Government Assesses Continuation of Bontang Refinery Project

 

The Ministry of Energy and Mineral Resources (ESDM) said the project to build a new fuel oil (BBM) refinery in Bontang, East Kalimantan was being reviewed again. In fact, this refinery project is still listed in the list of National Strategic Projects in accordance with Presidential Regulation Number 109 of 2020.

Since PT Pertamina ended its contract with a partner in 2019, the Bontang Refinery is still being studied, "the Director of Development of the Oil and Gas Program as well as the Acting Director of Downstream Oil and Gas Business Development at the Ministry of Energy and Mineral Resources Soerjaningsih.

The contract in question is the frame work agreement / FWA agreement between Pertamina and its partner Overseas Oil and Gas LLC (OOG), an oil and gas company from Oman. Pertamina stated that it had not continued the agreement that became the basis for forming the joint venture company for the Bontang Refinery Project since February 2020.

 the Bontang Refinery Project

Soerjaningsih said that the continuation of the Bontang Refinery Project was also hampered by land problems. Originally the refinery would be built on government-owned land in Bontang.

"There is a problem that the location in Bontang which is owned by the government is insufficient and this is still a special study related to capital expenditure," he explained.

Nicke Widyawati

Pertamina has stated that it has not continued with the Bontang Refinery Project since the middle of last year. At that time, Pertamina's President Director Nicke Widyawati revealed that his party would re-evaluate the refinery projects being undertaken, namely the Bontang Refinery. This also means that the company will no longer continue the process of finding new partners for this refinery project.

"The Bontang refinery hasn't been built yet," said Nicke.

Nicke briefly explained that this step was taken after the demand for fuel oil decreased after the Covid-19 pandemic. The company sees that although it will still grow, the increase in fuel oil (BBM) consumption is not likely to be as high so far. Apart from that, the Company's partners in the Bontang Refinery Project declared their resignation.

"So we will count the refinery project again. Previously there were six refinery projects, four refinery upgrading projects, and two building new refineries, we are correcting this. We only built one new refinery and upgraded four existing ones, ”explained Nicke Widyawati.

On the other hand, in Presidential Regulation number 109 of 2020, the Bontang Refinery Project is still included in the list of National Strategic Projects. Referring to this regulation, refinery projects that are included in the National Strategic Project are the Tuban Refinery Project, repair and upgrading of existing refineries in Central Java, East Kalimantan, Riau, and South Sumatra, upgrading and development of the petrochemical industry in Balongan, West Java, and construction of green refineries in Cilacap, Central Java and in Plaju, South Sumatra.

Soerjaningsih continued, the review of the Bontang Refinery Project would not interfere with the security of fuel supply in the future. For diesel, he said that almost all national needs can be met from domestic refinery production. In fact, for avtur, national production in 2020 can then be exported. The potential for avtur exports will be even greater with the completion of refinery projects.

"Meanwhile, imports of gasoline (gasoline) are still very high. However, with the onstream (operation) of the Balikpapan refinery in 2022 and several other refineries, it still imports [gasoline] but it is not too big, ”he explained.

The Bontang refinery, which was designed to have a capacity of 300 thousand barrels per day (BPD), was scheduled to operate in 2026. Now, without the Bontang Refinery, Pertamina projects that its processing capacity will increase from 1 million bpd to 1.8 million BPD. In addition, fuel production capacity will also increase from 600 thousand bpd to 1.5 million bpd and petrochemical products from 44 thousand bpd to 258 thousand bpd. All refineries will also be able to process crude oil with a sulfur content of up to 2% and produce Euro V quality fuel oil (BBM).

Investor Daily, Page-10, Thursday, Jan 21, 2021

Pertamina EP Adera Field Adds Production 751 BOPD

PT Pertamina EP, a cooperation contract contractor under the supervision of SKK Migas and a subsidiary of Pertamina Persero, has succeeded in increasing oil production by 751 barrels per day / BOPD from the BNG-A1 well at Adera Field. The amount of production is 500% of the initial target of 150 BOPD. The equivalent of oil and gas production from the BNG-A1 well reached 819 BOEPD or 145% of the target of 565 BOEPD, even though gas production reached 0.4 million standard cubic feet per day / MMSCFD.

General Manager of Pertamina EP (PEP) Asset 2 Astri Pujianto said the drilling program needed adjustments given the very strict health protocol for preventing the transmission of Covid-19. This requires regular health screenings to be carried out and of course limiting some activity.

"However, Alhamdulillah, the activities can be carried out, even faster than the specified target time," said Astri.

This drilling program using Rig PDSI D1500-E / 53 1500HP which was initially implemented with a target of 52 calendar days can be completed in 48 calendar days. This results in significant cost and time efficiencies.

