Indonesia braces for gas oversupply

Indonesia is bracing itself for an unexpected oversupply of gas amid slowing domestic demand, partly due, to the government’s poor planning in arranging the country’s gas balance.

The country was projected to see a gas shortage amounting to 1,329 million standard cubic feet per day (mmscfd) last year, according to the 2016-2035 gas balance formulated by the Energy and Mineral Resources Ministry. 

The shortage was expected to gradually fall to 903 mmscfd of gas in 2018, before soaring once again to 1,670 mmscfd in 2019. However, actual gas demand in 2016, including for domestic market and exports, stood at only 6,676 mmscfd of gas, far below the projected 8,072 mmscfd stated in the gas balance, according to data compiled by state-owned gas distributor PT Perusahaan Gas Negara (PGN).

As a result, PT Badak NGL, the operator of a major liquefied natural gas (LNG) plant in Bontang, East Kalimantan, has failed to find domestic buyers for 38 LNG cargoes this year, or 22.2 percent of its full-year production of 171 cargoes. The company has also estimated there will be 47 uncommitted LNG cargoes next year from a total production of around 160 to 170 cargoes.

“The actual demand is far below what has been planned by the government,” PGN head of marketing and product development Adi Munandir said recently. 

“If the government fails to respond properly to this situation, there will be a prolonged oversupply of gas in the country.”

Adi said such a mismatch between supply and demand could occur because there had been no integrated roadmap on gas infrastructure development nation-wide. 

Previously in October, Deputy Energy and Mineral Resources Minister Arcandra Tahar said his side would soon revise Indonesia’s gas balance to align it with the current market condition, especially considering the soaring number of uncommitted LNG cargoes.

“We will improve the gas balance so that the projections can be more reliable and we can calculate carefully whether or not we need to import LNG in the future,” Arcandra said.

The Industry Ministry has projected that gas demand from industrial sector will gradually increase to 903,356.5 million British thermal units (mmbtu) in 2019 from 782,829.4 mmbtu last year by taking into account the development of a number of special economic zones (KEKS) in the country.

As of today, the government has granted KEK status to 12 areas in various regions. Nonetheless, the development of such projects has moved at a snail’s pace, partly due to land procurement problems. Subsequently, it has been difficult for investors to realize their committed investment at those KEKS.

Meanwhile, state electricity Firm PLN initially estimated that Indonesia’s annual gas demand for power generation would increase to 2,805 billion British thermal units per day (bbtud) in 2026 from 1,548 bbtud in 2017, especially considering its plan to develop new gas-fueled and combined-cycle power plants worth 24.4 gigawatts (GW) in the next decade.

But the projection might no longer be relevant as the company has revealed a plan to postpone the development of several gas-fueled facilities, particularly the power plants projected to be used as peaker plants, due to slower-than-expected electricity sales. Hence, its annual gas demand will subsequently fall.

This situation occurs at a time when Indonesia has just started new production at dozens of oil and gas fields. Between January and October, 14 upstream projects were on stream with an estimated peak production rate of 21,280 barrels of oil per day (bopd) and 1,193.7 mmscfd of gas, according to the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas).

The country will also see additional gas production of 1,120 mmscfd from the Gendalo and Gehem fields in Makassar Strait once they are on stream in the 2022-2023 period. Meanwhile, the Jambaran-Tiung Biru field in East Java is slated to produce 172 mmscfd of gas by 2020. Moreover, train 3 of the Tangguh LNG plant in West Papua is also projected to commence production with a capacity of 3.8 million tons per annum (mtpa) in 2020.

Jakarta Pos, Page-13, Thursday, Dec 28, 2017

The Government Is Not Extending The Auction Of Oil and Gas Blocks

The government decided not to extend the auction of oil and gas blocks that ended on 29 December. Oil and gas companies are asked to re-enter their tender documents.

Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar said it hoped oil and gas companies to enter their auction documents until the end of this year. because the deadline for submitting documents has been set by the end of this December. While the auction will no longer be extended.

"No renewed auction of oil and gas blocks. The oil and gas company should file a tender document now, "he said in Jakarta.

As it is known, the government has expanded the first time of the auction for the first phase of oil and gas blocks in 2017. The auction of oil and gas blocks has been postponed due to waiting for the government regulation (PP) regulating the taxation of gross split oil and gas contracts.

Not only that, in September, the government issued Ministerial Regulation 52/2017 which is a revision of Ministerial Regulation 8/2017 which became the basis of gross split oil and gas contract.

In the last announcement, the retrieval of the auction document of the oil and gas block is extended to 24 December. Furthermore, the limit of the submission of tender documents shall be until December 31, 2017. Initially, when it was announced in May, the auction deadline of the oil and gas block of direct bidding scheme was set on July 19.

Previously, Arcandra had revealed, as many as 20 auction documents have been accessed by bidders. Although not sure how many documents are returned, as many as five companies promise to enter the auction documents without waiting for the release of Government Regulation on gross split tax.

Regarding Government Regulation of gross split tax, Arcandra said, the design has been signed by the Minister of Finance and Minister of EMR.

"Still waiting for the signature President," he said.

It continues to oversee the process of making this Government Regulation to be issued soon and provide investment certainty. The regulation shall prescribe the taxes imposed and shall be exempted under the oil and gas gross split contract.

One of them, oil and gas companies will be exempt from Land and Building Tax and Import Duty. Likewise, for indirect taxes, oil and gas companies will not be taxed during the exploration period, ie from the approval of the plan of development (POD) to the first oil production (first oil).

Not only that, investors will also get a 10-year tax loss carryforward facility. This is because, at the beginning of the oil and gas project, oil and gas companies have not yet earned income from the project. Furthermore, all expenses incurred until the first drops of oil are produced will be tax deductions for up to 10 years.

