Pertamina's Investment in Mahakam Approved

The Ministry of Energy and Mineral Resources finally approved the amendment to the Mahakam Block contract. With this amendment, PT Pertamina can enter the Mahakam Block before the expiration of the old operator contract. Currently, the Mahakam Block is managed by PT Total E&P Indonesie and will expire next year.

PT Total E&P Indonesie

The Minister of Energy and Mineral Resources, Ignasius Jonan, said that he approved the amendment to the production sharing contract for the Mahakam work area. The amendment to the cooperation contract was signed by SKK Migas and PT Pertamina Hulu Mahakam, as new investors for the Mahakam Block, Tuesday (25/10) at the Ministry of Energy and Mineral Resources office.

Blogger Agus Purnomo in SKK Migas

Jonan said that currently, the Mahakam Block gas production reaches 1,747 mmscfd and oil-condensate 69,186 bpd. With this amendment, it is hoped that the Mahakam Block production in 2018 can be maintained. Understandably, with this contract amendment, Pertamina can start investing in the Mahakam block starting in 2017. 

All costs incurred by Pertamina in the transfer of management will be included in cost recovery in 2018. Deputy Minister of Energy and Mineral Resources Arcandra Tahar said, with the approval of the Mahakam Block contract amendment, Pertamina could participate in the discussion of the work program and project budgeting or work program and budget (WP&B) in 2017.

The discussion will be held on 24-25 November 2016. The WP&B will agree on the activities that will be proposed by Total E&P Indonesie, as the operator and Pertamina as the investor. Arcandra said that so far PT Total E&P Indonesie plans to invest in drilling in six wells and Pertamina in 19 wells. Pertamina Director Dwi Soetjipto said that to drill 19 wells, Pertamina would invest US$ 180 million.

Because this is indeed a block where there is a decline in production, if nothing is done, the decline will be very drastic. We invest early so that the decline is not too drastic. The supervision is from SKK Migas," said Dwi.

President Director of Total E&P Indonesie Hardy Pramono said that with this drilling activity, his party would maintain production as well as possible. Hardy said the gas production target in 2017 was 1.4 to 1.45 BCF and condensate oil was around 50,000 BPD.

Kontan, Halaman : 15, Rabu, 26 Okt 2016

Price Has Been Cut

State-owned enterprises in the gas transmission and distribution business have tried to reduce gas prices, including gas for the industry. The decline in gas prices is highly dependent on the location and condition of drilling wells as well as gas transmission and distribution lines. 

According to the Deputy for Energy, Regional Logistics, and Tourism at the Ministry of SOEs, Edwin Hidayat Abdullah, downstream gas prices have been cut a lot. He gave an example, the price of gas in North Sumatra has fallen from an average of 12 US dollars per million British thermal units (MMBTU) to below 10 US dollars per MMBTU.

State-owned companies engaged in the supply chain, namely gas transmission, and distribution, have cut their profit margins. In Lampung, PGN also lowered the selling price from 9.8 US dollars to 8 US dollars per MMBTU. The price of gas said Edwin, really depends on the location of the gas source or gas well and the length of the transmission and distribution pipeline. The upstream price component also needs to be looked at.

Wianda Pusponegoro

There are still several components that determine gas prices, such as taxes and toll fees set by BPH Migas. Vice President Corporate Communications PT. Pertamina Wianda Pusponegoro said that there are several gas price structures that reach consumers. In the upstream sector, the price of gas, including the price of liquefied natural gas, is set by the government with reference to international prices.

The cost of regasification is influenced by the amount of investment, operating and maintenance costs, and profit margins. In the downstream sector, transportation costs via transmission pipelines are also influenced by the 3 percent BPH Migas contribution, taxes, investment costs, and operational and maintenance costs. Gas distribution through the pipelines to end-users is also determined by profit margins, taxes, and operating and maintenance costs. To reduce gas prices, regulations are needed to regulate profit margins.

Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, I Gusti Nyoman Wiratmaja, said that efforts to streamline supply chains require gas traders or traders to build infrastructure. They are given the opportunity until 2018 which is called the transition period.

In one distribution network, the gas pipeline network may consist of several layers of traders. Because every trader makes a profit, the price of gas to the final consumer is high. The government is trying to regulate it by revising the Regulation of the Minister of Energy and Mineral Resources Number 6 of 2016 concerning Provisions and Procedures for Allocation and Utilization, as well as Natural Gas Prices.

PT PGN Batam Area Sales Head Amin Hidayat said the method of delivery and the number of parties involved were important factors in determining gas prices. Pipeline delivery from source to the user is the cheapest method to date. According to Amin, Batam is a lucky area.

The city can get gas supplies through pipes from the source to the end-user. Batam's gas pipeline network has reached all strategic points. Deputy Chairperson of the Upstream and Petrochemical Industry Committee at the Indonesian Chamber of Commerce and Industry (Kadin) Achmad Widjaja argued gas user industries as buyers did not question how many traders were involved in the gas supply chain. For industry, the most important thing was that gas prices were still economically acceptable. industry.

The government, in this case, the Minister of Finance, should decide whether it still wants state revenues in the upstream oil and gas sector or not? If you want to reduce it so that gas prices can go down, you have to make sure how much the reduction will be. That way, the decision to reduce prices will not be protracted. 

Chairman of the Association of North Sumatran Gas User Companies, Johan Brien, assessed that the gas trading chain is too long, causing the gas price to be very high to consumers. From the start, the policy of developing gas infrastructure in North Sumatra was criticized because it was deemed not pro-industrial. There are at least five companies that manage gas, starting from the Tangguh Block in West Papua, to Medan in North Sumatra.

Kompas, Page-20, Wednesday, Oct  26, 2016

Produksi Minyak Pertamina Meningkat

Produksi minyak PT Pertamina (Persero) pada triwulan III-2016 mencapai 322.840 barrel per hari. Jumlah itu meningkat 16,6 persen dibandingkan dengan produksi minyak pada triwulan III-2015 yang sebesar 276.770 barrel per hari. Produksi minyak itu melampaui target produksi minyak per hari pada 2016, yaitu 308.000 barrel per hari. Menurut Vice President Corporate Communication Pertamina Wianda Pusponegoro, di Jakarta, Selasa (25/10), peningkatan produksi itu antara lain karena optimalisasi produksi sumur-sumur minyak yang dikelola Pertamina. Sebagian besar produksi minyak berasal dari produksi di dalam negeri dan sebagian lagi berasal dari produksi sumur Pertamina di luar negeri.

Kompas, Hal : 18, Rabu, 26 Okt 2016

Oil and Gas Production is Hard to Maintain

       Ahead of the transfer of management from Total E&P to PT Pertamina on January 1, 2018, oil and gas production in the Mahakam Block, East Kalimantan was difficult to maintain. Pertamina was allowed to be involved in managing the block early and started investing US$180 million in 2017. 

Total

    With the reference exchange rate of the Jakarta Interbank Spot Dollar Rate of Rp. 13,022 per US dollar, Pertamina's initial investment was Rp. 2.343 trillion. Currently, the Mahakam Block gas production is 1,747 MMSCFD, and oil and condensate are 69,186 barrels per day.

the Mahakam Block

    Next year, gas production is estimated to drop to around 1,400 million MMSCFD, while oil and condensate production is around 50,000 barrels per day. Because this block is old, there will be a decline in production. We have prepared anticipation by planning 19 drilling wells with a fund of 180 million US dollars in 2017. The drilling of 19 wells will start production in 2018 or when Pertamina begins to fully manage the Mahakam Block.

    The hope is that if the 19 wells are in production, the rate of gas and oil production in the Mahakam Block can return to normal. Hardy said that the decline in production in the future is very likely due to the nature of fossil energy. However, the rate of decline is not too significant. 