Doctor Nirwan Abidin, Medical Supervisor of PEP Asset 2, said that adjustments to health protocols occurred with crew change and personnel operations while in the field. There are differences when carrying out drilling operations in normal times and during a pandemic, such as medical test screening when engineers and operators enter the location.

All personnel is obliged to carry out quarantine for four days and then carry out a PCR test, once the results are negative and they are declared fit to go to the location, after that the personnel is allowed to enter the work location.

"Conversely, if the results are positive and not fit, the person concerned are not allowed to enter the location or work," said Dr. Nirwan.

Nirwan added that although drilling activities were carried out with adjustments to health protocols during the COVID-19 pandemic, drilling activities could be carried out safely, smoothly, and safely. The Well drilling activity was successfully carried out after the completion of drilling in the K1 layer of the Talang Akar Formation (TAF) West Block Benuang Structure which has never been produced in the surrounding wells. As for the drilling in the West Block, the last Benuang Structure was carried out in 1986, so this success would certainly be a new potential and open up opportunities for increased production in the Adera Field.

PEP Asset 2 Exploitation Senior Manager Adang Sukmatiawan said that the success of drilling in BNG-A1 in early 2021 has encouraged the EPT Asset 2 Team to look for new oil reservoirs or reserves that have never been produced and to evaluate the potential for subsurface inter-field.

"We are also working with the Drilling and Workover team to mitigate the potential risks of drilling hazards that may be encountered," said Adang.

    Adera Field currently produces oil of 1,933 bopd and gas of 9.9 mmscfd. Based on SKK Migas' Integrated Operating System (SOT) data at the end of January 2021 year-to-date, PEP Asset 2 crude oil production stood at 17,730 bopd, while natural gas production was around 335 mmscfd. Asset 2's oil and gas production comes from the Prabumulih, Limau, Adera and Pendopo fields.

Investor Daily, Page-9, Saturday, Jan 16, 2021

Aramco Trading Honors Nicke Widyawati Top CEO 2020

 

The Aramco Trading, a global energy company based in Saudi Arabia, named Pertamina President Director Nicke Widyawati as Top CEO 2020. In this award titled The Aramco Trading New Silk Road CEO of the Year in 2020, Nicke Widyawati was named the best CEO for the Energy Refining category.

Nicke Widyawati

Nicke's crowning as Top CEO 2020 is based on the assessment and performance of Nicke who has outstanding achievements in the national oil and gas processing industry at the time of the Covid-19 challenges that hit the world. Nicke is also considered to have an outstanding record in building the progress of the oil and gas industry and interconnecting energy from the Middle East to Asia.

Nicke Widyawati revealed that this award was the result of the hard work of all Pertamina employees. This year, Pertamina experienced triple shocks as a result of the Covid-19 pandemic, namely, the world crude oil price dropped dramatically, decreased demand for fuel oil, and depreciated the rupiah exchange rate against the dollar. However, all Pertamina's business lines will continue to meet the 2020 target.

“Our aspiration is to become a leading global energy company with a market value of US $ 100 billion. The existing refineries and development programs are our commitment to fulfill the tasks mandated by the Government and focus on encouraging the development of refineries that are integrated with petrochemicals, "said Nicke Widyawati.

According to Nicke Widyawati, Pertamina also focuses on developing green refineries and new and renewable energy in order to fully implement the environmental, social, and government framework (ESG Framework). This step is taken so that Pertamina is more agile, adaptive, and sustainable in facing the challenges of the energy transition era which is in line with Pertamina's vision to become a world-class oil and gas company with a market value of US $ 100 billion.

"Within the framework of developing renewable energy, Pertamina will continue to optimize the use of domestic energy sources. The construction of the RDMP (Refinery Development Master Plan) and NGRR (New Grass Root Refinery) megaprojects continues to be completed to achieve national energy independence and sovereignty, "said Nicke Widyawati.

Investor Daily, Page-10, Friday, Jan 15, 2021

Heavy Duty Runway Lifting

 

Improving the performance of upstream oil and gas is still homework that needs to be completed by industry players in the country, in line with the low lifting achievement by some contractors.

Blogger Agus Purnomo in SKK Migas

Based on data from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), out of 15 large cooperation contract (KKKS) contractors that produce oil and condensate, eight companies are unable to meet the production targets ready for a sale (lifting) in the work program and budget (work program and budget / WP & B) 2020.

PT Pertamina EP

PT Pertamina EP, for example, realized lifting reached 93.5% of the WP&B. A similar condition occurred in Conocophillips (Grissik) Ltd with a lifting achievement of 92.2% from WP&B. 

