Energy Investment Requires Regulatory Certainty

Bad news comes from the Indonesian energy sector. During the Corona pandemic (Covid-19), two foreign investors in the oil, gas, and electricity sectors, Shell and Mitsui, planned to flee their project in Indonesia. 

    Royal Dutch Shell Plc (Shell) intends to leave the Masela Block Abadi Gas Project, Maluku. SKK Migas confirmed, Shell wanted to release 35% of its participation in the block, influenced by Covid-19.

the Masela Block Abadi Gas  Maluku Indonesia

Besides Shell, another foreign investor who wants to escape is Japan's, Mitsui Corp. Mitsui plans to leave the Paiton power plant project, East Java. Mitsui holds a 45.5% stake in the 2,045 megawatts (MW) plant.

The energy business is indeed experiencing a decline. See, the International Energy Agency (IEA) projects total global energy investment this year to fall to US $ 400 billion, down 20% year-on-year (YoY). Earlier this year, energy investment had grown by 2%.

Indonesia was affected. Economist Indef Bhima Yudhistira Adhinegara rate, the reason investors want to get out of Indonesia Iantaran see regulations that are not yet fully friendly and often change.

"They have invested long-term, but there is uncertainty regarding policies and regulations," he said.

Indonesia's competitiveness index in the IMD World Competitiveness Ranking 2020 dropped from rank 32 to 40. Therefore, Bhima said, there needs to be an improvement in the investment climate in the country. 

    The Masela Block project is indeed on a winding road. The process of negotiating, developing, and determining the investment commitment of the Masela Block has been very difficult, namely for more than two decades since 1998.

Inpex Corporation

In July last year, the government approved the proposal of Inpex Corporation, the manager of which holds a 65% stake in the Masela Block's participation. The block's investment value is around the US $ 19.8 billion.

Until now there are no prospective buyers of liquefied natural gas (LNG) that will later be produced from the Masela Block. On the other hand, the development of onshore refineries has not yet begun.

Indonesian Petroleum Asociation (IPA) Executive Director Marjolijn Wajong assessed that depressed oil prices also contributed to the decline in investment. Then the most likely thing to do is respect the contracts that have been made with the investors.

"If you want to change the contract, the government should discuss it first with investors," he said.

Oil and Gas Practitioners and Observers Tumbur Parlindungan hopes that the government will move quickly to improve the country's oil and gas investment climate so that investors will not be shunned after the Covid-19 pandemic.

"The way to provide investment certainty is through safeguarding the sanctity of contracts or contract sanctity as well as improving overlapping rules," he said.

    In the electricity sector, the Executive Director of the Institute for Essential Services Reform (IESR) Fabby Tumiwa believes that Mitsui's plan to leave the Paiton power plant signals that investment in fossil fuel-based plants is no longer attractive.

Mitsui's intention to leave could set a precedent in the electricity sector. Later, other investors will prepare similar options to mitigate investment risks in thermal plants. Therefore, Fabby called on the all-out government to encourage investment in clean energy and energy efficiency.

"The government must have a policy framework that provides certainty," he said.

Kontan, Page-1, Tuesday, July 7, 2020

Shell is fleeing from the Masela Block

Head of SKK Migas Admits Poor Oil and Gas Condition.

Royal Dutch Shell Plc. (Shell) left the Masela Block Abadi Gas Project. Where currently Inpex Corporation (Inpex) as the largest Shell holder of the block is looking for a replacement for Shell.

"That's right (flee). Inpex is looking for a replacement," explained SKK Migas Deputy of Operations Julius Wiratno.

the Masela Block

Julius explained that the reason for Shell's flee from the Masela Block was because of the cash flow conditions affected by the co-19 pandemic situation. Shell decided to focus on other projects that were taking place in Indonesia. 

sHell

    Just so you know, Shell has a participation stake in the Masela Block of 35 percent and 65 percent by Inpex Corporation. Other than that. The Regional Government also confirmed that they would receive a 10 percent share of participating shares.

"In some other projects in other countries, it is not going well or not going well so that the company's cash flow is not good. They focus first on several projects that have already taken place," explained Julius.

