Pertamina-Chevron Intensively Discuss the Rokan Block

 

    PT Pertamina (Persero) continues to strengthen its business strategy by preparing for the transfer of management of the Rokan Block which will start operating PT Pertamina Hulu Rokan (PHR) on August 9, 2021. Pertamina continues to coordinate intensively with PT Chevron Pacific Indonesia (CPI) to discuss the Rokan Block.

PT Chevron Pacific Indonesia (CPI)

"We coordinate intensively with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and CPI, especially regarding the transition to nine main areas in order to ensure the continuity of all operations and routine activities after the Rokan Block is operated by PHR," said PHR's Managing Director. RP Yudantoro.

Blogger Agus Purnomo In SKK Migas

    Yudantoro said that the nine main areas of the Rokan Block transition include drilling workover, electricity and steam supply, contracts and SCM, IT and Petrotechnics, data transfer, human capital, SOPs and permits, chemical EOR and the environment, and abandonment and site restoration (ASR). 

the Rokan Block by Chevron

    Yudantoro said Pertamina's upstream sub-holding through PHR had also prepared a long-term program to maintain production and curb the rate of decline in oil. According to him, the Rokan Block is a block that naturally has experienced a decline in production from year to year condition, Yudantoro continued, efforts to contain the rate of decline and increase production are the most crucial things in the Rokan Block. At least, there will be 44 development wells that will be drilled in 2021 after the Rokan Block is transferred to Pertamina.

    Pertamina Hulu Energi (PHE) Corporate Secretary Whisnu Bahriansyah said the readiness to transfer the management of the Rokan Block was not only carried out in the operational aspect but also fostering good relations with stakeholders. The Rokan Block is a production contributor block as much as 24 percent of national production. 

    Currently, the PT Chevron Pacific Indonesia (CPI) operates with an average production of around 165 thousand barrels per day. The Rokan Block has five large fields, namely Duri, Minas, Bangko, Balam South, and Petapahan which are scattered in five districts in Riau Province.

PT Perusahaan Listrik Negara

    The development of the Rokan Block involves a number of State-Owned Enterprises (BUMN). Apart from Pertamina, PT Perusahaan Listrik Negara (Persero) will meet the demand for electricity and steam in the Rokan Block working area. PLN has signed a power and steam power purchase agreement (SPJBTLU) with PHR.

    PLN will optimize the three-year transition period by constructing the Sumatra system interconnection to replace the transitional supply and increase the supply capacity to PHR. In 2024, it is estimated that the Sumatra system's power reserve will be 3,811 megawatts (MW) or 46.1 percent, so it is certain that it is ready to meet the electricity needs of the Rokan Block.

Investor Daily, Page-10, Tuesday, Feb 17, 2021

Pertamina Prepares 9 Main Areas for Transfer of Management of the Rokan Block

 

    PT Pertamina (Persero) continues to strengthen its business strategy by preparing for the transfer of management of the Rokan Block, which Pertamina will start operating through its subsidiary PT Pertamina Hulu Rokan (PHR) on August 9, 2021. For the transition, 9 main areas were prepared to ensure the continuity of all operational activities and routine activities after the block was operated by PHR.

PT Chevron Pacific Indonesia (CPI)

"We coordinate intensively with SKK Migas and PT Chevron Pacific Indonesia (CPI), especially for the transition to 9 main areas in order to ensure the continuity of all operational activities and routine activities after the block is operated by PHR," said the President Director of PT Pertamina Hulu Rokan (PHR). RP Yudantoro.

    The nine main areas of the Rokan transition include Drilling Work Over, Electricity and Steam Supply, Contracts and SCM, IT and Petrotechnical, Data Transfer, Human Capital, SOP and Licensing, Chemical EOR, and Environment and ASR (Abandonment and Site Restoration). 

    Sub holding Upstream Pertamina through PHR has also prepared a long-term program to maintain production and curb the rate of decline in oil. The Rokan Block is a block that has experienced a natural decline in production from year to year. For this reason, efforts to contain the rate of decline and increase production are the most crucial things.

    There will be at least 44 development wells that will be drilled in 2021 after the block is transferred to Pertamina. And another 40 additional development wells are planned, according to discussions with SKK Migas. 

Blogger Agus Purnomo in SKK Migas

    Yudantoro explained that apart from drilling development wells, in the long term other programs have also been prepared in the form of Infill Drilling, exploration well drilling, workover/well intervention, optimization of waterflood and steam flood programs, CEOR, and other programs to increase reserves.