Blogger Agus Purnomo In Petronas Carigali Ketapang

    Meanwhile, Petronas Carigali (Ketapang) Ltd was only able to record a lifting of 76.8% of the target. On the other hand, the KKKS with the largest oil production and lifting, ExxonMobil Cepu Limited (EMCL), is still able to meet the target in 2020 with the realization of lifting reaching 217,637 barrels per day (bpd) from the Cepu Block.

the Cepu Block and Banyu urip Field

This achievement came from the Banyu Urip field production which had reached a peak production of 230,000 bpd. In gas lifting, out of 15 large KKKS, there are also eight companies that are unable to meet the target according to WP&B, namely Conocophillips (Grissik) Ltd, Pertamina EP, Eni Muara Bakau B.V, and Medco E&P Natuna. 

Blogger Agus Purnomo In PHE-WMO

    Then, other contractors who failed to reach the target were Pertamina Hulu Energi West Madura Offshore (PHE-WMO), PT Pertamina Hulu Energi Jambi Merang, Husky-CNOOC Madura Ltd (HCML), and Pearl Oil (Sebuku) Ltd.

Deputy for Operations of SKK Migas, Julius Wiratno explained that his party was preparing a warning or warning for KKKS that did not reach the target in accordance with the deal.

"For the 2020 performance, a 'love letter' is currently being drafted, this week it is [sent]," he said.

He emphasized that the KKKS could get sanctions for not being able to achieve the target. Sanctions can be in the form of tightening KKKS spending until the KKKS work plans and budgets are not approved.

"There are also those whose cost recovery is not approved if it is not in accordance with the initial agreement," he said.

He also highlighted a number of subsidiaries of PT Pertamina (Persero) that have not been able to meet the lifting target last year. Julius assessed that this was due to economic problems in the field. However, SKK Migas and Pertamina have made an agreement to improve performance this year. 

    Previously, the President Director of PT Pertamina Hulu Energi, Budiman Parhusip, said that Pertamina has challenges with a high decline rate due to managing old fields. However, his party has prepared a number of contracts related to the drilling program to optimize lifting.

"We hope that the full cooperation will run smoothly," he said.

Meanwhile, Pertamina is planned to manage around 60% of the oil and gas fields in Indonesia. Currently, about 40% are still managed by this state-owned company. With this projection, the government also has high hopes for Pertamina in achieving the oil lifting target of 1 million BPD. Meanwhile, the government is deemed necessary to intervene in the decline in Pertamina's performance in the national upstream oil and gas sector.

Trisakti University lecturer Pri Agung Rakhmanto explained that the main factor for Pertamina's decline in production last year was due to the economy in the field plus the pressure of the Covid-19 pandemic. According to him, old fields have an effect on the decline in investment and Pertamina's business activities. Meanwhile, the Covid-19 pandemic has resulted in limited operational activities.

"Pertamina is now the backbone of national production with more and more blocks being transferred to it by mistake. The government should be able to provide more support, "he said.

He suggested that the cooperation contract should include fiscal aspects affected by the latest economic conditions. Meanwhile, Executive Director of the National Oil and Gas Companies Association (Aspermigas) Moshe Rizal said that the fall in oil prices coupled with a decrease in demand due to the Covid-19 pandemic has indeed put heavy pressure on KKKS financially. 

    In addition, operational activities are hampered by large-scale social restrictions (PSBB) even though the budget is available. As a result, project execution is hampered, including maintenance operations, workovers, and other activities that can help maintain production levels.

"For this year, everything depends on how fast we recover economically and how fast the distribution of vaccines is so that it can reduce the infection rate," he said.

The President Joko Widodo

PRICE OF POWER PLANT GAS

President Joko Widodo has set the price of natural gas for power plants at a maximum of US $ 6 per MMBtu. The regulation is in Presidential Regulation Number 121 of 2020 concerning Amendments to Presidential Regulation Number 40 of 2016 concerning Natural Gas Pricing which was promulgated on December 29, 2020. In Article 4 Paragraph 3 it is stated that the determination of certain natural gas prices can be given to natural gas users. engaged in the supply of electricity for the public interest. 

This Presidential Regulation is in line with the Minister of Energy and Mineral Resources Regulation Number 10 of 2020 concerning Amendments to the Regulation of the Minister of Energy and Mineral Resources Number 45 of 2017 concerning Utilization of Natural Gas for Power Plants. This regulation confirms the adjustment of the gas price for PT PLN (Persero) 's needs to be the US $ 6 per MMBtu.

Bisnis Indonesia, Page-4, Thursday, Jan 7, 2021

Hard Work in the Upstream Oil and Gas Industry

 

Although the oil and gas industry is still challenging, the Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas still targets 14 upstream projects to start operating this year.