Previously, the Secretary of the Board of Directors of Indonesian Petroleum Association (IPA) Ronald Gunawan revealed that the Government Regulation detailing the tax treatment for oil and gas contract scheme gross split awaited by oil and gas companies. Because all new oil and gas contracts are required to use this scheme.

"If the Government Regulation has been approved, we expect investors to be able to evaluate and make business decisions," he said.

The block auctioned by the government recorded 15 oil and gas blocks, 10 conventional oil and gas blocks and five non-conventional oil and gas blocks. A total of 10 blocks of oil and gas have the potential of oil reserves of about 830 million barrels and 22 trillion cubic feet of gas.

While the potential for oil for five non-conventional oil and gas blocks is about 640 million barrels and 17 trillion cubic feet of gas. For conventional oil and gas block auctioned through direct offer are Andaman I and Iaman Block II offshore Aceh, South Tuna Block offshore Natuna, Lampung Merak Block offshore and Banten-Lampung mainland, Pekawai Block offshore East Kalimantan, Block West Yamdena offshore and mainland Maluku, and Kasuri III Block in West Papua.

While offered with regular auctions are the Tongko Block offshore Natuna, East Tanimbar off the coast of Maluku, and the Mamberano Block on the mainland and offshore Papua.

IN INDONESIA

Pemerintah Tidak Perpanjang Lelang Blok Migas

Pemerintah memutuskan untuk tidak lagi memperpanjang masa lelang blok migas yang berakhir pada 29 Desember ini. Perusahaan migas diminta segera memasukkan kembali dokumen lelangnya.

Wakil Menteri Energi dan Sumber Daya Mineral (ESDM) Arcandra Tahar mengatakan, pihaknya berharap perusahaan migas memasukkan dokumen lelangnya sampai akhir tahun ini. karena batas waktu memasukkan dokumen telah ditetapkan pada akhir Desember ini. Sementara lelang tidak akan lagi diperpanjang.

“Tidak diperpanjang lelang blok migas. Perusahaan migas harus mengajukannya dokumen lelang sekarang,” kata dia di Jakarta.

Seperti diketahui, pemerintah sudah kali ketiga memperpanjang masa lelang blok migas tahap pertama 2017. Lelang blok migas terus ditunda penutupannya karena menunggu keluarnya peraturan pemerintah (PP) yang mengatur tentang perpajakan kontrak migas gross split.

Tidak hanya itu, pada September lalu, pemerintah mengeluarkan Peraturan Menteri 52/2017 yang merupakan revisi Peraturan Menteri 8/2017 yang menjadi dasar kontrak migas gross split.

Dalam pengumuman terakhir, pengambilan dokumen lelang blok migas diperpanjang hingga 24 Desember. Selanjutnya batas pemasukan dokumen lelang diberi waktu hingga 31 Desember 2017. Awalnya, ketika diumumkan dibuka pada Mei lalu, batas waktu lelang blok migas skema penawaran langsung ditetapkan pada 19 Juli.

Sebelumnya, Arcandra sempat mengungkapkan, sebanyak 20 dokumen lelang telah diakses oleh peserta lelang. Meski belum memastikan berapa dokumen yang dikembalikan, sebanyak lima perusahaan menjanjikan akan memasukkan dokumen lelangnya tanpa menunggu keluarnya Peraturan Pemerintah tentang pajak gross split.

Terkait Peraturan Pemerintah tentang pajak gross split, Arcandra menuturkan, rancangannya telah ditandatangani oleh Menteri Keuangan dan Menteri ESDM. 

“Masih menunggu Presiden tanda tangan,” ujarnya. 

Pihaknya terus mengawal proses pembuatan Peraturan Pemerintah ini agar dapat segera dikeluarkan dan memberikan kepastian investasi. Regulasi tersebut akan menetapkan pajak-pajak yang dikenakan dan menjadi pengecualian dalam kontrak migas gross split. 

Salah satunya, perusahaan migas akan dibebaskan dari Pajak Bumi dan Bangunan dan Bea Masuk. Demikian juga untuk pajak tidak langsung, perusahaan migas tidak akan dikenakan pajak selama masa eksplorasi, yakni dari persetujuan rencana pengembangan (plan of development/ POD) hingga produksi minyak pertama (first oil). 

Tidak hanya itu, investor juga akan memperoleh fasilitas penangguhan pembayaran pajak penghasilan (tax loss carry forward) 10 tahun. Hal ini lantaran pada awal proyek migas, perusahaan migas belum memperoleh pendapatan dari proyek yang dikerjakan. Selanjutnya, seluruh biaya yang dikeluarkan sampai dihasilkan tetes minyak pertama akan menjadi pengurang pajak sampai 10 tahun.

Sebelumnya, Sekretaris Board of Director Indonesian Petroleum Association (IPA) Ronald Gunawan mengungkapkan, Peraturan Pemerintah yang merinci tentang perlakuan perpajakan untuk kontrak migas skema gross split ditunggu oleh perusahaan migas.  Pasalnya, seluruh kontrak migas baru wajib menggunakan skema ini.

“Kalau Peraturan Pemerintah sudah disetujui, kami harapkan investor bisa evaluasi dan membuat business decision," ujarnya.

Adapun blok yang dilelang oleh pemerintah tercatat terdapat 15 blok migas, 10 blok migas konvensional dan lima blok migas non-konvensional. Sebanyak 10 blok migas konvensional ini memiliki potensi cadangan minyak sekitar 830 juta barel dan gas 22 triliun kaki kubik. 

Sementara potensi minyak untuk lima blok migas non-konvensional sekitar 640 juta barel dan gas 17 triliun kaki kubik. Untuk blok migas konvensional yang dilelang melalui penawaran langsung adalah Blok Andaman I dan Andaman II di lepas pantai Aceh, Blok South Tuna di lepas pantai Natuna, Blok Merak Lampung di lepas pantai dan daratan Banten-Lampung, Blok Pekawai di lepas pantai Kalimantan Timur, Blok West Yamdena di lepas pantai dan daratan Maluku, dan Blok Kasuri III di Papua Barat. 