"In accordance with the period of the production sharing contract with the Government, the Rokan Block will be operated until 2041 by PHR. At that time, we had to ensure that the Rokan Block would continue to contribute optimally to national production through the various programs we implemented, "said Yudantoro.

    Whisnu Bahriansyah, Corporate Secretary of Pertamina Hulu Energi (PHE), added that readiness for management transfer is not only carried out in the operational aspect but also in fostering good relations with stakeholders.

"Subholding Upstream Pertamina through PHR also prepares community programs, so that after the transfer of management it is not only the operational side that will run sustainably but also on the social, community and environmental side," concluded Whisnu.

    The Rokan Block is a production contributor block as much as 24% of national production. Currently operated by PT Chevron Pacific Indonesia with an average production of around 165 thousand barrels per day. The Rokan Block has five large fields, namely Duri, Minas, Bangko, Balam South, and Petapahan, which are spread across five districts in Riau Province.

Investor Daily, Page-10, Tuesday, Feb 17, 2021

2021, Domestic LNG Sales are Projected to Decrease

    PT Pertamina (Persero) projects domestic sales of Liquefied Natural Gas / LNG) this year to drop to 17.6 cargoes compared to last year's 23.5 cargoes. This is because the domestic market is still affected by the Covid-19 pandemic.

President Director of Pertamina Nicke Widyawati

    President Director of Pertamina Nicke Widyawati said that the Covid-19 pandemic has suppressed domestic gas demand this year when compared to 2020. The fall

    The main demand for LNG is from PT PLN (Persero) after the drop in electricity consumption has prompted the company to prioritize electricity production from the PLTU.

"In total national LNG demand this year is 17.6 cargoes from 23.5 cargoes in 2020," he said in a meeting with Commission VII in the energy sector of the Indonesian House of Representatives.

    LNG sales also dropped significantly from the realization in 2019 which reached 38.3 cargoes. Referring to Pertamina's data, of last year's total LNG sales of 23.5 cargoes or 68.35 trillion British thermal units (TBTU), supply to PLN reached 22.5 cargoes. In detail, the supply to PLN is through FSRU Lampung with 18 cargoes, Benoa 3.2 cargoes, Amurang 0.4 cargoes, and Samberah 0.9 cargoes. 

    Meanwhile this year, the projected sales of 17.6 cargoes are entirely for PLN, namely through FSRU Lampung with 13 cargoes, Benoa and Amurang 3 cargoes, and Samberah 1.6 cargoes. Even though in 2019, LNG demand from PLN reached 37.2 cargoes, namely through FSRU Lampung 3.2 cargoes, Benoa 3.2 cargoes, and Samberah 0.6 cargoes.

    Apart from PLN, domestic LNG sales are also to PT Pupuk Iskandar Muda (PIM) and PT Pertamina Niaga. However, PIM only needs LNG when it supplies gas through pipeline insufficient, while Pertagas Niaga has no need in 2020 and 2021. In detail, LNG sales to Pertagas Niaga are 1.1 cargoes in 2019 and PIM 1.1 cargoes in 2020. Seeing this condition, exports need to be made to market the company's LNG production. 

    Although, the global gas market is also constrained by the impact of the Covid-19 pandemic, even demand from Japan and China, which are the largest markets, also fell.

"However, we are still maintaining the foreign market so that the projection in 2021 overseas demand is 68.3 cargoes, a slight increase from 2020," he said.

    The company's LNG export realization last year, according to data, reached 60.6 cargoes, namely to China 22.1 cargoes, Japan 21 cargoes, South Korea 10 cargoes, Taiwan 3.2 cargoes, Pakistan 1.1 cargoes, Singapore 0.4 cargoes, and Thailand 2.7 cargo. 

    Meanwhile, in 2019, the company's LNG exports reached 72.2 cargoes with the aim of China 18.6 cargoes, Japan 41 cargoes, South Korea 4.2 cargoes, Taiwan 3.4 cargoes, Pakistan 1.1 cargoes, Singapore 1.3 cargoes, and Thailand 2.6 cargo.

   

Blogger Agus Purnomo in SKK Migas

 Deputy for Finance and Monetization of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Arief S Handoko revealed that competition for LNG sales in the global market will be tighter after the Covid-19 pandemic which continues this year.

"The price of LNG has become a new normal because there are more LNG suppliers, so the price competition is getting tighter," said Arief.