SKK Migas Operations Deputy Julius Wiratno said that this year, there were 12 upstream oil and gas non-PSN (National Strategic Projects) projects that were targeted to start operating or onstream. The number is an increase of one project compared to last year's target.

Blogger Agus Purnomo in SKK Migas

"There will be 12 non-PSN projects on stream with a project value of US $ 354 million and the potential for additional oil production of 27,000 bpd and 492 MMscfd of gas," he said.

Meanwhile, the two PSN projects that will be onstream in 2021 are the Jambaran Tiung Biru project by PT Pertamina EP Cepu (PEPC) and the Tangguh Train-3 project by BP. 

PT Pertamina EP Cepu (PEPC)

    The Jambaran Tiung Biru project is projected to be onstream in the fourth quarter of 2021. The project work as of the third quarter of 2020 still reached 74.28% of the target of 88.28%. 

The Jambaran Tiung Biru Oil Field

    Similar to the Tiung Biru Jambaran Project, the Tangguh Train-3 project is projected onstream in the fourth quarter of 2021. As of September 2020, the progress of Tangguh Train-3 onshore work has reached 88.27%, and offshore has reached 98.27%.

the Tiung Biru Jambaran Project

"Apart from the difficulties of the Covid-19 pandemic, we are still targeting onstream at the end of 2021," he said.

Although SKK Migas is optimistic that the work plan in the upstream oil and gas sector will proceed as planned, a number of challenges, particularly those affecting the project's economy, are still looming. The government is also considered to have to be more active so that a number of oil and gas projects whose work is constrained can be realized immediately. 

    So far, there are two upstream oil and gas projects that are still unclear because the company plans to release its participation, namely Shell in the Masela Block Abadi field project and Chevron in the Indonesia Deepwater Development (IDD) project.

Trisakti University teaching staff Pri Agung Rakhmanto explained that in the case of the Masela Block project, the government needs to be more active to play a role in obtaining gas buyers. Meanwhile, in the IDD project, middle ground and a compromise must be found in terms of project economics. 

    An observer of the energy economy from Gadjah Mada University Fahmy Radhi is of the opinion that the government should step in so that the Masela Block construction can be completed on time, including in land acquisition to build a pipeline network. This is an important part needed to distribute the gas produced from the Abadi field.

"The challenge is completing the construction and pipeline infrastructure for gas distribution from the Masela Block to consumers. With great prospects, it is not difficult for Inpex to find investors to replace Shell, "he said.

The Executive Director of the National Oil and Gas Companies Association (Aspermigas), Moshe Rizal Husin, assessed that the homework that the government still has to do is to revive the investment climate in the upstream oil and gas sector. Meanwhile, based on SKK Migas data, the realization of upstream oil and gas investment in 2020 only reached the US $ 10.21 billion, lower than the target of US $ 12.1 billion. For this year, SKK Migas is targeting upstream oil and gas investment of US $ 12.3 billion.

"There must be a significant breakthrough and commitment from the government that creates certainty. The oil and gas business is long-term and has a very large multiplier effect, ”said Moshe.

Moshe hopes that the condition of the upstream oil and gas industry this year can run better with stable oil prices at a level above the US $ 50 per barrel or even could improve to the level of US $ 60 per barrel in the third quarter of 2021.

KEEP PRODUCTION

In other developments, the development program in the Mahakam Block will run more aggressively in order to reduce the rate of natural production decline. SKK Migas has approved the work plan of PT Pertamina Hulu Mahakam (PHM) in 2021 with more drilling activities compared to 2020. Thus, production in the Mahakam Block in 2021 is expected to increase with more massive and aggressive optimization.

Deputy of Finance and Monetization of SKK Migas Arief S. Handoko said that if production from the Mahakam Block drops, domestic LNG production will also decline. However, PHM will get incentive approval so that production is maintained.

Merakes Field By ENI Italy

"The possibility of production stays, even increases. In addition, there is a new Merakes field that will contribute so that LNG production will increase, ”he explained.

Agus Amperianto

Likewise, General Manager of PHM Agus Amperianto said that his party is optimistic that it can maintain production in the Mahakam Block by optimizing work in the field development operations that have been approved by SKK Migas.

"Currently, what is possible for Mahakam to do is how to survive in times of crisis," he said.

He added that this year there are a number of efficiency programs, including reducing the operating costs of the Mahakam Block effectively and efficiently. In addition, PHM will also strengthen operational activities through collaboration, strengthening knowledge management, and organizational transformation. 

    Based on the 2021 work program and budget (WP&B), PHE will carry out 73 development well drilling activities and two exploration wells drilling. Meanwhile, as of December 31, 2020, the realization of PHE's oil and gas production was still above the target.