He continued, currently, both Inpex Corporation and Shell are continuing discussions on options for taking full participation rights by Inpex. In addition, the option to search for new partners by Inpex also appears. Previous. 

      

Dwi Soetjipto

    The Head of SKK Migas, Dwi Soetjipto, mentioned that the condition of the LNG business that is currently in decline has indeed made some oil and gas companies worry about the project implementation. Including for the Masela Block.

"Currently the oil and gas industry is facing serious problems (including) LNG prices. "There is a fear of project owners like Masela project execution going forward," he said a few days ago.

Julius explained, it is not impossible that the project implementation time will increase. But he ensured, Inpex was committed to completing the project on time. The Masela Block is targeted to be streamlined in 2027.

The long road

The news about Shell's flee from the project, whose investment value reached 20 billion US dollars, is not new. Previously, in mid-May 2019 ago. Nevertheless, both parties continue to work together on the Masela Project. On the other hand, the Masela Project is also being faced with a number of works such as land acquisition and product buyer search.

The journey of the Masela Block liquefied natural gas (LNG) jumbo refinery project in the Tanimbar Islands in Maluku Province is still long. The Masela Block is targeted to produce 421 million cubic feet per day (mmscfd) of gas and 8,400 barrels of oil per day. 

    In addition to being constrained by land issues, Inpex Corporation and Shell Indonesia as the operator have not yet succeeded in finding potential buyers of the liquefied natural gas product. Just so you know, previously Inpex Masela Ltd had entered into an MoU of buying and selling gas from the Abadi LNG Project.

PT Perusahaan Listrik Negara (Persero)

The Masela gas production was purchased by PT Perusahaan Listrik Negara (Persero) and PT Pupuk Indonesia (Persero) in February. 

PT Pupuk Indonesia (Persero)

    The memorandum of understanding was intended to start discussions on sales and purchases to supply LNG gas to gas power plants operated by PLN and natural gas at 150 million standard cubic feet per day (mmscfd) for the co-production refinery to be built by PT Pupuk Indonesia. SKK Migas targets that the buyer search process is expected to be completed in 2021.

Surya, Page-7, Monday, July 6, 2020

THE MORE WEIGHT THE MASELA PROJECT

The Abadi Field development project, the Masela Block, located in the Arafuru Sea, Maluku is considered to be getting heavier. In addition to the uncertainty of buyers from the oil and gas block, liquid gas / LNG market conditions are also still difficult to predict.

the Masela Block

Currently, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is reviewing the continuation of the Masela Block development project.

Dwi Soetjipto

SKK Migas Head Dwi Soetjipto said that the price of LNG which fell in the range of US $ 2 per MMBtu greatly affected the economics of the Masela Block project. According to him, the low price of LNG was influenced by the Covid-19 pandemic which hit almost all countries in the world, thus making demand is reduced.

"This is the fear of the project owner as in the Masela Block, project execution going forward," he said.

Dwi revealed, not a few Cooperation Contract contractors (KKKS) submitted a revised work plan this year, because they had to face a very difficult time.

SKK Migas Deputy for Operations Julius Wiratno added by looking at the current conditions, it was possible that the Masela project would be delayed. Julius had revealed that Shell Upstream Overseas Ltd. (Shell) decided to go out and the project, because of cash flow problems due to projects in other countries are stunted.

Inpex Corporation

"Inpex did not step down, which Shell resigned as a partner. All Inpex will be taken over or currently looking for potential partners, "he said.

However, later the statement was corrected.

"Until today Shell hasn't left yet, it's still a B to B discussion, negotiation. The project must continue even if it is limping, "he said.

When it was confirmed by Bisnis Indonesia, both Shell and Inpex management was reluctant to comment on the news of Shell's withdrawal in the project. Meanwhile, Shell originally held 35% of the share of participation in the project. The rest is held by Inpex and regionally-owned enterprises (BUMD) by 10%.

The Trisakti University Teaching Staff Pri Agung Rakhmanto assessed that if it was true that Shell resigned as a strategic partner in the project, the development of the Masela Block project would certainly not be easy. According to him, partner factors in the development of the Masela Block project added complexity to existing problems, such as certainty of gas buyers and Masela's production output. 