    According to him, next year's production figure can still be considered high. Asked about Total's commitment to being involved in the management of the Mahakam Block when Pertamina took over, Hardy stated that his party had not yet made a decision.

    It will still see the development of the situation and conditions. Pertamina offers a 30 percent stake for Total in the Mahakam Block. As for the participation share for the regions (East Kalimantan Province) of 10 percent, Jonan asked Pertamina to implement the regulation. 

    There are regulations regarding participation shares for the regions. I believe Pertamina has a commitment of 10 percent and it must be implemented. It will be handed over to the local government.

Blogger Agus Purnomo in SKK Migas

    Pertamina can be involved in the management of the Mahakam Block early after the signing of the amendment to the Mahakam Block contract between Pertamina and SKK Migas. In addition to the issue of contract amendments, the government has also revised the Regulation of the Minister of Energy and Mineral Resources Number 15 of 2015 concerning the Management of Oil and Gas Working Areas whose Cooperation Contracts will expire. 

    Starting January 1, 2018, Pertamina took over the Mahakam Block as the operator with majority share ownership. As of December 31, 2017, the Mahakam Block is still managed by Total (France) and Inpex Corporation (Japan).

The share ownership of each investor is 50 percent. Currently, Total acts as operator. Citing the SKK Migas website, the Mahakam Block covering an area of ​​2,738.51 square kilometers began production in 1974.

Kompas, Page-17, Wednesday, Oct 27, 2016

Pertamina Invests in Mahakam

The process of transferring the management of the Mahakam Block oil and gas field from Total E&P Indonesie to PT Pertamina has been completed. The Minister of Energy and Mineral Resources, Ignasius Jonan, gave his approval for the amendment to the Product Sharing Contract (PSC) for the Mahakam block in East Kalimantan. Starting next year, Pertamina will be able to enter for investment.

The PSC amendment for the 2018-2038 period was signed by Pertamina Hulu Mahakam, a subsidiary of Pertamina, and SKK Migas. This change has become the entry point for Pertamina to carry out the transition process since 2017.

Blogger Agus Purnomo in SKK Migas

"The process of managing the Mahakam Block has been completed. The agreement has been signed and can be implemented immediately.

Jonan explained that currently, the production of oil and condensate from the Mahakam field has reached 69 thousand BPD. Meanwhile, gas production reached 1,747 mmscfd. He stated that Pertamina would immediately invest in it so that when it became an operator in January 2018, production would not decline. 

Deputy Minister Arcandra added that before the signing was done, the two companies had repeatedly held workshops. Starting from the matter of technology transfer, licensing issues, to the Mahakam Block workers. On the 24th and 25th of November, he said, the Mahakam work program & budget (WP&B) has been finalized.

the Mahakam Block

He said Total has been carrying out activities in the black goldfield since 1966 or for 50 years at the Iranian refinery. Pertamina, who proved its capacity to manage the Mahakam Block, Head of SKK Migas Amien Sunaryadi explained, the amendment to the Mahakam Block PSC was also supported by the revision of the Minister of Energy and Mineral Resources Regulation number 15 of 2020 concerning 15 oil and gas working areas whose contract terms would expire. This change became the basis and legal protection that Pertamina could incur operating costs in 2017.

This expenditure will be recognized as cost recovery in 2018. At that time the PSC (Pertamina) came into effect. Because it is still an investment, the 19 wells drilled by Pertamina are not for production. However, these wells were closed and opened in 2018 to maintain performance. Meanwhile, Total's six wells are still producing as usual. Pertamina president director Dwi Soetjipto explained that the investment for the 19 wells was prepared at USD 180 million or around Rp 2.3 trillion.

When asked about what guarantees were given so that there would be no decline in production, Dwi stated that there was actually a natural decline. His team already knew that and started preparing. If nothing is done, production will decrease. 