Sementara yang ditawarkan dengan lelang reguler yakni Blok Tongko di lepas pantai Natuna, East Tanimbar di lepas pantai Maluku, dan Blok Mamberano di daratan dan lepas pantai Papua.

Investor Daily, Page-9, Thursday, Dec 28, 2017

Work on the Mahakam block, Pertamina Cooperate with Partners

PT Pertamina is an expert in partnering with partners as one of the strategies to manage the Mahakam block starting January 1, 2018. However, the company has not set which oil and gas company will be its partner.

"One of our strategies is partnership," said Pertamina President Director Elia Massa Manik in Jakarta.

However, cooperation with other oil and gas companies does not have to start on January 1, 2018. The release of corporate rights to the other party can be done anytime. It also has not confirmed whether Total E & P Indonesia and Inpex Corporation will re-join the Mahakam block, or there are other companies.

'"We'll see," he said.

Earlier, Total E & P Indonesie also said it wanted to rejoin the Mahakam Block if it could get 39% participation rights. Not only Total, Mubadala Petroleum, a UAE oil and gas company, expressed interest in joining the Mahakam block. This was conveyed by the leadership of Mubadala to the Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar last November.

Related letter from the Ministry of Energy and Mineral Resources (ESDM) which opens the opportunity Total and Inpex earn participation rights up to 39%, Elijah said not yet received his side.

"There is no letter to us," he said.

Last week, Deputy Minister of Energy and Mineral Resources Arcandra Tahar revealed that he had signed a letter allowing Pertamina to abandon the participation rights of Mahakam Block to another party up to 39%. This letter revises the letter sent in the ESDM Minister Sudirman Said's era that limits the maximum 30% participation allowance to be released.

"There's already a letter. It can be up to 39% (part of the participation is released), "said Arcandra.

Meanwhile, Upstream Director of Pertamina Syamsu Alam had stated, Pertamina able to work on Mahakam Block with or without partners.

"Are we able to manage the Mahakam? Capable, employees stay there, then we have some finance who want to join. So we wait until the end of the year, "said Alam.

Previously, as known Pertamina has signed a new contract of Blok Mahakam valid from January 1, 2018 at the end of 2015 ago. Under the contract, the company promised a signature bonus of US $ 41 million.

IN INDONESIA

Kerjakan Blok Mahakam, Pertamina Gandeng Mitra

PT Pertamina akal menggandeng mitra sebagai salah satu strategi dalam mengelola Blok Mahakam mulai 1 Januari 2018. Meski demikian, perseroan belum menetapkan perusahaan migas mana yang akan menjadi mitranya.

“Salah satu strategi kami adalah partnership,” kata Direktur Utama Pertamina Elia Massa Manik di Jakarta.

Meski demikian, kerja sama dengan perusahaan migas lain ini tidak harus dimulai pada 1 Januari 2018. Pelepasan hak partisipasi perseroan ke pihak lain dapat dilakukan kapan saja. Pihaknya juga belum memastikan apakah Total E&P Indonesia dan Inpex Corporation akan kembali bergabung mengelola Blok Mahakam, atau justru ada perusahaan lain.

‘"Nanti kami lihat,” ujarnya. 

Sebelumnya, Total E&P Indonesie juga menyatakan ingin bergabung kembali di Blok Mahakam jika bisa memperoleh hak partisipasi 39%. Tidak hanya Total, Mubadala Petroleum yang merupakan perusahaan migas Uni Emirat Arab menyatakan minatnya untuk ikut mengelola Blok Mahakam. 

      Hal ini disampaikan pimpinan Mubadala kepada Wakil Menteri Energi dan Sumber Daya Mineral (ESDM) Arcandra Tahar pada November lalu.

Terkait surat dari Kementerian Energi dan Sumber Daya Mineral (ESDM) yang membuka kesempatan Total dan Inpex memperoleh hak partisipasi hingga 39%, Elia menyebut belum diterima pihaknya.

“Tidak ada suratnya ke kami,” kata dia.

Pada pekan lalu, Wakil Menteri ESDM Arcandra Tahar mengungkapkan sudah menandatangani surat yang mengizinkan Pertamina melepas hak partisipasi Blok Mahakam kepada pihak lain sampai 39%. Surat ini merevisi surat yang dikirim pada era Menteri ESDM Sudirman Said yang membatasi hak partisipasi yang boleh dilepas maksimal 30%.

“Kan sudah ada suratnya. Boleh up to 39% (bagian partisipasi yang dilepas) ,” kata Arcandra.

Sementara itu, Direktur Hulu Pertamina Syamsu Alam sempat menyatakan, Pertamina mampu menggarap Blok Mahakam dengan atau tanpa mitra. 

“Apakah kami mampu mengelola Mahakam? Mampu, karyawan tetap di sana, lalu kami ada beberapa finance yang mau bergabung. Jadi kami tunggu sampai akhir tahun,” tegas Alam.

Sebelumnya, seperti diketahui Pertamina telah menandatangani kontrak baru Blok Mahakam yang berlaku mulai 1 Januari 2018 pada akhir 2015 lalu. Dalam kontrak itu, perseroan menjanjikan bonus tanda tangan US$ 41 juta.

Investor Daily, Page-9, Thursday, Dec 28, 2017

Sign in Mahakam block, Total EP Must Pay Rp 49 Trillion

If not able to pay, Pertamina opens opportunities for other investors in Mahakam Block.

Although Total EP Indonesie is allowed to control 39% stake in the Mahakam Block, the French company should not be happy. Based on the calculation of Special Unit for Upstream Oil and Gas Business (SKK Migas), the asset value of Mahakam block as of December 31, 2017 will reach US $ 9.43 billion or equivalent to around Rp 127 trillion.