Refinery Needs

    In the future, Pertamina is optimistic that domestic gas demand will increase. According to Nicke, the increase in gas demand is one of the reasons for the completion of the improvement and capacity-building project (upgrading) of existing refineries and the construction of new refineries. Gas demand for refineries is estimated at 1.5 million tons per year and will increase to 6.4 million tons per year in 2025. The company plans to replace the fuel at the refineries with gas.

"So that gasification occurs and will reduce the cost of energy for the Pertamina Group as a whole," said Nicke.

    However, referring to Pertamina's data citing Indonesia's 2018-2027 Gas Balance Sheet, the national gas supply will experience a deficit of up to 8.25 million tons per year starting 2025. This is in accordance with Pertamina's gas supply-demand analysis and supported by international publications related to the forecast of global LNG supply-demand. also will be a deficit from 2023-2024.

"With the commitment of the domestic market and industry, we must make future projections so that gas supply will continue for generation and other industries," said Nicke.

    In addition, the development of gas infrastructure, both midstream and downstream, must be carried out. Even the gas needs for refineries, referring to Pertamina's data, show that the company only has a commitment to supply LNG until 2023. In fact, Pertamina needs a guarantee of gas supply certainty for all refinery projects to meet the requirements of the project lenders. 

    According to Nicke, his party has sent a letter to the Ministry of Energy and Mineral Resources asking for gas allocation for these refinery projects. At the same time, to mitigate risks, his party is also building infrastructure so that refineries can get LNG.

"Discussions have been carried out, with SKK Migas as well. There is a commitment from natural gas, to ensure continuity of supply, we are building LNG infrastructure as well, "said Nicke.

Investor Daily, Page-10, Thursday, Feb 11, 2021

Pertamina EP Sangatta well reaches production of 415 BPH

 

    PT Pertamina EP Asset 5 Sangatta Field (PEP) recorded oil production of 415 barrels per day (bpd) from the ST-200 well at the end of drilling on January 30, 2021. This product is three times higher than the predicted figure from the well as of December 28. 2020.

    Sangatta Field Manager Hanif Setiawan said the successful production of the ST-200 well is the hard work of various parties that work together between PEP Sangatta, partners, PDSI, local government, and community members.

"The success of the ST-200 is proof that the synergy between lines including with stakeholders and running an unusual business operation by adapting a pandemic situation through a good COVID-19 protocol not only provides additional oil and gas production but more than that safety and health is maintained. , "said Hanif.

    Drilling of the ST-200 well located in Topo Indah Hamlet, Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency is carried out to a final depth of 2,203 meters Measure Depth (mMD) /2,076 meters True Vertical Depth (mTVD). Drilling uses rig 22.2 / OW700-M owned by Pertamina Drilling Services Indonesia (PDSI).

    PEP Sangatta continues to make the best efforts in the Well drilling process by maintaining strict health protocols from the start of preparation until drilling is carried out. The crew involved in this drilling has passed the COVID-19 health protocol screening implemented at Pertamina EP (PEP) and the local government.

    The HSSE aspect remains a full concern during the drilling process of the ST-200 well. HSSE aspects are ensured to be fulfilled for the safety and security of all parties involved. PEP Sangatta will continue to maintain and increase production through further Well drilling. 

    As a form of gratitude for the achievement of the ST-200 well drilling, PEP Sangatta distributed groceries to the people of RT 01 and RT 02 of Topo Indah Hamlet, Sangatta Selatan Village, and renovated one of the prayer rooms not far from the drilling location.

   The Head of Topo Indah Hamlet, Sulaiman expressed his gratitude to PEP Sangatta because, in addition to the residents getting assistance, some residents are also involved as drilling workers, both skilled and non-skill.

"Hopefully this Wells drilling and beyond will be successful and bring blessings. Pertamina Jaya !, "said Sulaiman.

Blogger Agus Purnomo in SKK Migas

    As a subsidiary of PT Pertamina (Persero) as well as a cooperation contract contractor (KKKS) operating under the supervision of SKK Migas, PEP is committed to meeting the country's energy needs through the management of oil and gas fields in various regions, one of which is Kalimantan. PEP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the plan for reworking the wells for 2021 drilling 18 development wells and five well rework plans.

    This activity is carried out to support SKK Migas' ideals of realizing 1 million bpd of oil production and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas Integrated Operating System (SOT) report dated February 4, 2021, year-to-date, PEP Asset 5 able to carve crude oil production from Kalimantan amounting to 16,172 bpd. 