Oil and condensate production was recorded at 26,363 bpd or 102% of the revised WP&B of 25,722 bpd. Meanwhile, gas production reached 606 MMscfd or 103% compared to the revised WP&B of 588 MMscfd.

Bisnis Indonesia, Page-4, Tuesday, Jan 5, 2021

HCML guarantees Availability of Gas Supply During Pandemic

 

Husky-CNOOC Madura Limited (HCML) ensures the availability of gas supplies during the pandemic. Production continues under strict health protocol standards. In carrying out field projects, HCML applies the same health protocol and understanding to all workers and contractor workers. They always coordinate with the Health, Safety, Security and Environment (HSSE) Department team to get medical attention.

"All of this is a form of HCML's commitment to contribute in securing the national gas supply during this difficult time," said Hamim Tohari, Manager of the HCML Regional Office.

Not only does it continue to produce with strict health standards, but HCML also continues to distribute CSR (Corporate Social Responsibility) to a number of villages around the HCML working area in the Sampang Madura Regency area. These community programs cover areas that are basic needs of society, namely economy, education, health, and infrastructure.

Hamim said HCML is committed to being a partner of the local government in developing the community. "We will always support regional progress. Especially on the momentum of the 397th anniversary of Sampang Regency," he said.

The HCML participation fund is a form of that care and concern. It is hoped that it can help the Sampang government in improving the welfare of residents in the village.

"For this reason, HCML hopes that the support of all stakeholders can help smooth the production of HCML natural gas in the waters of the Madura Strait," he said.

As is well known, in certain seasons there are often misunderstandings between fishermen and companies. In certain months, there are some fishermen who keep their activities within a limited and forbidden radius in the oil and gas field. In fact, this is very dangerous for operations and fishermen if there is a sudden increase in gas pressure.

"For that, in the future, we really hope for the support of all stakeholders to be able to provide understanding to fishermen regarding this matter," said Hamim.

Duta Masyarakat, Page-16, Monday, Jan 4, 2021

SKK Migas Wait for Eni

 

The Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas awaits Eni as a potential replacement partner for Chevron in the Indonesia Deepwater Development (IDD) project in East Kalimantan. Meanwhile, PT Chevron Pacific Indonesia is said to be releasing the management of the IDD project in the near future and the strategic partner who is said to have the most potential to replace him is Eni.

Eni.

"Eni is still discussing the commercial. The hope is that January 2021 will have an answer. This is what we will wait for, "said Fatar.

Dwi Soetjipto

Head of SKK Migas Dwi Soetjipto said that Eni was one of the potential partners who could replace Chevron in the IDD project considering Eni's facilities in Muara Bakau and Merakes could be integrated. In the IDD project, Chevron acts as operator and majority shareholder of 63%. Chevron is working on this deep sea oil and gas project with other joint venture partners, namely Eni, Tip Top, PT Pertamina Hulu Energi (PHE), and partners in Muara Bakau.

Blogger Agus Purnomo in SKK Migas

This project will combine four fields, namely Bangka, Gehem, Gendalo, and Gandang Fields. The Gehem, Gendalo, and Gandang fields are included in the Ganal Block. In another development, the process of releasing Shell Upstream Overseas Ltd.'s participating interest (PI) The Masela Block Abadi Field project is projected to be completed by the end of 2021. The PI to be released is already in demand by a number of parties although it has not been specifically mentioned by SKK Migas. Meanwhile, the Abadi Masela Field project is a large project with an estimated investment of US $ 19.8 billion. Therefore, the PI release process may not proceed quickly.

In its development, Inpex Masela Ltd. as the operator has submitted a document of environmental impact analysis (amdal) for the Abadi Masela LNG project to the Ministry of Environment and Forestry. Act. Inpex Masela Corporate Communication Manager Moch N. Kurniawan said that SKK Migas and Inpex had submitted the EIA documents for the Abadi LNG project on December 18, 2020. This is in accordance with SKK Migas directives for the acceleration of the Abadi LNG National Strategic Project. SKK Migas Wait Eni

The Special Task Force for Upstream Oil and Gas Business Activities or SKK Migas awaits Eni as a potential replacement partner for Chevron in the Indonesia Deepwater Development (IDD) project in East Kalimantan. Meanwhile, PT Chevron Pacific Indonesia is said to be releasing the management of the IDD project in the near future and the strategic partner who is said to have the most potential to replace him is Eni.

"Eni is still discussing the commercial. The hope is that January 2021 will have an answer. This is what we will wait for, "said Fatar.

Head of SKK Migas Dwi Soetjipto said that Eni was one of the potential partners who could replace Chevron in the IDD project considering Eni's facilities in Muara Bakau and Merakes could be integrated. In the IDD project, Chevron acts as operator and majority shareholder of 63%. Chevron is working on this deep sea oil and gas project with other joint venture partners, namely Eni, Tip Top, PT Pertamina Hulu Energi (PHE), and partners in Muara Bakau.