The value of the assets of the Mahakam Block is increased by more than 100% compared to the calculation in January 2016 by IHS and Petropro used by SKK Migas at that time. The valuation of Mahakam's assets was only US $ 3.45 billion or around Rp 47 trillion.

the Mahakam Block

Head of Programs and Communications Division of SKK Migas Wisnu Prabawa Taher said the calculation of estimated asset value of Mahakam Block as of December 31, 2017 based on capital assets, inventory, and inventory materials.

"The value is US $ 9.43 billion (Rp 127 trillion)," he said.

He said the calculation of US $ 9.43 billion was not using the asset calculation institution but using internal calculations SKK Migas by doing physical checks Mahakam block. From that calculation, there is indeed a significant increase compared with the previous calculation.

"The price of oil is certainly one of the things that cause its value to rise," said Vishnu.

As a result, with the benchmark, Total EP must spend the US $ 3.67 billion if it wants to get 39% stake in Mahakam Block. The value is around Rp 49.6 trillion (assuming an exchange rate of Rp 13,500 per US dollar), and is equivalent to a 100% valuation of the Mahakam Bloc by 2016.

Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar previously stated that the entry of potential investors Mahakam block can be done after Pertamina, through its subsidiary PT Pertamina Hulu Mahakam, fully controls the Mahakam Block starting January 1, 2018. That is, Total EP Indonesie entering current or while the contract is still in progress.

Total EP will discuss directly the amount of Valuation value that they must redeem to get 39% stake in Mahakam block with Pertamina. Unfortunately, President & General Manager and Group Representative for Indonesia Arividya Noviyanto did not answer the confirmation of their willingness and willingness to pay that much or even withdraw.

Syamsu Alam, Upstream Director of Pertamina, said that the company is focusing on the business to the business process (B to B) that Pertamina will undertake with potential partners in the Mahakam Block.

"The process remains primarily B to B and its aspect is not just the percentage," Alam said.

In fact, Syamsu Alam said, there are already some companies interested in joining Pertamina in the block beside Total EP.

"There are some companies that have expressed an interest to enter the Mahakam," he said.

Outside of Total EP and Inpex, there are also companies from the United Arab Emirates, Mubadala Petroleum, who have expressed an interest in partnering with Pertamina in the Mahakam Block.

President Director of Pertamina Elia Massa Manik said, in addition to focus on finding partners, it also concerns about production. Next year Pertamina targets production in the range of 1,100 million cubic feet per day (mmscfd) of gas and 48,000 barrels per day (bopd) of oil. 

    To achieve the target, Pertamina allocates investment next year to reach US35 700 million. This is added to the operating costs of US $ 1.1 billion.

Pertamina has also drilled two wells and 14 wells-15 wells by the end of 2017. Based on the estimates, the Mahakam Block is now leaving a reserve of 57 million barrels of oil, 45 million barrels of condensate, and 4.9 tcf of gas.

IN INDONESIA

Masuk ke blok Mahakam, Total EP Harus Bayar Rp 49 Triliun

Jika tidak sanggup membayar, Pertamina membuka peluang bagi investor Iain di Blok Mahakam.

Meskipun Total EP Indonesie diizinkan menguasai 39% saham di Blok Mahakam, perusahaan Prancis itu tidak boleh gembira dulu. Berdasarkan hasil perhitungan Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi (SKK Migas), nilai aset Blok Mahakam per 31 Desember 2017 akan mencapai US$ 9,43 miliar atau setara dengan sekitar Rp 127 triliun.

Nilai aset Blok Mahakam ini meningkat drastis lebih dari 100% dibandingkan perhitungan pada Januari 2016 oleh IHS dan Petropro yang dipakai SKK Migas saat itu. Valuasi aset Mahakam saat itu hanya sebesar US$ 3,45 miliar atau sekitar Rp 47 triliun.

Kepala Divisi Program dan Komunikasi SKK Migas Wisnu Prabawa Taher mengatakan, perhitungan estimasi nilai aset Blok Mahakam per 31 Desember 2017 berdasarkan harta benda modal, inventaris, dan material persediaan. 

"Nilainya sebesar US$ 9,43 miliar (Rp 127 triliun)," kata dia.

Dia mengatakan, perhitungan sebesar US$ 9,43 miliar itu tidak menggunakan lembaga perhitungan aset melainkan memakai perhitungan internal SKK Migas dengan melakukan cek fisik Blok Mahakam. Dari perhitungan itu memang ada kenaikan signifikan dibandingkan dengan perhitungan sebelumnya. 

"Harga minyak tentu saja salah satu hal yang menyebabkan nilainya naik," kata Wisnu.

Alhasil, dengan patokan itu, Total EP harus merogoh kocek US$ 3,67 miliar jika ingin mendapatkan 39% saham Blok Mahakam. Nilai itu sekitar Rp 49,6 triliun (dengan asumsi kurs Rp 13.500 per dollar AS), dan setara dengan valuasi 100% Blok Mahakam versi penilaian tahun 2016.

Wakil Menteri Energi dan Sumber Daya Mineral (ESDM) Arcandra Tahar sebelumnya menyatakan, masuknya calon investor Blok Mahakam bisa dilakukan setelah Pertamina, melalui anak usahanya PT Pertamina Hulu Mahakam, menguasai secara penuh Blok Mahakam mulai 1 Januari 2018. Artinya, Total EP Indonesie tidak harus masuk saat ini atau saat kontrak masih berlangsung.

Total EP akan membahas secara langsung besaran nilai Valuasi yang harus mereka tebus untuk mendapatkan 39% saham di Blok Mahakam dengan Pertamina. Sayang, President & General Manager dan Group Representative untuk Indonesia Arividya Noviyanto tidak menjawab konfirmasi ihwal kesanggupan dan kesediaan mereka membayar sebesar itu atau malah mundur.