On the other hand, he said, the condition of the global LNG market in the next 5 years is projected to also be in an oversupply condition with low prices. So the cost and economic development of the Masela Block will not necessarily be competitive to develop existing fields, "he said.

Inpex Corporation and Shell Upstream Overseas Ltd.

Based on the records, Inpex Corporation and Shell Upstream Overseas Ltd. (Shell) previously signed a cost recovery profit-sharing amendment contract, including an additional 7 years of allocation and extension of the Abadi LNG project with SKK Migas on October 11, 2019.

Bisnis Indonesia, Page-4, Monday, July 6, 2020

Shell Flee the Masela Block Project

SKK Migas: The reason Shell withdrew from the Masela Block due to the financial condition exposed to the corona

The coronavirus pandemic effect (Covid-19) hit many industrial and business sectors globally, also in the country. As a result of the outbreak, Royal Dutch Shell Plc (Shell) decided to leave the Masela Block Abadi Gas Project, Maluku Province. Currently, lnpex Corporation (lnpex) as the largest shareholder in the block is looking for a replacement for Shell.

lnpex Corporation (lnpex)

"Yes, that's right (Shell is retiring). Inpex is looking for a replacement," said Deputy of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno.

the Masela Block

According to him, the reason for Shell's withdrawal from the Masela Block development project was because of the cash flow conditions that were affected by the Covid-19 pandemic situation. Shell decided to focus on other projects that were taking place in Indonesia. 

Royal Dutch Shell Plc (Shell)

    In the Masela Block, Shell has a 35% stake, while Inpex Corporation 65%. Later, the local government will receive a 10% share of participation taken from the ownership of Shell and lnpex.

"In a number of projects in other countries, it is also lacking or not going well so that the company's cash flow is not good. They (Shell) focus first on a number of projects that have already taken place," said Julius.

Now, both lnpex Corporation and Shell are continuing discussions on the option to take over the full participation by lnpex. In addition, the option to search for new partners also appears by lnpex. 

Rhea Sianipar

    Shell Indonesia management does not want to comment on the development of the Masela Block Abadi Gas Project. Regarding the question above, I have no comment, "said Shell Indonesia's External Relations VP Rhea Sianipar.

Dwi Soetjipto

Previously, SKK Migas Head Dwi Soetjipto mentioned the condition of the liquefied natural gas (LNG) business which was currently in decline, causing several oil and gas companies to worry about the project implementation, including for the Masela Block.

"Currently the oil and gas industry is facing serious problems including LNG prices. There is the fear of project owners such as the Masela Block to execute projects going forward," Dwi Soetjipto said.

The schedule can be Delayed

Julius added that it was not impossible that the time to implement the Masela Block Abadi Gas Project would increase or reverse the original schedule. However, SKK Migas ensures that lnpex is committed to completing projects on time. The Masela Block is targeted to be streamlined in 2027.

On October 11, 2019, Inpex Corporation and Shell Upstream Overseas Ltd together with SKK Migas signed a cost recovery revenue-amendment contract including an additional seven years of allocation and extension of the Abadi liquefied natural gas refinery project with SKK Migas.

The signing marked the implementation of a formal agreement on the terms of the cooperation contract that was previously agreed upon and announced in July 2019. Previously, PT Pertamina (Persero) had expressed interest in participating in the project. Pertamina once sent an official letter to conduct strategic talks on the management of the gas field in 2011 and 2016.

Drama in the Masela Block

Shell Flee from the Masela Block

A series of dramas colored the process of developing the Masela Block. After Shell intends to flee, the manager of Masela, Interp Corporation, must work to secure the project. As a flashback, in the middle of 2019, the Indonesian government and Inpex Corporation had agreed on the Masela Block development plan.

At that time the Minister of Energy and Mineral Resources (ESDM) Ignasius Jonan had to go back and forth from Jakarta-Tokyo to conduct very difficult negotiations. On Tuesday 16 July 2019, finally the Masela Block POD revised document was signed by SKK Migas Chief Dwi Soetjipto and CEO of Corporation Corp Takayuki Ueda at the Merdeka Palace, witnessed by President Joko Widodo and ESDM Minister Ignasius Jonan.