Sanga-sanga Block

    Meanwhile, gas production is around 15.44 million standard cubic feet per day. This production is supported by five oil and gas fields, namely Sangatta and Sangasanga (East Kalimantan), Tarakan and Bunyu (North Kalimantan), and Tanjung (South Kalimantan and Central Kalimantan). Sangatta Field throughout 2020 recorded an oil lifting of 696,065 barrels of oil or 101% of the target. Production was recorded at 682,734 barrels of oil or 110% of the target.

Investor Daily, Page-10, Tuesday, Feb 9, 2021

WORKING TO MAINTAIN THE PRODUCTION OF THE CEPU BLOCK

    The cooperation contract contractor who holds the participation right in the Cepu Working Area is racking his brain to reduce the rate of natural production decline in the block which accounts for about 30% of the national oil.

PT Pertamina EP Cepu (PEPC)

    Meanwhile, the participating shareholders in the Cepu Block are divided into seven companies, namely PT Pertamina EP Cepu (PEPC) with a 45% share, ExxonMobil Cepu Ltd (EMCL) 20.5%, 

ExxonMobil Cepu Ltd (EMCL)

    Ampolex. (Cepu) Pte. Ltd. 24.5%, PT Sarana Patra Hulu Cepu 1.09%, PT Asri Dharma Sejahtera 4.48%, PT Blora Patragas Hulu 2.18%, and PT Petrogras Jatim Utama Cendana 2.24%.

    President Director of Pertamina EP Cepu Awang Lazuardi said that in connection with the potential decline in production after reaching the peak period this year, his party will coordinate intensively with a number of partners. According to him, Pertamina EP Cepu will actively communicate with ExxonMobil Cepu as the operator of the Banyu Urip and Kedung Keris fields, as well as other participating rights holders.

PT Pertamina Hulu Energi (PHE)

    In addition, together with PT Pertamina Hulu Energi (PHE) as the company's sub-holding and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), his party will compile further strategic steps. Meanwhile, a number of work plans that are being and will continue to be carried out include maintaining reservoir pressure, well intervention/services, and preventive maintenance.

Blogger Agus Purnomo in SKK Migas

"Coordination with EMCL [Exxonmobil], our partners, and SKK Migas will continue to be carried out in compiling a work plan and execution," he said.

    Previously, Exxonmobil was exploring all options to optimize production in the Cepu Block, which has entered its peak period. Azi N. Alam, Vice President of Public and Government Affairs of ExxonMobil Indonesia, said that the company continues to explore various options to optimize the production of the Cepu Block safely and reliably.

"As the backbone of national oil production, we hope to produce more than double the initial expectations," he said.

    Based on the results of Exxonmobil's technical study, Azi explained that the recoverable reserve of the Banyu Urip Field has more than doubled from the initial plan of development (PoD) of 450 million barrels of oil to 940 million barrels of oil. According to Banyu Urip's PoD, the peak production period is estimated to be around 2 years with an average annual production of 165,000 barrels of oil per day. However, since the full facility start-up, ExxonMobil has been producing up to 225,000 barrels of oil per day for about 5 years.

    Production had increased by about 30% from the initial POD and peak production was 3 years longer than originally estimated. However, due to the natural characteristics of the reservoir, which is common throughout the world, ExxonMobil predicts Banyu Urip oil production will decline.

“Despite our continued efforts to optimize production, we have maintained outstanding safety and reliability performance as well cost-effective operation, "he explained.

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said that the Cepu WK has a big role and contribution to the achievement of national oil and gas, including the production target of 1 million barrels of oil per day.

"The 2021 target for the Cepu Block working area will produce 219,860 barrels of oil per day and 55.16 MMscfd of gas," he said.

    Regarding the production target of 1 million barrels of oil per day, the government still needs to find an additional 350,000 barrels per day within 9 years. Member of Commission VII in the energy sector of the House of Representatives, Kardaya Warnika, said that the current condition in increasing domestic oil and gas production is the provision of incentives. The government is selling out incentives to contractors to spur exploration activities which he calls suspended animation.

"Given any incentives, but the legal certainty is not yet, investors are still in doubt," he said.