In accordance with the projection, if you can enter early, the decline will not be too significant. After this, Pertamina Hulu Mahakam and Total will finalize the transfer of operatorship agreement (TOA) and bridging agreement. Both are expected to be completed by the end of November.

President Director of Total Hardy Pramono said next year's production might drop. Gas, for example, becomes 1.45 mmscfd. For oil, it also fell to 50 thousand BPD. Regarding the offer for Total to re-enter Mahakam with a share of 30 percent, there has been no decision. 

The reason is that at this time the most important thing is the process of transfer of management so that production does not decrease. He stated that there would be further discussion before Total took up the offer to cooperate. Especially the discussion about terms and conditions.

Jawa Pos, Page-6, Wednesday, Oct 26,  2016

Transfer to Manage Mahakam Block, Pertamina Prepares IDR 2.3 T

PT Pertamina has prepared an investment fund of USD 180 million or equivalent to Rp. 2.33 trillion to drill 19 wells as part of the transition period for the takeover of the Mahakam Block in 2017.

Investments were made to maintain the block's production level after the Mahakam Block Production Sharing Contract amendment was made. On Tuesday (Oct 25), the Minister of Energy and Mineral Resources, Ignasius Jonan, gave his approval for the Amendment to the Production Sharing Contract for the Mahakam block.

This step was taken to maintain the continuity of oil and gas production during the transfer of management of the Mahakam Working Area. This profit-sharing contract amendment is part of the process of transferring the management of the Mahakam Block from Total E&P Indonesie to PT Pertamina (Persero). 

As is known, Total's contract in Mahakam expires on December 31, 2017. Starting January 1, 2018, Pertamina becomes the new operator of the block which produces 1,740 MMSCFD of gas and 69,186 bpd of oil. Pertamina President Director Dwi Soetjipto said that the Mahakam Block amendment for the 2018-2038 period had to be carried out.

This step is also a way for Pertamina to make a good transition from 2017. This profit-sharing contract amendment, said Dwi, allows Pertamina to start the transition step in managing the Mahakam Block earlier. Namely as of January 1, 2017, with the aim of maintaining the production level of this largest gas-producing working area.

Next, we will have detailed talks with Total E&P Indonesie as the current operator to ensure the transition goes well. Dwi explained that Pertamina Hulu Mahakam had finalized the preparation of the 2017 Mahakam Block Work Program and Budget (WP&B).

Based on the WP&B, assisted by Total E&P Indonesie as the executor, Pertamina Hulu Mahakam has prepared drilling activities in 2017 with a target of 19 wells with an investment value of around USD180 million. So it is expected that natural gas production from the Mahakam Block can be maintained at around 1.2 BSCFD and condensate around 20,000 BCPD in 2018-2019.

Blogger Agus Purnomo in SKK Migas

SKK Migas is preparing technical instructions for the implementation of Pertamina Hulu Mahakam WP&B with the principle of activities carried out by Total E&P Indonesie on a no-cost no-profit basis. With all costs and activities risks borne by Pertamina Hulu Mahakam. 

The drilling well is targeted to start production on January 1, 2018. Pertamina Hulu Mahakam together with Total E&P Indonesie and Inpex Corporation is finalizing a management transfer agreement which includes a Transfer of Operatorship Agreement (TOA) and a Bridging Agreement (BA). The TOA which was signed by the parties on July 29, 2016, will be aligned with the amendments to the Mahakam Block PSC.

Meanwhile, a Bridging Agreement is required related to the assistance for the implementation of Pertamina Hulu-Mahakam activities by Total Indonesie in the 2017 period. We are targeting the completion of the Bridging Agreement and amendment of the Transfer of Operatorship Agreement by the end of November 2016.