The agreement with an investment value of around US $ 18.5 billion to the US $ 19.8 billion is the culmination of the back and forth negotiations over the development of the Masela project over the past 20 years. Development of the Abadi Gas Field, the Masela Work Area uses an onshore LNG scheme, with lnpex as the operator.

The Abadi LNG Plant is designed to have a capacity of 10.5 million tons of natural gas per year, including around 9.5 million tons of LNG per year, 150 mmscfd of local gas supply through land pipes, and approximately 35,000 barrels of condensate per day.

Kontan, Page-12, Monday, July 6, 2020

Completing the Pertamina Refinery Project Requires Investors

Refinery investment reaches the US $ 40 billion

PT Pertamina (Persero) needs partners in funding all fuel refinery projects targeted for completion in 2026-2027. This is because the company's finances are unable to finance the investment needs of the refinery project, which is estimated at the US $ 48 billion.

Director of PT Pertamina International Refinery Ignatius Tallulembang said, as the Processing and Petrochemical Subholding of Pertamina, it was targeting to become the best processing and petrochemical company in the Southeast Asia region. 

    This was achieved by increasing Pertamina's refinery capacity to 1.8 million barrels per day (BPD) or the largest in the region. Investment needs to increase the capacity of the refinery from the current 1 million BPD to 1.8 million BPD, he said, reached the US $ 48-50 billion.

"If you use Pertamina's own funds, of course, you can't. So in building a refinery, Pertamina really needs a partner. Because in addition to funding shares, risk-sharing can be shared, "he said.

Tallulembang explained, in the partnership the company will also continue to issue cash. However, financing refinery projects will also be borne by partners. Pertamina opened two partnership schemes, namely strategic partners (strategic investors) and financial (financial investors).

"The point is that this strategic investor is a well-known oil and gas company and has built refineries. Usually, they are involved from the start, they will bring technology and expertise. They also usually have special requirements, for example offering crude oil or joint marketing, "he explained.

Furthermore, financial partners are usually only involved in funding. According to Tallulembang, the financial partners did not intervene too much on the project and gave Pertamina the flexibility to run its business.

"The important thing is the profit we will share [with financial partners] when dividend distribution," he said.

Rosneft Oil Company Russia

So far, Pertamina has partnered with Rosneft Oil Company as a strategic partner in the Tuban Refinery Project in East Java Province. Then, Pertamina has partnered with K-Sure and Exim Bank of South Korea as financial partners and is exploring similar cooperation with Mubadala Investment Company.

But the company is also still looking for partners to complete the Bontang Refinery Project in East Kalimantan Province and Cilacap Refinery in Central Java Province. 

    Pertamina was assigned by the government to work on the Balongan Refinery Project in West Java Province, Balikpapan Refinery in East Kalimantan, Bontang Refinery also in East Kalimantan, Cilacap Refinery in Central Java, and Tuban Refinery in East Java.

Mubadala Investment Company.

After the entire refinery project is completed in 2026-2027, in addition to the processing capacity increasing to 1.8 million BPD, the refinery will also produce 1.5 million BPD of fuel and 8,600-kilo tons of petrochemical products per annum.

Private Role

Not only the partnership scheme, Tallulembang added that the development of national refineries can also be done by involving the private sector or through the Cooperation between the Government and Business Entity (KPBU). This scheme has been regulated in a law, where private business entities can work together to build refineries with Pertamina as the person in charge.

"Unfortunately this scheme has not yet been used even though it is very possible, and Pertamina can take products from refineries built. The government as an off-taker when domestic energy demand is still high is still needed, "he said.

The Director of Oil and Gas Engineering and Environment of the Ministry of Energy and Mineral Resources (ESDM) Soerjaningsih revealed, since 2001, many national private companies have obtained permits to build fuel refineries. However, the huge investment costs, high technology, land issues, crude oil supply, and product off-takers are constraints so that not even one refinery has been realized.

In the assignment of refinery construction to Pertamina, the government opened up opportunities for cooperation for domestic and foreign companies.

"So Pertamina can partner with private entities, domestic and foreign, it is possible for that. We also provide many facilities, both for the assignment scheme and the PPP, "said Soerjaningsih.