    Oil and gas practitioner Widyawan Prawira Atmaja said that the revision of the Oil and Gas Law, which has stopped for almost 9 years, is now crucial. He also urged Commission VII on the energy sector of the House of Representatives to immediately finalize the law to improve the domestic oil and gas investment climate. Energy Watch Executive Director Mamit Setiawan assessed that to achieve this vision one of the biggest obstacles is legal certainty.

    According to him, the certainty of new regulations is one of the key investments expected by oil and gas investors. In addition, the form of SKK Migas which is only issued through a Presidential Regulation is considered to provide uncertainty to investors.

SANGATTA OIL FIELD

    In another development, PT Pertamina EP Asset 5 Sangatta Field recorded oil production of 415 barrels per day from the ST-200 well. The record has tripled compared to production in December 2020.

    Hanif Setiawan, Sangatta Field Manager, said that the increase in production was an effort made between Pertamina EP Sangatta, Pertamina Drilling Service Indonesia, and the local government.

"The success of the ST-200 is proof that by synergizing between lines and running an unusual business operation by adapting to a pandemic situation, not only does it provide additional oil and gas production, but more than that, safety and health are maintained," he said.

    Drilling of the ST-200 well located in Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency, is carried out to a final depth of 2,203 meters measured depth (mMD) or 2,076 meters true vertical depth (mTVD). Pertamina EP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the Wells work plan for 2021.

    For Sangatta Block, 18 development wells will be drilled and five well work plans will be carried out. This activity is expected to contribute to efforts to produce 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas integrated operating system report on February 4, 2021, on a year-to-date basis, PEP Asset 5 is able to record Crude oil production from Kalimantan is 16,172 barrels per day.

    Meanwhile, for gas, production is around 15.44 MMscfd. This production is supported by five oil and gas fields, namely Sangatta and Sangasanga (East Kalimantan), Tarakan and Bunyu (North Kalimantan), and Tanjung (South Kalimantan and Central Kalimantan).

"For Sangatta Field, during 2020, oil lifting recorded as much as 696,065 barrels or 101% of the target. Production was recorded at 682,734 barrels or 110% of the target, "said Hanif.

Bisnis Indonesia, Page-19, Tuesday, Feb 9, 2021

Exxon Mobil Optimizes Cepu Block Oil Production

 

Exxon Mobil Cepu Limited (EMCL) continues to strive to optimize Cepu Block oil production in the future. On the other hand, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) projects that Cepu Block production will naturally start to decline in 2022 if there is no effort whatsoever.

Blogger Agus Purnomo in SKK Migas

Vice President of Public and Government Affairs ExxonMobil Indonesia Azi N Alam said, referring to the Banyu Urip block's plan of development / POD, the peak production period of around 165 thousand barrels per day (BPD) is estimated to last about two years. 

Exxon Mobil Cepu Limited (EMCL)

    However, his party has reached production of up to 225 thousand BPD in about five years. This means that the Cepu Block has reached 30% higher production and is three years longer than the original plan. However, like the natural characteristics of reservoirs around the world, he did not deny that Banyu Urip Field production would decline.

Banyu Urip Field ExxonMobil

"But Exxon Mobil continues to explore options to optimize the production of the Cepu Block safely and reliably, together with SKK Migas and our partners," said Azi.

Azi explained that Banyu Urip is a world-class productive resource. Based on the results of a technical study, Banyu Urip's recoverable reserve has more than doubled from the initial POD of 450 million barrels of oil to 940 million barrels. By early 2021, Banyu Urip has exceeded its original POD commitment by producing more than 450 million barrels since January 2016.

“This achievement is a testament to ExxonMobil's world-class project design and management, safe operation, and prudent reservoir management. As the backbone of national oil production, we expect to produce more than double our initial expectations. This is certainly very beneficial for all stakeholders, "he explained.

Dwi Soetjipto

Head of SKK Migas Dwi Soetjipto said this year Cepu Block production is targeted to reach 219.86 thousand BPD for oil and 55.16 million standard cubic feet per day / MMscfd for gas. The amount of oil production is equivalent to 30% of the national oil production this year. The production of the Cepu Block will gradually decrease starting in 2022.

"So we focus on how to maintain the natural decline in the Cepu and Mahakam blocks. In the Cepu Block, the amount of gas is starting to increase, ”he said.

Several strategies are being prepared to hold the Cepu Block production, namely good reservoir management, monetization of untreated gas, optimization of field development and drilling, and development of clastic formations.

"Apart from that, the development of surrounding fields, such as Cendana and Alas Tua," said Dwi.