Deputy Minister of Energy and Mineral Resources Arcandra Tahar said, in addition to the 19 wells drilled by Pertamina Hulu Mahakam (PHM/a subsidiary of Pertamina that will manage Mahakam) in 2017, Total also drilled 6 wells. Hopefully, it can take place according to the previously agreed plan.

The Mahakam Production Sharing Contract was signed between SKK Migas and PT Pertamina Hulu Mahakam on 29 December 2015 and will become effective on 1 January 2018. With this amendment, Pertamina will invest in drilling wells in the block on 1 January 2017.

Duta Masyarakat, Page-1, Wednesday, Oct 26, 2016

Pertamina Ready to Drill in Mahakam

PT Pertamina is preparing an investment of US$ 180 million in the transition period for the Mahakam Block management after obtaining certainty through an amendment to the production sharing contract for the working area.

Blogger Agus Purnomo in SKK Migas

The amendment was signed by Pertamina's subsidiary, PT Pertamina Hulu Mahakam (PHM), SKK Migas, Tuesday (Oct 25). Pertamina President Director Dwi Soetjipto said the amendment was a way for the company to enter the Mahakam Block starting next year. The previous Production Sharing Contract/PSC was signed on 29 December 2015 and will become effective on 1 January 2018.

This PSC amendment allows Pertamina to begin the transition to the Mahakam Block management earlier, namely as of January 1, 2018, with the aim of maintaining the production level of this largest gas-producing working area. 

Total Oil

Dwi revealed that PHM had compiled the 2017 Mahakam Block Work Program and Budget/WP&B and was being finalized. Based on the WP&B, assisted by Total E&P Indonesie (TEPI) as the executor, Pertamina Hulu Mahakam is preparing for drilling activities next year with a target of 19 wells with an investment value of around US$ 180 million.

Inpex Corporation

PHM together with TEPI and Inpex Corporation is finalizing a management transfer agreement which includes a transfer of operatorship agreement (TOA) and a bridging agreement (BA). The TOA which was signed by the parties on 29 July 2016 will be aligned with the Mahakam Block PSC amendment, while the BA is required in relation to Total assistance in the implementation of PHM activities in the 2017 period.

The Minister of Energy and Mineral Resources, Ignasius Jonan, explained that the amendment must indeed be carried out to provide legal certainty in the transition period of Mahakam Block management.

This amendment can also maintain the continuity of oil and gas production as well as provide legal certainty in the implementation of activities during the transfer of operation of the Mahakam block working area from the existing contractor Total Indonesie to Pertamina.

Head of SKK Migas Amien Sunaryadi said the amendment would allow PHM to spend on operational costs. The expenditure will be recognized as part of the 2018 cost recovery.

President & General Manager of TEPI Hardy Pramono added that the transfer of management is the most important thing at this time. The goal is to prevent a drastic decline in oil and gas production. The point is how to keep decline to a minimum. Six wells were drilled for 2017 and 19 wells were drilled for Pertamina.

Bisnis Indonesia, Page-15, Wednesday, Oct 26, 2016

Pertamina's Production Reached Target

 

Pertamina's Vice President of Corporate Communication Wianda Pusponegoro explained, during the January-September 2016 period, the company's oil production of 322,840 BPD rose 16.6 percent compared to the same period last year of 276,770 BPD.

Wianda Pusponegoro

Gas production in January-September 2016 was 2,000 MMscfd, an increase of 15.8% compared to the same period last year of 1,730 MMscfd. Wianda explained that the increase in production was mostly obtained from domestic oil and gas blocks managed by state-owned companies operating in the oil and gas sector. This increase reaches around 72% -80% by domestic oil and gas fields. The rest are from abroad.

The contribution of oil and gas production from domestic blocks reached 550,000 boepd, while blocks located abroad contributed 120,000 boepd. Wianda explained that the results of oil and gas production up to the third quarter of 2016 had exceeded this year's target.

