuat pada tahun-tahun sebelumnya. Sepanjang 2016, rata-rata harga minyak mentah kurang dari 40 dollar AS per barrel.

”Kami berharap tahun ini ada peningkatan investasi mengingat harga minyak terus naik. Bahkan, harga minyak jenis WTI dan Brent sudah ada di atas 60 dollar AS per barrel. Ini kesempatan bagi investor,” kata Sukandar. 

Realisasi ”lifting” rendah pencapaian produksi siap jual (lifting) minyak 2017 tercatat sebanyak 803.800 barrel per hari. Pencapaian ini lebih rendah dari patokan APBN Perubahan 2017 yang sebanyak 815.000 barrel per hari.

Demikian pula, Iifting gas bumi yang terealisasi sebanyak 6.386 juta standar kaki kubik per hari (MMSCFD). Pencapaian tersebut atau lebih rendah daripada target, yakni 6.440 MMSCFD.

Deputi Perencanaan SKK Migas Jafee Arizon Suardin mengatakan, target investasi hulu migas tahun ini dipatok 12,6 miliar dollar AS, setara Rp 170 triliun. Dari jumlah itu, 810 juta dollar AS atau Rp 10,9 triliun dialokasikan untuk kegiatan eksplorasi, selebih-nya untuk produksi. Pada tahun 2018, direncanakan terdapat pengeboran terhadap 103 sumur eksplorasi.

”Rencana survei seismik dua dimensi pada 2018 seluas 1.753 kilometer persegi dan survei seismik tiga dimensi seluas 356 kilometer persegi,” ujar Jafee.

Meskipun target Iifting minyak dan gas bumi tidak tercapai, realisasi penerimaan negara dari sektor itu meningkat. Realisasi penerimaan negara dari kegiatan hulu migas 2017 adalah 13,1 miliar dollar AS (Rp 176,8 triliun), lebih tinggi daripada patokan APBN Perubahan 2017 yang sebesar 12,2 miliar dollar AS (Rp 164,7 triliun). Kenaikan harga minyak mentah sepanjang 2017 memungkinkan adanya peningkatan penerimaan sektor hulu migas ini.

Sampai dengan tahun 2026, terdapat 34 Wilayah kerja hulu migas yang alam habis masa kontraknya. Pemerintah diharapkan segera bisa memberi keputusan mengenai kelanjutan operasi pada 34 Wilayah kerja tersebut. Dengan demikian, rencana investasi bisa disusun jauh-jauh hari dan penundaan kegiatan bisa dicegah atau dihindari.

Kompas, Page-17, Saturday, Jan 6, 2018

Masela Block Produces 2027

Special Unit for Upstream Oil and Gas Activities (SKK Migas) is targeting the Masela block to produce in 2027. Currently, Inpex Corporation as the block operator performs pre-front end engineering design (pre-FEED).

Amien Sunaryadi 

Head of SKK Migas Amien Sunaryadi targets the initial design of Masela block development to be completed by the middle of this year. The pre-FEED results will be used to finalize the proposed plan of development (PoD) by the end of this year.

Later this year POD Masela finished. The more backtracking time, the potential for further disruption, the higher the potential difficulty, "he said yesterday (5/1).

Masela Block

In the pre-FEED, Inpex will conduct a study on the location of refineries on land and the concept of floating production storage and offloading (FPSO). Refinery production capacity of 9.5 million tonnes per year (mtpa) for liquefied natural gas (LNG) and 150 million cubic feet per day (mmscfd) for pipe gas.

Masela eternal block development project finally decided to be built on land (onshore), precisely in West Southeast Maluku. Previously, the government had not yet decided on the development site between West and Southeast Maluku.

"Local government can finally receive the exploration done in West Southeast Maluku," added Amien.

IN INDONESIA

Blok Masela Berproduksi 2027

Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (SKK Migas) menargetkan blok Masela dapat berproduksi pada 2027. Saat ini Inpex Corporation selaku operator blok melakukan tahap desain awal (pre-front end engineering design/pre-FEED).