Funding facilities include state capital participation (PMN), retained earnings, government loans, bond issuance, and loans with government guarantees. While the fiscal incentives include a 100% Tax Holiday, taxes in the framework of imports, as well as income tax facilities.

Chairman of the Association of Oil and Gas Companies (Aspermigas) John S Karamoy said many national private entrepreneurs were interested in building small-capacity refineries or mini-refineries. 

   However, he admitted that the refinery development plan met with many obstacles, one of which was the certainty of off-takers or buyers of refinery products. This can be overcome if the private refinery business gets a processing deal or a processing agreement from Pertamina.

"Private refineries that will be built can also be accelerated, which is important to get a processing deal, namely this refinery will process only where Pertamina's ready-to-sell products and refinery owners only get processing fees [processing fees]," he explained.

He said he was pushing for plans to build mini refineries in eight clusters again. Because the plan was announced by the government a few years ago, but it hasn't started yet. These eight clusters are North Sumatra, Maluku Long Strait, Riau, Jambi, South Sumatra, South Kalimantan, North Kalimantan, and Maluku.

"We, together with Regionally Owned Enterprises, want to realize and hope that the eight units can be completed in 2027," said John.

Investor Daily, Page-10, Monday, June 29, 2020

2019, Pertamina Oil and Gas Production 901 BOEPD

PT Pertamina (Persero) recorded oil and gas production last year of 901 thousand barrels of oil equivalent per day / BOEPD, below the target set by 922 thousand BOEPD. However, the company was able to increase its oil and gas reserves to 309 million barrels of oil equivalent or 44% higher than the target.

   

     Pertamina Corporate Communication Vice President Fajriyah Usman said the company focused on working on the oil and gas blocks it manages to improve the performance of the upstream business.

Last year, the company succeeded in realizing 322 development wells and 14 exploration wells, carrying out 751 wells and maintaining 13,683 wells. So that the realization of oil and gas production last year was 901 thousand BOEPD.

"The oil and gas production of 901 thousand BOEPD is 414 thousand barrels per day (BPD) of oil and 487 thousand BOEPD of gas," She said

The realization of Pertamina's production is below the target set at 922 thousand BOEPD. For the realization of oil production, recorded in accordance with the target 414 thousand BPD. However, the realization of gas production of 487 thousand BOEPD was only 95.87% of the target of 508 thousand BOEPD.

Meanwhile, when compared to the 2018 performance, the realization of the company's oil and gas production declined. Because, in 2018, Pertamina managed to book oil and gas production of 921 thousand BOEPD. 

    The company's gas production last year was lower than in 2018 which amounted to 529 thousand BOEPD. However, the company's oil production last year rose 5.6% compared to 2018 which amounted to 392 thousand BPD.

Fajriyah explained, the company's oil and gas production was less than optimal due to technical obstacles that occurred in a number of production facilities. One of the obstacles is the lack of optimum compressor facilities in Pertamina's assets in Algeria, which is managed by PT Pertamina Internasional EP (PIEP) due to the high ambient temperature conditions.

"But what needs to be noted is that even without a substantial acquisition, in 2019, Pertamina was able to withstand the decline in oil and gas production by carrying out various activities such as drilling well development and aggressively reworking wells," She said.

She hopes the company's oil and gas production performance in the coming year will continue to increase. In addition to domestically, Pertamina is also actively producing oil and gas from its 13 oil and gas fields spread across Asia, America, and Europe.

In 2019, the realization of the oil production of foreign assets was recorded at 104 thousand BPD and 273 million standard cubic feet per day / MMSCFD gas. This step is Pertamina's effort to achieve national oil production of 1 million BPD and 4,000 MMSCFD of gas. 

      Meanwhile, in the new and renewable energy sector, Pertamina's geothermal production in 2019 reached 4,292 gigawatt-hours (GWh), up 3% compared to 2018 which recorded 4,182 GWh.

Investor Daily,  Page-10, Tuesday, June 23, 2020

Rokan Drilling Keeps Target Lifting

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is projecting drilling of 200 wells in the Rokan Block to maintain the lifting target next year.

the Rokan Block by Chevron

"In the Rokan Block, we are targeting the drilling of 200 wells by 2021," said SKK Migas Head Dwi Soetjipto.