Pertamina's oil and gas production realization until the third quarter of 2016 has exceeded the target of 1.36%. Oil production is currently 4.81% higher than the target by the end of this year of 308,000 BPD. The company's gas production until the third quarter of 2016 was 2.51% above this year's target of 1,951 MMscfd.

the Banyu Urip Field, Cepu Block

According to her, the Banyu Urip Field, Cepu Block and West Madura Offshore (WMO) Block managed by Pertamina Hulu Energi are still supporting Pertamina's oil and gas production. 

PHE-WMO

Wianda emphasized that the company will ensure that oil and gas production will not decline even though oil prices are still low. Pertamina continues to spur oil and gas production through organic and inorganic growth or the acquisition of other oil and gas blocks. The company will also reduce production operating costs upstream by working on projects that are fast in production.

With these efforts, the oil and gas State-Owned Enterprise (BUMN) has set a very high oil and gas production target next year, namely 863,000 boepd. The target details 688,000 boepd from existing blocks and the remaining 175,000 boepd and acquisitions of new blocks and takeovers of blocks whose contracts have expired.

The oil and gas production target in 2017 consists of oil which is expected to increase by 36 percent to 438,000 BPD, with details of 335,000 BPD coming from existing blocks, and 103,000 BPD from new blocks. Next year's gas production is targeted to increase 13 percent to 2,278 MMscfd consisting of 1,858 MMscfd existing blocks and 450 MMscfd new blocks. 

Wianda explained that the increase in the oil and gas production target next year will be supported by the company's plan to acquire several new oil and gas blocks abroad.

Bisnis Indonesia, Page-15, Wednesday, Oct 26, 2016

Regulatory Reform Needs, Accelerate Oil and Gas Infrastructure

According to an economic observer from Airlangga University, Dr. Nafik HR, the current government must reform its economic policies which are still using a neoliberal paradigm by replacing them with economic policies that are in favor of the people's and national interests and of course constitutional.

Let's just say frankly that the abundant natural wealth so far has been managed by foreign parties, and it is very profitable for them. Therefore, this is what must be taken over to become fully national control.

Then protect the control and development as well as the use of alternative energy such as geothermal, hydropower, solar power, and others that are still very potent. Later it can be managed by state companies such as Pertamina or other national private companies, to help the Indonesian government reduce national imports and in order to increase the production of domestic energy resources and consumption.

Of course, to manage this abundant oil and gas sector and alternative energy, Pertamina needs full support, especially regulations from the government, because so far it turns out that, in terms of managing oil and gas resources, Pertamina is not given the main authority and especially when compared to foreign companies such as Petronas (Malaysia). ), Shell (Netherlands), Chevron (USA), Total (France), ConocoPhillips (USA), ExxonMobil (USA), CNOOC (China), ENI (Italy), KUFPEC (Kuwait), British Petroleum (UK), and so. Just look at how the Regulation of the Minister of Energy and Mineral Resources Number 15 of 2015 is actually very detrimental to Pertamina.

So that whenever this country is declared to exist, the hope that this nation will have energy independence will definitely not be realized. The government's mistakes in the past in managing our natural wealth should be used as a lesson so that in the future it will be returned again for the prosperity of the people.

A legal observer from the University of Muhammadiyah Surabaya (UMS) Umar Sholahudin assessed that regulation is still seen as one of the homework that must be done in national development planning. Umar admits that there are many overlapping, multi-interpreted, disharmony, or inconsistent laws and regulations, all of which actually disturb the investment climate or economic growth, for example, there are regulations governing the same sector but with different mechanisms.

Not a single state institution knows the exact number of laws and regulations issued by the central government and local governments. It means that the government, and the House of Representatives (DPR), are not serious about reforming regulations. The Minister of Energy and Mineral Resources Regulation No. 15/2015 on the management of Oil and Gas working areas whose contract period will expire is very clearly detrimental to Pertamina as a state company.