Syamsu Alam, Direktur Hulu Pertamina menyatakan sedang berfokus pada proses business to business (B to B ) yang akan dilakukan Pertamina dengan calon partner di Blok Mahakam. 

"Prosesnya tetap diutamakan secara B to B dan aspeknya bukan hanya besaran persentasenya," kata Alam.

Bahkan, Syamsu Alam bilang, sudah ada beberapa perusahaan yang berminat bergabung dengan Pertamina di blok tersebut selain Total EP. 

"Ada beberapa perusahaan yang sudah menyampaikan minat untuk masuk ke Mahakam," katanya.

Di luar Total EP dan Inpex, ada juga perusahaan asal Uni Emirat Arab, Mubadala Petroleum, yang sudah menyampaikan minat bermitra dengan Pertamina di Blok Mahakam.

Direktur Utama Pertamina Elia Massa Manik menyatakan, selain fokus mencari mitra, pihaknya juga concern terhadap produksi. Tahun depan pertamina menargetkan produksi pada kisaran 1.100 juta kaki kubik per hari (mmscfd) gas dan 48.000 barel per hari (bopd) minyak. 

    Untuk mencapai target tersebut, Pertamina mengalokasikan investasi pada tahun depan mencapai US35 700 juta. lni masih ditambah dengan biaya operasi mencapai US$ 1,1 miliar.

Pertamina juga sudah melakukan pengeboran dua sumur dan 14 sumur-15 sumur sampai akhir tahun 2017 ini. Berdasarkan perkiraan, Blok Mahakam kini masih menyisakan cadangan 57 juta barel minyak, 45 juta barel kondensat, dan 4,9 tcf gas.

Kontan, Page-14, Thursday, Dec 28, 2017

Pertamina Ready to Manage Mahakam Block

Starting January 1, 2018, Mahakam Block in East Kalimantan, which has been managed by foreign companies for 50 years, will enter a significant milestone and historic. The Mahakam block will be fully operated by the lndonesian nation through PT Pertamina.

This management becomes an important milestone considering that Mahakam Block is the largest oil and gas producer in Indonesia today, by exceeding the production of contractors of foreign cooperation contracts of Chevron Pacific Indonesia and Exxon Mobil Oil Indonesia.

the Mahakam Block

From Mahakam Block, Pertamina is expected to contribute approximately 34 percent of total national oil and gas production. President Director of Pertamina Hulu Indonesia, Bambang Manumayoso explained Pertamina has made various preparations and strategies.

This step is to maintain the oil and gas production of the Mahakam Block by ensuring the continuity of drilling and well intervention activities during the transition from Total E & P Indonesie to Pertamina on January 1, 2018.

The preparation and strategy are also carried out by continuously prioritizing the QHSSE (quality, health, safety, security, and environment) aspects, safeguarding and enhancing production for national energy security, developing existing human resources, and enhancing the use of technological innovations that all lead to the strengthening of business sectors upstream.

Some preparations that have been done by Pertamina include the transfer of Total E & P Indonesia workers, who have signed a working agreement with Pertamina, reached 98.23 percent.

"Then drilling 14 well units from 15 wells program in 2017 with the achievement of good HSSE," said Bambang.

Pertamina also succeeded in reducing the cost of well drilling to 23 percent more efficiently to the planned budget. Draw faster drilling times by up to 25 percent and gain up to 120 percent reserve mining potential. Then get additional reservoir thickness of 115 percent.

IN INDONESIA

Pertamina Siap Kelola Blok Mahakam

Mulai 1 Januari 2018, Blok Mahakam di Kalimantan Timur yang telah dikelola perusahaan asing selama 50 tahun, akan memasuki tonggak penting dan bersejarah. Blok Mahakam akan dioperasikan secara penuh oleh bangsa lndonesia melalui PT Pertamina.

Pengelolaan ini menjadi tonggak penting mengingat Blok Mahakam adalah produsen migas terbesar di Indonesia saat ini, dengan melampaui produksi kontraktor kontrak kerja sama asing Chevron Pacific Indonesia dan Exxon Mobil Oil Indonesia.

Dari Blok Mahakam, Pertamina diperkirakan akan memberikan tambahan kontribusi sekitar 34 persen dari total produksi migas secara nasional. Direktur Utama Pertamina Hulu Indonesia, Bambang Manumayoso menjelaskan Pertamina telah melakukan berbagai persiapan dan strategi. 

Langkah ini untuk tetap menjaga produksi migas Blok Mahakam dengan memastikan keberlangsungan kegiatan pengeboran dan well intervention pada saat peralihan dari Total E&P Indonesie ke Pertamina pada 1 Januari 2018.

Persiapan dan strategi tersebut juga dilakukan dengan senantiasa mengedepankan aspek QHSSE (quality, health, safety, security, and environment), menjaga dan meningkatkan produksi untuk ketahanan energi nasional, mengembangkan SDM yang ada, dan meningkatkan pemanfaatan inovasi teknologi yang semuanya bermuara pada penguatan bisnis sektor hulu.

Beberapa persiapan yang sudah dilakukan Pertamina antara lain transfer pekerja Total E&P Indonesia, yang sudah mendandatangani perjanjian kerja dengan Pertamina, mencapai 98,23 persen. 

"Lalu telah melakukan pengeboran 14 unit sumur dari program 15 sumur pada 2017 dengan pencapaian HSSE yang baik," ujar Bambang.

Pertamina juga berhasil menekan biaya pengeboran sumur hingga lebih efisien 23 persen terhadap anggaran yang direncanakan. Mencatat waktu pengeboran lebih cepat hingga 25 persen dan mendapatkan potensi penambangan cadangan hingga 120 persen. Lalu memperoleh penambahan ketebalan reservoir sebesar 115 persen.

Harian Bangsa, Page-4, Thursday, Dec 28, 2017

Project Not Immediately Groundbreaking

This year, when the price of crude oil rose, none of the oil refinery projects in the country reached the stage of physical construction. In fact, oil refineries enter national strategic projects.