This project will combine four fields, namely Bangka, Gehem, Gendalo, and Gandang Fields. The Gehem, Gendalo, and Gandang fields are included in the Ganal Block. In another development, the process of releasing Shell Upstream Overseas Ltd.'s participating interest (PI) The Masela Block Abadi Field project is projected to be completed by the end of 2021. The PI to be released is already in demand by a number of parties although it has not been specifically mentioned by SKK Migas. Meanwhile, the Abadi Masela Field project is a large project with an estimated investment of US $ 19.8 billion. Therefore, the PI release process may not proceed quickly.

In its development, Inpex Masela Ltd. as the operator has submitted a document of environmental impact analysis (amdal) for the Abadi Masela LNG project to the Ministry of Environment and Forestry. Act. Inpex Masela Corporate Communication Manager Moch N. Kurniawan said that SKK Migas and Inpex had submitted the EIA documents for the Abadi LNG project on December 18, 2020. This is in accordance with SKK Migas directives for the acceleration of the Abadi LNG Abadi National Strategic Project.

Bisnis Indonesia, Page-4, Monday, Jan 4, 2021

Upstream Oil and Gas Successfully Recorded Excellent Performance

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) has managed to record brilliant performance throughout 2020 by achieving several targets set by the government.

Blogger Agus Purnomo in SKK Migas

It is recorded that the national upstream oil and gas sector produced five impressive achievements in the aspects of the Reserve Replacement Ratio (RRR), oil and gas lifting, cost recovery control, state revenues, and completion of upstream oil and gas projects.

At the end of 2020, oil lifting was recorded at 706 thousand barrels of oil per day (BOPD) or 100.2 percent exceeding the target of the Revised State Budget (APBN-P) which was set at 705 thousand BOPD.

Meanwhile, gas lifting was 5,461 million standard cubic feet per day (MMSCFD), slightly below the APBN-P target of 5,556 MMSCFD or reached 98.3 percent. As for state revenues, the figure achieved was US $ 8.4 billion, or 141 percent of the target set at the US $ 5.86 billion.

Dwi Soetjipto

"2020 is a difficult year for all business actors, especially in the upstream oil and gas sector, apart from being affected by the Covid-19 pandemic, we are also overshadowed by low world oil prices. However, thanks to hard work with KKKS (Cooperation Contract Contractors), in the end, the upstream oil and gas industry succeeded in exceeding several targets set by the government. The contribution of this industry is expected to help the national economy which is also affected by the pandemic, ”said the head of SKK Migas, Dwi Soetjipto.

Dwi added that another achievement was that SKK Migas was able to complete 15 onstream projects out of the 11 targeted onstream projects or 136 percent. Of these 15 projects, the potential for additional oil production is 9,182 BOPD and gas of 111 MMSCFD. The upstream oil and gas investment reached the US $ 10.21 billion and cost recovery control was US $ 8.12 billion according to the government's target.

According to the Deputy Head of SKK Migas, Fatar Yani Abdurrahman, during the 2020 period, there were several important milestones that were achieved including the completion of 24 PSC Side Letters and 61 LoAs and Amendments to the Natural Gas Sale and Purchase Agreement (PJBG) related to gas price adjustments in accordance with the Regulation of the Minister of Energy and Mineral Resources No. 89K / 2020 and 91K / 2020.

"The total adjusted gas reaches 2,601 British thermal units per day (BBTUD), consisting of 1,205 BBTUD for the downstream industry and 1,396 BBTUD for the State Electricity Company (PLN). This gas price adjustment aims to have an economic impact on the country through growing downstream industrial activities and reducing the burden of electricity subsidies, "he explained.

In addition, SKK Migas also successfully completed the Heads of Agreement (HoA) for the transition to the Rokan Block on September 28, 2020.

PT CPI (Chevron Pacific Indonesia)

"With the implementation of the HoA, PT CPI (Chevron Pacific Indonesia) can conduct drilling to maintain Rokan production until the end of the contract," explained Fatar.

Sakakemang Block

Fatar added that the first Plan of Development (POD) for the Kaliberau Field, Sakakemang Block was also approved by the government on December 29, 2020. With this approval, the realization of the Reserve Replacement Ratio (RRR) stands at 101.6 percent with additional reserves of 705.16 MMBOE.

Meanwhile, based on this brilliant record, Fatar said SKK Migas was optimistic in welcoming 2021. He said that his party had finished compiling work programs and budgets with KKKS to achieve government targets.

"We know that the oil lifting target that has been set has not changed from this year, which is 705 thousand BOPD. To ensure there is no decline in production, SKK Migas is trying to carry out massive, aggressive and efficient activities. We are also determined, in 2021 there is no decline in national oil and gas production, "he concluded.