Kepala SKK Migas Amien Sunaryadi menargetkan desain awal pengembangan blok Masela bisa diselesaikan pertengahan tahun ini. Hasil pre-FEED itu akan digunakan untuk menyelesaikan proposal rencana pengembangan lapangan (plan of development/ PoD) pada akhir tahun ini. 

Akhir tahun ini POD Masela selesai. Semakin mundur waktunya, potensi gangguan makin nambah, potensi kesulitan semakin tinggi,” katanya kemarin (5/1).

Dalam pre-FEED itu, Inpex akan melakukan studi mengenai lokasi kilang di darat dan konsep fasilitas produksi terapung (floating production storage and offloading/FPSO). Kapasitas produksi kilang sebesar 9,5 juta ton per tahun (mtpa) untuk gas alam cair (LNG) dan 150 juta kaki kubik per hari (mmscfd) untuk gas pipa.

Proyek pengembangan blok abadi Masela akhirnya diputuskan untuk dibangun di darat (onshore), tepatnya di Maluku Tenggara Barat. Sebelumnya, pemerintah belum memutuskan lokasi pengembangan antara Maluku Tenggara Barat dan Maluku Barat Daya. 

”Pemerintah Daerah setempat akhirnya bisa menerima eksplorasi dilakukan di Maluku Tenggara Barat," imbuh Amien.

Jawa Pos, Page-6, Saturday, Jan 6, 2018

Oil and Gas Expansion

RIG oil drilling in the Pacific Ocean Friday (5/1). The US President Donald Trump announced plans to expand oil drilling in Seal Beach, California, on Friday (5/1). On the other hand, the realization of lifting or production of ready-to-sell Indonesian oil in 2017 RIG oil drilling in the Pacific Ocean, Friday (5/1).

US President Donald Tmmp announced plans to expand oil drilling in Seal Beach, California, on Friday (5/1). On the other hand, the realization of lifting or production of ready-to-sell Indonesian oil in 2017.

IN INDONESIA

Ekspansi Migas

RIG pengeboran minyak di Samudera Pasifik Jumat (5/1). Presiden AS Donald Trump mengumumkan rencana ekspansi pengeboran minyak di Seal Beach, California, Jumat (5/1). Di sisi lain, realisasi lifting atau produksi siap jual minyak Indonesia pada 2017 RIG pengeboran minyak di Samudera Pasifik, Jumat (5/1).

Presiden AS Donald Tmmp mengumumkan rencana ekspansi pengeboran minyak di Seal Beach, California, Jumat (5/1). Di sisi lain, realisasi lifting atau produksi siap jual minyak Indonesia pada 2017.

Jawa Pos, Page-5, Saturday, Jan 6, 2018

East Kalimantan and Attaka Auctions

The ESDM Ministry will accelerate the auction process of East Kalimantan Block and Attaka in East Kalimantan. EMR Deputy Minister of Energy and Mineral Resources Arcandra Tahar said preparations for the auction of the two blocks are still underway. It is expected that it can be completed this month so the auction can be done soon.

Arcandra Tahar 

"The auction will speed us up. If the data is complete, I target this January to open the auction including other blocks, "he said at the office Ministry of ESDM.

With the accelerated auction schedule, the announcement of the winner is expected to be faster. Since the end of the contract in East Kalimantan Block is near, on October 24, 2018.

However, Arcandra has not been able to reveal details of the preparations that are being made. Clearly, the sooner the winning bidder gets, the longer the time it takes to make the transition. 

Ego Syahrial

    Previously Managing Director of Oil and Gas Directorate General of the Ministry of Energy and Mineral Resources Ego Syahrial said the two-block auction will be conducted in March 2018. While the announcement of the auction winner is targeted in August 2018.

"The most difficult is to prepare the data for the bid document. It's being processed, but overall we're 80%. The signature of KKKS [contractor of cooperation contract] that we expect on 24 August. So, there is a time of 2 months until the process of accelerated transition, "he said.

Ego assesses time 2 months enough for the transition period. Where necessary, the government may request an existing contractor to undertake interim management in order that production is not affected. Both blocks have actually been offered by the government to PT Pertamina (Persero). However, the government-owned company is returning to the government because it is considered not meet the scale of the economy according to company calculations.