Based on data from the Commission for the Acceleration of Priority Infrastructure Provision (KPPIP), there are six refineries projects, namely Bontang refinery in East Kalimantan (Rp 197.58 billion investment) and Tuban refinery (Rp 199.30 billion). Each has a capacity of 300,000 barrels per day (bpd).

The rest is a capacity-adding project, namely Balikpapan Refinery, Cilacap Refinery, Balongan Refinery, and Dumai Refinery, with a total investment of Rp 246.22 billion.

Initial plan, Pertamina is targeting three refinery projects to the groundbreaking phase or marking the commencement of physical construction in 2017. In the first quarter, the project will increase the capacity of Balikpapan refinery.

In the third quarter, it was the turn of the Cilacap Refinery project that partnered with Saudi Aramco (Saudi Arabia). Finally, in the fourth quarter of Tuban refinery entered the physical construction phase.

Pertamina Director of Pertamina Processing and Petrochemical Processing, Ardhy N. Mokobombang, said that the Balikpapan refinery is inaugurated by President on December 29. However, groundbreaking is expected in January 2018.

"Tentative week 2 or 3," he said.

In November 2017, the Balikpapan Refinery has completed the front end engineering design (FEED) to raise the standard fuel oil product (EBM) from Euro II to Euro V Then, followed by early work.

In 2018, the project is scheduled to enter into an engineering procurement construction (EPC) tender package. The target is, by 2021, the Upgrading project of the 1st phase of the Balikpapan Refinery is completed and 2025 for the 2nd stage completion. Thus, the production capacity increases from 260,000 bpd to 360,000 bpd by the Euro V standard.

For the Cilacap refinery, Pertamina has completed the bankable feasibility study (BFS), land addition and amendment joint-venture development agreement (JVDA) agreement in 2017.

The plan, the amendment was signed at the beginning of 2018 so that FEED work can start without having to wait for the JV to be built first.

In 2018 it will also transfer existing assets to Pertamina-Saudi Aramco joint venture company, proposing fiscal incentives and FEED work. The target is, in 2023 the Cilacap refinery starts to operate with a capacity of 400,000 bpd from the current capacity of 348,000 bpd.

For Tuban refinery, the company has completed the formation of a joint venture company Pertamina-Rosneft (Russia).

In 2018 the target is land procurement and the start of FEED work. By 2024 the new 300,000 bph refinery starts to operate. In June 2017, President Joko Widodo expressed his disappointment with the construction of an oil refinery.

"If the refinery does not start soon, I just go inside. Not only through the minister, but directly through the Pertamina president director. "

In February 2016 President Jokowi once said the importance of starting the refinery building process. According to him,

Indonesia has long not increased the capacity of refineries even new refineries. On the other hand, EBM consumption continues to rise each year as domestic oil production capability continues to fall.

Therefore, the development process should start because it needs about 4-5 years until the development project and the addition of refinery capacity is completed.

"This year 2016 must all be decided, because the plant is not built for a while. It takes 4-5 years. "

In fact, the plan to build a number of refineries should be revised backwards. The President's disappointment and his status as a national priority project have not been able to accelerate the entire oil refinery development plan in the country.

IN INDONESIA

Proyek Tidak Segera Groundbreaking

Tahun ini, ketika harga minyak mentah naik, tidak ada satu pun proyek kilang minyak di Tanah Air yang sampai ke tahap konstruksi fisik. Padahal, kilang minyak masuk proyek strategis nasional. 

Berdasarkan data Komisi Percepatan Penyediaan Infrastruktur Prioritas (KPPIP), ada enam proyek kilang dimaksud, yakni Kilang Bontang di Kalimantan Timur (investasi Rp 197,58 miliar)dan Kilang Tuban (Rp 199,30 miliar). Masing-masing berkapasitas 300.000 barel per hari (bph).

Sisanya adalah proyek penambahan kapasitas yakni Kilang Balikpapan, Kilang Cilacap, Kilang Balongan, dan Kilang Dumai, dengan total investasi Rp 246,22 miliar.

Rencana awal, Pertamina menargetkan tiga proyek kilang ke tahap groundbreaking atau penandaan dimulainya konstruksi fisik pada 2017. Pada kuartal 1, proyek penambahan kapasitas Kilang Balikpapan. 

Pada kuartal III, giliran proyek penambahan kapasitas Kilang Cilacap yang bermitra dengan Saudi Aramco (Arab Saudi). Terakhir, pada kuartal IV Kilang Tuban memasuki tahap konstruksi fisik.

Direktur Megaproyek Pengolahan dan Petrokimia Pertamina, Ardhy N. Mokobombang mengatakan rencananya Kilang Balikpapan diresmikan konstruksi fisiknya oleh Presiden pada 29 Desember. Namun, groundbreaking diperkirakan pada Januari 2018. 

“Tentative week 2 atau 3,” ujarnya.

Pada November 2017, Kilang Balikpapan telah menyelesaikan tahapan pendefinisian proyek (front end engineering design/ FEED) untuk menaikkan standar produk bahan bakar minyak (EBM) dari Euro II ke Euro V Kemudian, dilanjutkan dengan pengerjaan tahap awal (early work).

Pada 2018, dijadwalkan proyek memasuki tender paket pengerjaan rekayasa, pengadaan dan konstruksi (engineering procurement Construction/EPC). Targetnya, pada 2021, proyek upgrading tahap 1 Kilang Balikpapan selesai dan 2025 untuk penyelesaian tahap 2. Jadi, kapasitas produksi naik dari 260.000 bph menjadi 360.000 bph dengan standar Euro V.

Untuk Kilang Cilacap, Pertamina telah menyelesaikan bankable feasibility study (BFS), penambahan lahan dan mengamandemen kesepakatan perusahaan patungan (joint-venture development agreement/JVDA) pada 2017. 