Bhirawa, Page-10, Monday, Jan 4, 2021

Potential The Rokan Block Still Becomes SKK Migas Mainstay

    The Rokan Work Area (WK) which will be managed by the Cooperation Contract Contractor (KKKS) Pertamina Hulu Rokan in August 2021 still has large potential reserves. Therefore, the success of managing the block is one of the keywords for success towards achieving the target of 1 million BOPD (barrels of oil per day) and 12 BSCFD of gas (billion cubic feet per day) by 2030.

    That is the summary of the Focus Group Discussion entitled "Guarding the Transition of Rokan, Maintaining National Production" which was held online in Jakarta (23/11). 

Satya Widya Yudha

    The FGD presented expert advisors to the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Satya Widya Yudha, Head of the Formality Division of SKK Migas, Didik S. Setyadi, Head of the Management of Goods and Services Procurement Division of SKK Migas, Erwin Suryadi, IATMI Practitioners, Hadi Ismoyo, National Oil and Gas Observer, Mukhtasor, Fahmy Radhi, and Abdul Muin.

    Satya said the potential oil reserves from WK Rokan are estimated to be 2 billion barrels. 

The Rokan Work Area (WK), Chevron

"Taking into account the existing potential, the WK Rokan will remain the backbone of national oil and gas production for a long time, through existing fields, field optimization, optimization of a waterflood, steam flood, and chemical EOR methods. So this working area will also be a mainstay to support the production target of 1 million barrels in 2030, "said Satya.

    Seeing this opportunity, SKK Migas is trying to make the transition period until 2021 run smoothly. This effort is not only a transition related to production operations but also other crucial matters, namely land-related permits.

Blogger Agus Purnomo in SKK Migas

"In the identification of SKK Migas, there is land that will be the drilling location but has not been certified as belonging to CPI (Chevron Pacific Indonesia), there is also the land that is still owned by the community. Permit readiness is absolutely passed because drilling equipment even though it is ready will be constrained if the land which is the drilling location is still controlled by other parties or the legality status is unclear, "said Head of the Formality Division of SKK Migas, Didik S. Setyadi.

Chevron Pacific Indonesia

    As an effort by SKK Migas to handle this matter, Didik said that his party is currently encouraging licensing to remain attached to the old operator. 

"Through the ODSP (One Door Service Policy), SKK Migas and CPI will resolve the licenses that are still neglected, this is so that while waiting for new operators to enter, operations will not stop. November 26, 2020, the list of licenses required by CPI must be final, "he explained.

    A similar sentiment was also conveyed by the Head of the Procurement Division of SKK Migas, Erwin Suryadi. 

“SKK Migas already has experience assisting the transfer of management of non-Pertamina CAs to Pertamina. We make learning each case so that when we manage the transfer of management of WK Rokan, we are sure that investors can still be implemented, "he said.

The Rokan Block Working Area Oil and Gas

    National oil and gas observer, Mukhtasor, said the transfer of management was quite complicated because the cooperation contract did not regulate matters related to management transfer. 

"One of the articles in the Ministerial Regulation ESDM # 15 of 2015 states that new operators can enter 6 months before the contract expires, this is not effective and will not be able to maintain production when new operators enter, "he said.

    However, his party appreciates the steps taken by CPI and SKK Migas which are trying to guard the transfer of management well, because there are many things that are not regulated but are done by CPI and SKK Migas so that the transfer of management runs well. One of them is the preparation of the 2020 AMDAL/IEA document. 

"As a resource person from the Ministry of Environment and Forestry in the preparation of upstream oil and gas, I am very proud of the proposed AMDAL," he said.

"Governance in the transitional period must be improved and currently is outside the realm of SKK Migas. This is the right momentum so that the authority of SKK Migas in terms of the transition to the end of the CA can be lifted so that the future transition can be carried out better, "continued Mukhtasor.

Importance of Investment

    The speakers saw that efforts to increase production at the Rokan WK could be realized if there was sufficient investment needed. Oil and gas practitioner, Hadi Ismoyo conveyed, it takes a strong commitment from Pertamina and the government, to invest tens of millions of dollars because the activities carried out must be quite massive.

    Gadjah Mada University energy economy observer, Fahmi Rady hopes that Pertamina will focus on concentrating its strength in WK Rokan, whose potential is still very large and the results are certain. Meanwhile, another upstream oil and gas observer, Abdul Muin, added that the way to increase oil and gas production in WK Rokan is through aggressive investment and must be realized according to commitments.

"So, if Pertamina has difficulties related to investment costs, it is better to open up options to cooperate with other companies. This is commonly done by the upstream oil and gas industry because they will also share risks and collaborate according to their respective advantages, "concluded Muin.