The government also had to auction both of them simultaneously because the processing of the products was united or joined. Especially for the Attaka Block, the government has assigned Pertamina to become a temporary operator. The reason, the contracts of Chevron USA and Inpex Corporation Japan as a contractor has been exhausted in 2017.

Later the two blocks will be auctioned along with other oil and gas blocks that will be exhausted and unsold contracts for the last three years scheduled for January 2018. 

Syamsu Alam

Previously, Upstream Director of Pertamina Syamsu Alam said it had submitted a proposal for the plan to manage oil and gas blocks which will expire contract. It also awaits the government's decision whether the company gets the green light to manage the blocks.

"It should be asked to the ESDM because the decision is there," said Syamsu.

IN INDONESIA

Lelang East Kalimantan dan Attaka

Kementerian ESDM akan mempercepat proses lelang Blok East Kalimantan dan Attaka di Kalimantan Timur. Wakil Menteri ESDM Arcandra Tahar mengatakan persiapan untuk lelang kedua blok tersebut masih dilakukan. Diharapkan hal itu bisa diselesaikan pada bulan ini agar lelang bisa segera dilakukan.

“Lelang akan kita percepat. Kalau data-data selesai, saya targetkan Januari ini buka lelang termasuk blok-blok lain,” ujarnya di kantor Kementerian ESDM.

Dengan dipercepatnya jadwal lelang, maka pengumuman pemenangnya pun diharapkan menjadi lebih cepat. Karena masa akhir kontrak di Blok East Kalimantan sudah dekat, yakni pada 24 Oktober 2018.

Namun, Arcandra belum bisa mengungkapkan detail persiapan yang sedang dilakukan. Yang jelas, semakin cepat pemenang lelang diperoleh, semakin panjang waktu yang dimiliki untuk melakukan transisi. 

     Sebelumnya Pelaksana Tugas Direktur Jenderal Minyak dan Gas Bumi Kementerian ESDM Ego Syahrial menyatakan lelang dua blok tersebut akan dilakukan pada Maret 2018. Sementara pengumuman pemenang lelangnya ditargetkan pada Agustus 2018.

“Yang paling sulit itu menyiapkan data-data untuk bid document. Itu sedang diproses, tapi secara overall kita sudah 80%. Tanda tangan KKKS [kontraktor kontrak kerja sama] itu kita harapkan di 24 Agustus. Jadi, ada waktu 2 bulan sampai proses dipercepat peralihan,” katanya.

Ego menilai waktu 2 bulan cukup untuk masa peralihan. Apabila diperlukan, maka pemerintah bisa meminta kontraktor eksisting untuk melakukan pengelolaan sementara supaya produksi tidak terdampak. Kedua blok tersebut sebenarnya telah ditawarkan pemerintah kepada PT Pertamina (Persero). Namun, perusahaan milik pemerintah ini mengembalikan kepada pemerintah karena dianggap tidak memenuhi skala keekonomian menurut perhitungan perusahaan.

Pemerintah pun harus melelang keduanya secara bersamaan karena pemrosesan hasil produksinya disatukan atau digabung. Khusus untuk Blok Attaka, pemerintah telah menugaskan Pertamina untuk menjadi operator sementara. Alasannya, kontrak Chevron USA dan Inpex Corporation Jepang sebagai kontraktor telah habis pada 2017.

Nantinya kedua blok tersebut akan dilelang bersama dengan blok-blok migas lain yang akan habis kontrak dan yang tidak laku selama tiga tahun terakhir yang dijadwalkan pada Januari 2018. 

     Sebelumnya, Direktur Hulu Pertamina Syamsu Alam mengatakan pihaknya telah menyampaikan proposal untuk rencana pengelolaan blok-blok migas yang akan habis kontrak. Pihaknya pun menanti keputusan pemerintah apakah perseroan mendapat lampu hijau untuk mengelola blok-blok tersebut. 