      Rencananya, amendemen tersebut diteken pada awal 2018 agar pengerjaan FEED bisa dimulai tanpa harus menanti pembentukan JV terlebih dulu.

Pada 2018 juga akan dilakukan transfer aset eksisting ke perusahaan patungan Pertamina-Saudi Aramco, pengusulan insentif fiskal dan pengerjaan FEED. Targetnya, pada 2023 Kilang Cilacap mulai beroperasi dengan kapasitas 400.000 bph dari kapasitas saat ini 348.000 bph.

Untuk Kilang Tuban, perseroan telah menyelesaikan pembentukan perusahaan patungan Pertamina-Rosneft (Rusia). 

      Pada 2018 targetnya dilakukan pengadaan lahan dan dimulainya pengerjaan FEED. Pada 2024 kilang baru berkapasitas 300.000 bph itu mulai beroperasi. Pada Juni 2017, Presiden Joko Widodo mengungkapkan kekecewaannya terhadap pembangunan kilang minyak. 

“Kalau kilang tidak segera dimulai, saya langsung masuk ke dalam. Tidak saja melalui menteri, tetapi langsung melalui direktur utama Pertamina."

Pada Februari 2016 pun Presiden Jokowi pernah mengatakan pentingnya memulai proses pembangunan kilang. Menurutnya, sudah lama Indonesia tidak menambah kapasitas kilang bahkan kilang baru. Di sisi lain, konsumsi EBM terus naik tiap tahunnya ketika kemampuan produksi minyak dalam negeri terus turun.

Oleh karena itu, proses pembangunan harus dimulai karena perlu sekitar 4-5 tahun hingga proyek pembangunan dan penambahan kapasitas kilang rampung.

“Tahun ini 2016 semua harus diputuskan, karena bangun kilang tidak sebentar. Butuh 4-5 tahun."

Kenyataannya, rencana pembangunan sejumlah kilang harus direvisi mundur. Ungkapan kekecewaan Presiden dan statusnya sebagai proyek prioritas nasional belum bisa mempercepat seluruh rencana pembangunan kilang minyak di Tanah Air.

Bisnis Indonesia, Page-22, Thursday, Dec 28, 2017

Ministry simplifies energy licenses

The government has simplified the procedure of obtaining licenses throughout 2017 in the energy and mining sectors, which include oil and natural gas, mineral and coal, electrification, as well as new and renewable energy.

According to an Energy and Mineral Resources Ministry press release obtained by Thejakortd Post, the ministry has teamed up with the Upstream Oil and Gas Regulatory Special Task Force (SKK-Migas), the Finance Ministry’s directorate general for customs and excise and the portal manager of Indonesia National Single Window (PP INSW) in a bid to boost the productivity of upstream oil and gas activities.

Through the cooperation, the parties developed an information integrated system that related to the provision of fiscal policy on imported operating goods for the downstream activity needs of upstream oil and gas contractors.

The government has also launched two online applications electronic Non-Tax Revenues (e-PNBP) and a production monitoring app. The apps allow for a shorter processing time of 40 days to only 10 to 15 days.

The Energy and Mineral Resources Ministry now has 15 licenses - six from the oil and gas sector, six in the mining sector and three in the new and renewable energy sector - for companies to obtain.

The number of licenses has been drastically cut down as 63 of them have been delegates to the one-door integrated services (PTSP) at the Investment Coordinating Board (BKPM).

The Jakarta Post, Page-14, Wednesday, Dec 27, 2017

2018, Pertamina Adds Assets in Algeria

PT Pertamina is likely to increase oil and gas assets in Algeria with an estimated production of around 20-30 thousand barrels per day (bpd). Negotiations with Sonatrach are targeted to be completed early next year.

This potential opportunity for oil and gas is possible because the company has signed a memorandum of understanding on the management of oil and gas blocks in Algeria with Sonatrach.

Through this new agreement, the Algerian state-owned oil and gas company opens opportunities for Pertamina to develop existing assets and work on new assets with a production potential of 20-30 thousand bpd and total reserves of more than 100 million barrels of oil.

Upstream Director of Pertamina Syamsu Alam said that there are several fields that will be a priority for the development of cooperation in the upstream sector. Currently, his side is still in the process of discussing the technical and commercial side of these assets with Sonatrach. Thus, it can not mention the name of the oil and gas block. The discussion with Sonatrach is targeted for completion next year.

"To be sure this is one of Pertamina's efforts to strengthen Indonesia's energy security. Hopefully early next year (finished discussion), "he said

Following this signing, Pertamina and Sonatrach will finalize the agreement and settlement commercial terms. Furthermore, the company will submit a plan of development (POD) to the oil and gas authority in Algeria.

Pertamina currently has three fields in Algeria through its subsidiary, PT Pertamina International EP (PIEP). PIEP is the operator and the majority management holder of 65% in MLN Field. Not only that, PIEP also has management rights in EMK field of 16.9% and in Ourhoud field 3.73%.

Not only in the upstream, Pertamina President Director Elia Massa Manik stated that the MoU also opens opportunities for downstream cooperation, including working on the potential of liquefied natural gas (LNG) and liquefied petroleum gas (LPG).

Because the memorandum of understanding is proof that the company is considered serious work on the field abroad, especially three fields in Algeria.

"This effort also shows Pertamina's seriousness in expanding upstream business operations overseas to increase national oil and gas reserves and production," he said.

The same thing was also conveyed by Sonatrach CEO Abdelmoumen Ould Kaddourl. He said that his side would like to continue cooperation with Pertamina to strengthen the good relationship that has been established so far. Pertamina judged as a capable company and comes from a country similar to Algeria.

"Anytime Pertamina to Algeria here always rains. Please bring more rain to Algeria, "said Abdelmounien Ould Kaddour.