Source: Press release SKK Migas, Tuesday, Nov 24, 2020

21 EOR Projects will be Upstream Until 2030

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) plans 21 enhanced oil recovery (EOR) projects to start operating until 2030. EOR is planned to support the achievement of the oil production target of 1 million barrels per day (BPD)  by 2030.

Blogger Agus Purnomo in SKK Migas

Head of SKK Dwi Soetjipto said, if there is no effort, national oil production will continue to decline in the future. In order to achieve the target of 1 million bpd by 2030, a number of strategies have been formulated by his party, namely accelerating the transformation from reserves to production, exploration, and implementation of EOR activities.

Dwi Soetjipto

"A total of 21 EOR projects using polymers, surfactants, and CO2, are planned to start onstream until 2030," he said.

He explained that his party had identified which oil and gas fields this EOR activity would apply. In SKK Migas data, there are 42 oil and gas fields that are candidates for this EOR activity. Unfortunately, the implementing agency for upstream oil and gas activities did not specify which fields would start producing additional production by 2030.

"We have identified which arenas [for EOR], and what the reserves and production are like," said Dwi.

The 42 oil and gas fields are Minas, Melibur, Bangko, Medium Water, Widuri, Bajubang, Kenali Asam, Batang, Tanjung, Bekasap, Guruh, Ramba, Jatibarang, Zelda, Eman, Walio, and Duri Ring fields. Apart from that, there were Krisna, Rantau, Limau PQ, Tanjung Tiga Barat, Zulu, Pedada, Rantau Bais, Jirak, Balam South, Tempino, Farmers, Handil, Gemah, Kaji May, Prosperous, Kulin, Zamrud, and Raja fields.

Referring to SKK Migas data, the EOR project is targeted to start increasing national oil production in 2024 with two projects starting onstream. Furthermore, in 2025 and 2027, two projects each are targeted to start producing. After that, a total of 6 EOR projects are planned to start operating in 2028, 5 projects in 2029, and 4 projects in 2030.

Meanwhile, the rest of the EOR projects are scheduled to start production in 2031-2040. In detail, as many as 8 EOR projects will operate in 2031, 5 projects in 2032, 3 projects each in 2033-2034, 2 projects in 2035, 1 project in 2036, 4 projects in 2037, 1 project in 2038, and finally 4 projects by 2040.

Secretary-General of the Indonesian Petroleum Engineering Experts Association (IATMI) Hadi Ismoyo said, there is indeed the potential for additional oil production from EOR activities. However, not only technical aspects but the government must also pay attention to economic aspects so that additional production can be realized.

"The government must open up and provide extraordinary support, including from the fiscal side," he said.

The Rokan Block Chevron

Rokan Block

Dwi added, one of the large potential additional oil production from EOR is expected to come from the Minas Field, Rokan Block. Referring to SKK Migas data, Minas Field will become the backbone of national oil production with production reaching 52 thousand bpd in 2030.

"We hope that EOR Minas can be executed. We depend on Pertamina and partners to make it happen, "he said.

Hadi added that it should be focused on fields that have the potential to generate large amounts of additional oil production, one of which is the field in the Rokan Block. This is because EOR activities are not necessarily economical if they are applied in small fields.

"In Rokan, the original oil base is 8.5 billion barrels. If we talk about 10% recovery, we will already get 850 million barrels, ”he said.

PT Pertamina Hulu Energi (PHE)

Director of Strategic Planning and Business Development of PT Pertamina Hulu Energi (PHE) John H Simamora said, in the EOR planning by SKK Migas, the Rokan Block was included in it. 

PT Chevron Pacific Indonesia 

    He has entrusted the government and SKK Migas with regard to the EOR project, primarily for the implementation of the EOR test which has been carried out by PT Chevron Pacific Indonesia as the current Rokan Block operator. However, his party is concerned about the economic aspects of the EOR project in the Rokan Block if you see the current oil price developments.

"If the price of oil is still like today, I myself don't think we can run EOR economically," he said.

However, this could be different if the government had other perspectives in implementing this EOR. One of them, if the government will provide incentives to increase the economy of the EOR project.

"But primarily, we want oil prices to improve," said John.

When signing the Rokan Block contract, the implementation of EOR activities was one of Pertamina's commitments. This is as stated in the Decree of the Minister of Energy and Mineral Resources 1923K / 10 / MEM / 2018. Some of these activities are the US $ 4 million EOR study, US $ 247 million stage-1 CEOR 7 pattern, and the US $ 88.6 million stage-1 steam flood Kulin or Rantau Bais.

Investor Daily, Page-10, Monday, Nov 23, 2020