“Sebaiknya ditanyakan ke ESDM karena keputusan ada di sana,” kata Syamsu. 

Bisnis Indonesia, Page-9, Saturday, Jan 6, 2018

Chevron Still Manages East Kalimantan Block

The Ministry of Energy and Mineral Resources (ESDM) asked Chevron to maintain the East Kalimantan Block, so that production does not fall during the transition period. East Kalimantan Block will expire on October 24, 2018. While the Attaka Block whose contract has been exhausted while managed by Pertamina.

Acting Director General of Oil and Gas (Directorate General of Oil and Gas) Ministry of ESDM Ego Syahrial stated, East Kalimantan Block and Attaka Block will be combined alias diunitisasi. This is considering the distance of the two blocks are close together. The decision was also due to PT Pertamina not willing to manage the two blocks termination it.

Because Pertamina is unwilling, then the two blocks whose contract is made into one will be auctioned specifically. Currently, East Kalimantan and Attaka Block auction have reached 80%.

"The rather heavy it is preparing the data bid document," said Ego, who also serves as Secretary General of the Ministry of Energy and Mineral Resources.

He targets, preparation of the auction can be completed in March 2018. The government will wait for the bidding of the combined blocs for four months. So the announcement of the winner is done in August. Exactly two months before Chevron's contract in East Kalimantan runs out.

"The winner will sign the contract immediately, I expect the next August 24, 2018. So there is time for two months until the transition process," he said.

So, in the meantime East Kalimantan Block will be managed by Chevron. This decision was taken to keep East Kalimantan's production from being too impacted in this short transitional period.

"The government asks the existing contractor to maintain the performance of the two blocks," he said.

While related to the Attaka Block, although Pertamina is unwilling, the government still assigns State-Owned Enterprises (SOEs) as temporary operators until there are winners from the second auction of the block. For information, Inpex Corporation Japan's contract in Attaka Block has expired at the end of 2017 yesterday.

IN INDONESIA

Chevron Masih Kelola Blok East Kalimantan

Kementerian Energi dan Sumber Daya Mineral (ESDM) meminta Chevron tetap mengelola Blok East Kalimantan, agar produksi tidak turun saat masa peralihan. Blok East Kalimantan akan habis kontrak pada 24 Oktober 2018. Sedangkan Blok Attaka yang kontraknya sudah habis sementara dikelola oleh Pertamina.

Pelaksana Tugas Direktur Jenderal Migas (Dirjen Migas) Kementerian ESDM Ego Syahrial menyatakan, Blok East Kalimantan dan Blok Attaka akan digabungkan alias diunitisasi. Ini mengingat jarak kedua blok tersebut berdekatan. Keputusan itu juga karena PT Pertamina tidak bersedia mengelola kedua blok terminasi itu.

Karena Pertamina tidak bersedia, maka dua blok yang kontraknya dijadikan satu itu akan dilelang secara khusus. Saat ini persiapan lelang Blok East Kalimantan dan Attaka sudah mencapai 80%. 

"Yang agak berat itu mempersiapkan data-data bid document," kata Ego, yang juga menjabat sebagai Sekretaris Jenderal Kementerian ESDM.

Dia menargetkan, persiapan lelang tersebut bisa selesai pada bulan Maret 2018 mendatang. Pemerintah akan menunggu penawaran terhadap kedua blok yang digabung tersebut selama empat bulan. Sehingga pengumuman pemenang dilakukan bulan Agustus. Tepatnya dua bulan sebelum kontrak Chevron di East Kalimantan habis.

"Pemenangnya langsung menandatangani kontrak. Saya mengharapkan 24 Agustus 2018 mendatang. Jadi ada waktu selama dua bulan sampai proses peralihan," ujarnya.

Jadi, sementara ini Blok East Kalimantan akan tetap dikelola oleh Chevron. Keputusan ini diambil untuk menjaga produksi East Kalimantan agar tidak terlalu terdampak dalam masa peralihan yang singkat ini. 

"Pemerintah meminta kontraktor eksisting menjaga kinerja kedua blok tersebut," katanya.