Previously, President Director of PIEP Slamet Riadhy revealed that oil and gas production from Algeria's assets is targeted to increase to 200 thousand barrels of oil equivalent per day / boepd in 2018-2019. Therefore, the company needs to increase production by 140-150 thousand boepd from new assets. Apart from the acquisition, it will also boost oil and gas production from Block 405A.

Pertamina wants to strengthen its position in Algeria. It sees that Indonesia and Algeria are very suitable in terms of their energy condition. Algeria has produced oil up to 1.8 million bpd, though it was steady at 1.2 mln bpd. However, the rate of oil consumption is less than half its production. While Indonesia lacks oil supplies to support its 250 million people.

IN INDONESIA

2018, Pertamina Tambah Aset di Aljazair

PT Pertamina berpeluang menambah aset migas di Aljazair dengan perkiraan produksi sekitar 20-30 ribu barel per hari (bph). Negosiasi dengan Sonatrach ditargetkan selesai awal tahun depan.

Peluang tambahan potensi migas ini dimungkinkan karena perseroan telah menandatangani revisi nota kesepahaman pengelolaan blok migas di Aljazair dengan Sonatrach. 

Melalui kesepakatan baru ini, perusahaan migas milik pemerintah Aljazair itu membuka peluang bagi Pertamina untuk mengembangkan aset eksisting serta menggarap aset baru yang memiliki potensi produksi 20-30 ribu bph dan total cadangan lebih dari 100 juta barel minyak.

Direktur Hulu Pertamina Syamsu Alam mengatakan, ada beberapa lapangan yang akan menjadi prioritas untuk pengembangan kerja sama di sektor hulu. Saat ini, pihaknya masih dalam tahap pembahasan sisi teknikal maupun komersial dari aset-aset tersebut dengan Sonatrach. Sehingga, pihaknya belum dapat menyebutkan nama blok migas tersebut. Pembahasan dengan Sonatrach itu ditargetkan selesai tahun depan. 

“Yang pasti ini adalah salah satu upaya Pertamina untuk memperkuat ketahanan energi Indonesia. Semoga awal tahun depan (selesai pembahasan) ,” kata dia

Pasca penandatanganan ini, Pertamina dan Sonatrach akan memfinalisasi kesepakatan dan melakukan settlement commercial terms. Selanjutnya, perseroan akan mengajukan rencana pengembangan (plan of development/POD) kepada otoritas migas di Aljazair.

Saat ini Pertamina memiliki tiga lapangan di Aljazair melalui anak usahanya, PT Pertamina International EP (PIEP). PIEP menjadi operator sekaligus pemegang hak kelola mayoritas sebesar 65% di Lapangan MLN. Tidak hanya itu, PIEP juga memiliki hak kelola di lapangan EMK sebesar 16,9% dan di lapangan Ourhoud 3,73%.

Tidak hanya di hulu, Direktur Utama Pertamina Elia Massa Manik menyatakan, nota kesepahaman ini juga membuka peluang bagi kerja sama di hilir, termasuk menggarap potensi gas alam cair (liquefied natural gas/ LNG) serta gas minyak cair (liquefied petroleum gas/LPG).

Pasalnya, nota kesepahaman ini rnerupakan bukti bahwa perseroan dinilai serius menggarap lapangan di luar negeri, utamanya tiga lapangan di Aljazair.

“Upaya ini sekaligus menunjukkan keseriusan Pertamina dalam memperluas operasi bisnis hulu di luar negeri untuk menambah cadangan dan produksi migas nasional,” kata dia.

Hal senada juga disampaikan oleh CEO Sonatrach Abdelmoumen Ould Kaddourl. Dikatakannya, pihaknya ingin terus melanjutkan kerja sama dengan Pertamina untuk memperkuat hubungan baik yang telah terjalin selama ini. Pertamina dinilainya sebagai perusahaan yang mumpuni dan berasal dari negara yang mirip dengan Algeria.

“Kapan saja Pertamina ke Algeria di sini selalu hujan. Please bring more rain to Algeria," ujar Abdelmounien Ould Kaddour.

Sebelumnya, Presiden Direktur PIEP Slamet Riadhy mengungkapkan, produksi migas dari aset di Aljazair ditargetkan bisa meningkat menjadi 200 ribu barel setara minyak per hari (barrel oil equivalent per day/ boepd) pada 2018-2019. Untuk itu, perseroan perlu menambah produksi sebesar 140-150 ribu boepd dari aset baru. Selain dari akuisisi, pihaknya juga akan menggenjot produksi migas dari Blok 405A.

Pertamina ingin memperkuat posisinya di Aljazair. Pihaknya melihat Indonesia dan Aljazair sangat cocok terkait kondisi energinya. Aljazair pernah memproduksi minyak sampai 1,8 juta bph, meski kemudian stabil di kisaran 1,2 juta bph. Namun, angka konsumsi minyaknya tidak sampai setengah produksinya. Sementara Indonesia kekurangan pasokan minyak untuk mendukung 250 juta rakyatnya.

“Jadi sebetulnya sinergi dengan Sonatrach itu luar biasa,” kata Slamet.

    Pertamina menyatakan akan mengandalkan produksi migas dari aset-asetnya di luar negeri di masa mendatang, dengan target kontribusi mencapai 33% dari total produksi 2025 atau setara dengan 650 ribu boepd. Akuisisi di luar negeri diperlukan untuk memperkecil selisih kebutuhan dan pasokan migas domestik di masa mendatang.

    Pada 2025, produksi minyak Pertamina ditargetkan bisa mencapai 822 ribu bph, yakni 353 ribu bph dari dalam negeri dan 469 ribu bph dari luar negeri. Sementara untuk gas, ditargetkan meningkat menjadi 5,71 miliar kaki kubik per hari, yaitu 4,23 miliar kaki kubik dari domestik dan 1,48 miliar kaki kubik dari aset luar negeri.

Investor Daily, Page-9, Wednesday, Dec 27, 2017