PT Chevron Pacific Indonesia

At present, SKK Migas is still seeking investment certainty from PT Chevron Pacific Indonesia and Pertamina in the transition period over management. According to Dwi, this needs to be done to prevent production cuts when Pertamina enters as Rokan Block manager in August 2021.

Previously, Pertamina revealed that it would drill 44 wells following the management of the Rokan Block in August next year. PT Pertamina Corporate Communication VP Fajriyah Usman explained, with the additional drilling in stages, Pertamina would contribute around 60% to national oil and gas production in 2021.

Fajriyah Usman

"Pertamina is aware of the objective conditions in the Rokan Working Area that are already mature, so it is committed to holding back the pace of production decline," She said.

To support the drilling target, Pertamina made a number of preparations such as the procurement of logistics, rigs, and crew to ensure it could drill directly after the process of management transfer was complete. On the other side, SKK Migas ensured that oil and gas lifting in 2021 will be lower than this year, due to the influence of the corona pandemic (Covid-19).

SKK Migas pegged to oil and gas lifting next year at 1.71 million barrels of oil equivalent per day (boepd), which includes 705,000 barrels of oil per day (bopd) of petroleum and 1.01 million boepd of gas. As of May 2020, the realization of oil and gas lifting reached 1.71 million boepd. This figure is still equivalent to 88.996 of the APBN target of 1.95 million boepd and 99% of the Work Plan & Budget (WP and B) target of 1.80 million boepd.

"It is estimated that by the end of the year lifting will only be 1.70 million boepd," Dwi said.

Kontan,  Page-13, Friday, June 19, 2020

See Pertamina's New Structure

Friday, June 12, 2020, became a special day for PT Pertamina (Persero), because at that time through the General Meeting of Shareholders (GMS) held virtually during the Covid-19 pandemic, the structure of this oil and gas BUMN changed.

Although there have been many speculations circulating before, starting from the very hot one, namely the issue of replacing the President Director to the changes in the composition of the directors, the results gave many surprises. The government decided to keep Nicke Widyawati as President Director. For this, the government has its own reasons.

Nicke Widyawati

"So far, Nicke Widyawati is still the best as Pertamina's Managing Director, because it is able to carry out the tasks assigned," said SOE Minister Erick Thohir.

SOE Minister Erick Thohir

The government has also streamlined the number of directors from 11 to six, and the nomenclature of the position of directors of the state-owned oil and gas company has also been changed namely the finance director, director of logistics and infrastructure, director of human resources, director of business support and director of the portfolio strategy and new ventures.

What made the public ask was when the AGM abolished the positions of upstream director, corporate marketing director, retail marketing director, processing director, and director of processing and petrochemical megaprojects.

No wonder, considering that this position is very strategic for Pertamina which incidentally has a core business in the oil and gas sector. In addition, Pertamina also has a 'big project' which is building a number of oil refineries. However, it turns out the government wants the special business to be handled by a subsidiary (sub-holding).

"The establishment of this sub-holding is to integrate Pertamina's business which is handled by a number of its subsidiaries to become one focus," said Erick.

Fajriyah Usman

Pertamina Corporate Communication Vice President Fajriyah Usman explained, as holding Pertamina's duties would be directed at managing portfolios and business synergies throughout the Pertamina Group, accelerating the development of new businesses and running national programs.

Whereas the sub-holding will play a role to encourage operational excellence through the development of scale and synergy of each business, accelerate the development of existing business and business capabilities as well as increase the ability and flexibility in partnership and funding that is more profitable for the company.

Through this new structure, Pertamina is expected to become more agile, focused, and faster in developing world-class capabilities in its business. This is expected to accelerate the growth of the business scale to become a leading global energy company with a market value of US $ 100 billion and to be a driver of social development in 2024. 

    Energy Watch Executive Director Mamit Setiawan assesses the change in nomenclature within the new organization in Pertamina, as the efforts of the Ministry of SOEs in making Pertamina more efficient and better.