Sementara terkait Blok Attaka, meski Pertamina tidak bersedia, pemerintah tetap menugaskan Badan Usaha Milik Negara (BUMN) itu sebagai operator sementara sampai ada pemenang dari lelang kedua blok itu. Sebagai informasi, kontrak Inpex Corporation Japan di Blok Attaka telah berakhir pada akhir tahun 2017 kemarin.

Kontan, Page-14, Saturday, Jan 6, 2018

Pertamina needs to improve work plan

The government has given state-owned energy giant Pertamina until the end of January to improve its work program and budget (WPSCB) proposals for four oil and gas blocks. Otherwise, those blocks will remain in the hands of their current operators.

oil and gas blocks

The Energy and Mineral Resources Ministry mandated in January 2017 that Pertamina take over eight oil and gas blocks, all of which would see their contracts with their current operators expire in 2018. The blocks are: Tuban, Ogan Komering, Sanga-sanga,  Southeast Sumatra, North Sumatra Offshore (NSO). Tengah, East Kalimantan and Attaka.

However, the ministry has given a chance to the current contractors of four of the eight blocks to submit a proposal to extend their operatorship. The four blocks are Tuban, Ogan Komering, Sanga-sanga and Southeast Sumatra.

The ministry has compared the WP&B proposed by the four contractors with the ones proposed by Pertamina.

“ln general, the current contractors of the four blocks have submitted better proposals than Pertamina,” the ministry’s secretary-general, Ego Syahrial, said on Thursday.

“We have handed over all of the documents [from the current contractors] to Pertamina. So, now the ball is in Pertamina’s court. If Pertamina can improve and match its proposals with other contractors in the next few weeks, we will grant the four blocks to the company” Ego said Pertamina. did not have to single-handedly operate the four blocks. If needed, the company could jointly operate those blocks with other contractors while still controlling the blocks’ majority stake, he added.

At present, Pertamina’s subsidiary Pertamina Hulu Energi jointly operates the Tuban block in East Java and the Ogan Komering block in South Sumatra with China’s PetroChina and Singapore’s Jadestone Energ, respectively.

China National Odshore Oil Corporation (CNOOC) operates and holds the majority stake in Southeast Sumatra block. Mean-while, the Sanga-sanga block in East Kalimantan is jointly operated by several contractors, including local firm PT Saka Energi Indonesia, ltaly’s Eni and the United States-based Overseas Petroleum and Investment Corp. (OPIC).

“We will still show our partiality for Pertamina as a national oil company for these four blocks. We plan to make a decision on these four blocks in January” Deputy Energy and Mineral Resources Minister Arcandra Tahar said.

Aside from the four blocks, the government has officially ordered Pertamina to take over the Tengah and NSO blocks. The ministry says Pertamina will be able to operate the Tengah block more efficiently because the block has unitized operations with the Mahakam block in East Kalimantan, which was taken over recently by Pertamina from France’s Total E&P lndonesie and Japan’s lnpex 

Pertamina is also expected to merge the operation of the NSO block with the North Sumatra B (NSB) block, all of which are currently operated by Pertamina Hulu Energi, for further efficiency For the East Kalimantan and Attaka blocks, Pertamina will return these two blocks to the government. 

The firm said it would be too costly to bear the burdens coming from the blocks’ abandonment and site restoration. Hence, the ministry plans to offer these two blocks through a special auction in March. 

“We hope we can find the tender winners and sign contracts with them by the end of August,” Ego said.

The ministry previously said it would open another tender in January for 22 oil and gas blocks that failed to attract investors in 2015-2016 auctions, as well as for ll other new blocks.

“We are still evaluating which blocks will be put up for auction, as we will only offer blocks with good seismic data,” Ego said, 

While adding that the ministry had found it difficult to improve the seismic data quality of many oil and gas blocks in the country due to a lack of budget.

This year, the ministry has allocated Rp 58 billion (US$4.32 million) to conduct 2D seismic surveys in Southeast Sulawesi and West Kalimantan, down from Rp 75 billion in 2017.

Jakarta Post, Page-13, Friday, Jan 5, 2018