This ministerial regulation considers Pertamina to be the same as other oil and gas companies when it wants to take over the management of the oil and gas Working Area (WK) which will expire. The full authority of the Ministry of Energy and Mineral Resources to choose/determine which companies will be granted oil and gas management concessions will undermine Pertamina's important role.

In fact, the ministerial regulation has clearly stated that the government does not at all give guarantees to Pertamina to control the concession of the oil and gas working area which will expire, even though there has been a Government Regulation of the Republic of Indonesia Number 35 of 2004 which favors the national interest in terms of controlling national oil and gas resources.

In short, Pertamina must be more empowered, play a dynamic role in obtaining full concessions or the holder of all concessions for all projects at the forefront of the oil and gas and energy sectors so that they have a major impact on Pertamina's progress, and can choose partners if necessary.

In the 2015-2019 National Medium-Term Development Plan (RPJMN) stipulated by Presidential Regulation No. 2 of 2015, energy security is described as to the extent to which energy can be provided in a timely manner and with guaranteed availability, affordable prices, and acceptable quality.

The indicators are the amount of energy, the availability of infrastructure, the price of energy, the quality of energy, as well as the energy portfolio or mix. Energy security also has an element of sustainability so its management must pay attention to the carrying capacity of the environment. According to Dwi Sutjipto, the government is serious about realizing energy independence, as evidenced by the acceleration in the development of energy infrastructure projects.

Various regulations stimulate the development of energy sources at a time when there is a lack of discovery of national oil and gas reserves and fluctuations in world oil prices. The acceleration of energy infrastructure is the main key to creating energy independence now and in the future.

According to Dwi Sutjipto, Pertamina has become the backbone of national energy fulfillment. Not only contributing to the production of energy sources in the form of oil and natural gas which contribute as foreign exchange for the country, Pertamina also has the task of providing and distributing the ever-increasing supply of fuel oil (BBM) and gas.

Pertamina's Vice President of Corporate Communication Wianda Pusponegoro explained as a national oil company (NOC) Pertamina has the responsibility to ensure that energy supply is always in a safe condition for national energy security, under any circumstances. In order for this to be realized, Pertamina has launched 5 strategic priorities, namely, the development of the upstream sector, efficiency in all lines, increasing the capacity of refineries and petrochemicals, developing infrastructure and marketing, and improving the financial structure.

Wianda Puponegoro

According to Wianda, the five strategic priorities are implemented through various innovations. Pertamina's innovations include ensuring that all projects to support energy independence continue. Such as refinery development projects and the construction of new refineries, as well as the development of marketing infrastructure continues according to the established roadmap. International business development is a critical factor for Pertamina to develop into an international class company and to support the realization of national energy security.

Bhirawa, Page-4, Wednesday, Oct 26, 2016

Bontang Refinery Project Using Rhino NGL's Assets

PT Pertamina will use the assets of PT Badak NGL to accelerate the construction of a new fuel oil (BBM) refinery with a capacity of 300,000 barrels per day in Bontang, East Kalimantan.

Pertamina's Director of Processing and Petrochemical Megaprojects, Rachmad Hardadi, stated that a number of supporting infrastructure for the operation of the Badak NGL liquefied natural gas (LNG) refinery are 21 units of high-quality power plant boilers, and storage tanks can be used to support the operation of the Bontang BBM refinery. Badak LNG can support the BBM refinery project, so it will accelerate the project.

The prospective BBM refinery area that is already available next to Badak NGL's operational location will accelerate the project even more. Badak NGL is a subsidiary of Pertamina with a 50% share ownership.

Hardadi said that currently, Pertamina is still waiting for the appointment of the International Finance Corporation (IFC) as a consultant to be appointed by the government in partner selection. The selection of partners for the Bontang refinery development has been accelerated to the end of 2017. On the other hand, Pertamina is also preparing a bankable feasibility study which is also targeted for completion in 2017.

Kontan, Page-14, Tuesday, Oct 25, 2016