Sub Holdings

The five sub-holding companies are upstream sub-holding whose operations are handed over by PT Pertamina Hulu Energi (PHE), gas sub-holding by PT Perusahaan Gas Negara (PGN) Tbk, processing and petrochemical sub-holding by PT Kilang Pertamina International, electricity holding sub-companies and renewable energy by PT Pertamina Power Indonesia, PT Patra Niaga's commercial and marketing sub-holding, and shipping sub-holding by PT Pertamina International Shipping.

     Pertamina President Director Nicke Widyawati said that the transformation was carried out to prepare Pertamina's business lines to develop and be independent. Because at present Pertamina's business scope is very broad with different challenges and competitions and has specific risks of each.

"Therefore, with this sub-holding, every business can move faster and agile to develop world-class capabilities and business scale growth that will support Pertamina to become a leading global energy company with a market value of US $ 100 billion," said Nicke.

If you pay attention, the composition of Pertamina's sub-holding is not much different compared to that of other foreign oil and gas companies such as Petronas Malaysia and PTT Thailand. 

   In Petronas for example, there are 5 sub-holding companies including Upstream namely Petronas Carigali, International Business namely Petronas International Corporation, Downstream Business namely Petronas Chemical Group Berhad, Marketing, and Trading Business by Petronas Trading Corporation, and Power Business by Petronas Power. Regarding this matter, Mamit considers that there are indeed similarities with Petronas.

"Yes, I see it almost the same concept," he said.

He also agreed if one of the sub-holding conducted an IPO.

"Petronas has a shipping sub-holding named MISC Berhad and has an IPO and has now traveled everywhere," he said.

Another innovation made by the government and Pertamina is to place a number of young workers in strategic sub-holding positions. One of them, Mars Ega as Director of Business Planning and Development in the Commercial and Trading sub-holding. This 41-year-old young man said that this was a big challenge.

"But it must be realized that sooner or later a company needs regeneration, so what is more important is that every young worker must prepare well to become a successor to the company's management," he said.

He felt the benefits of Pertamina's talent development programs, especially in developing business and leadership competencies.

"This also shows that the company does not only look at the seniority side in the process of determining the position, hopefully, but this can also be an encouragement for other friends to make more achievements," he explained.

Investor Daily,  Page-12, Wednesday, June 17, 2020

WMIP Industrial Estate Supports the Entry of Oil and Gas Investment in Batam

PT Batam Sentralindo (PT BS) as the developer of the Westpoint Maritime Industrial Park (WMIP) industrial area, supports the efforts of the Indonesian government and the Riau Islands Provincial Government (Riau Islands) to make Batam an investment destination in the oil and gas sector. PT BS also opened itself to be able to cooperate with investors who will invest in Batam.

"We have built and developed the WMIP industrial area which has a strategic location in Batam. A portion of the 75-hectare WMIP area has also been leased by Sinopec Group for the construction of an oil depot with a capacity of 2.6 million m3, "said Senior Manager of PT Batam Sentralindo Paulus Khierawan.

Paulus explained the location of the WMIP industrial area is only about 4.8 km from the Straits of Melaka with a sea depth of 23-25 ​​meters. With its strategic location and competitive advantage, this industrial area can accommodate 300,000 DWT VLCC-Very Large Crude Carriers. In Accordance with Industrial Estate Business Licenses (IUKI) owned, the WMIP area can be developed up to 320 hectares.

"There is an area of ​​245 hectares that is being worked on for the expansion area at WMIP that can be used for the construction of oil refineries, downstream sectors such as petrochemicals, and also methanol plants that use feedstock from Natuna natural gas. As developers, we open ourselves to invite the entry of oil and gas investors to Batam which is also a Free Trade Zone and Free Port Zone (FTZ), "explained Paulus.

As one of the leading industrial estates in Batam, WMIP has received the status of Construction Direct Investment (KLIK) from the Investment Coordinating Board (BKPM). 

    This KLIK status also proves that the WMIP area has fulfilled the infrastructure facilities and facilities standards set by BKPM. With the KLIK facility, the project's physical construction can be directly carried out simultaneously with the licensing process through the assistance of industrial estate management.

"As WMIP developers, we are always compliant and obedient to follow the applicable rules and regulations. The administrative order we always carry out is part of a commitment to provide legal certainty for investors who will invest in WMIP, "Paulus said.

Investor Daily,  Page-10, Tuesday, June 16, 2020