Previously, in December 2019, Exxon Mobil operated the Kedung Keris Field which supported the production of the Cepu Block. The field can produce up to 10 thousand BPD of oil, while the reserves reach 20 million barrels of oil.

Investor Daily, Page-10, Monday, Feb 8, 2021

Additional Key Incentives to Reach the Target of 1 Million BPD

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the success of achieving the target of 1 million barrels per day (BPD) in 2030 depends on additional incentives from the government. 

Blogger Agus Purnomo in SKK Migas

    Without additional incentives, oil production will only be around 500 thousand BPD in 2030.

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said, referring to Wood Mackenzie, Indonesia's oil and gas prospectivity rating is still very good, although a bit low. However, based on IHS Markit's research, the country's risk rating and the national fiscal system are considered to continue to decline from year to year. With the potential for oil and gas, this fiscal improvement is the key for Indonesia to work on its oil and gas prospects. Moreover, oil production has continued to decline over the last 20 years.

"So far, it is known that we have 128 basins and only 20 basins are producing. "This should be our concern whether we will just accept the decline," he said in a meeting with Commission VII on the energy sector of the House of Representatives.

    He explained, according to the projections prepared by his party, oil production could be increased to 1 million BPD in 2030 if there were flexible and competitive incentives provided. On the other hand, without incentives, the projection results show that national oil production will only reach the range of 500 thousand BPD in 2030. The same thing he said applies to gas production, although the conditions are better. Without incentives, national gas production is relatively stable in the range of 6 billion standard cubic feet per day / BSCFD until 2030. However, if you want this gas production to increase, incentives are still needed.

"Providing flexible, competitive, and case-by-case incentives does not eliminate the obligation to seek massive potential, implement aggressive and efficient work programs, and run other enablers such as completing permits, land, and others," Dwi said.

    He added that the government is committed to improving the national oil and gas investment climate, including the provision of incentives for oil and gas companies. In fact, the meeting related to this matter was directly chaired by the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif.

"There are currently intense discussions led by the Minister of Energy and Mineral Resources about this incentive and how to make Indonesia's upstream oil and gas investment increase or have a strong appeal higher than other countries, "he said.

    So far, several improvements have been made to encourage oil and gas exploration. In detail, the availability of subsurface data, data openness, promotion of potential areas through roadshow investors and virtual data rooms which are still in preparation, as well as exploration funding from a firm work commitment (COW) of US $ 1.7 billion and the transfer of the remaining KKP for open area exploration.

    Meanwhile, to maintain the economy of the oil and gas project, Dwi revealed, there are several incentives that have been implemented. First, the elimination of Liquefied natural gas / LNG State Revenue Tax according to Government Regulation number 48 of 2020. Furthermore, the elimination of the cost of utilizing state property in accordance with the Minister of Finance Regulation number 140 of 2020.

"Then fiscal flexibility through investment incentives such as full price DMO, accelerated depreciation and split changes, so far have been given to the Mahakam Block, South Natuna Sea B, and Sanga-Sanga," he explained.

    Meanwhile, the incentives that are still under discussion are postponement or reduction of indirect taxes of up to 100%, elimination of costs for utilization of the Badak LNG Plant, tax holidays for income tax (PPh), assume and discharge, and tax allowances, as well as support for upstream oil and gas supporting industries.

Strong Planning

    Member of Commission VII in the energy sector of the Indonesian House of Representatives, Maman Abdurrahman, stated that Commission VII fully supports SKK Migas, which has set a production target of 1 million BPD in 2030. However, his party reminded SKK Migas to seriously work on this target. Moreover, in the last four years, the national oil production has not increased.

"Our national oil production greatly affects our macro assumptions. I am only one, I see a downward trend in production, that the planning team must really pay attention to. We don't want to be just lip service. So, the planning team must be strengthened, "he said.

    According to the Deputy Chairperson of Commission VII in the energy sector of the Indonesian House of Representatives Ramson Siagian, in the last three years, the realization of national oil production has always missed planned by SKK Migas. In view of this, he assesses that the target of 1 million BPD seems unrealistic. For that, planning at SKK Migas must be strengthened.

"This is like wishful thinking, unrealistic. I see a reliable Enhanced Oil Recovery, not new exploration, ”said Ramson.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Tutuka Ariadji, previously said that a production target of 1 million BPD of oil and 12 BSCFD of gas is needed to ensure energy supply in the future. This target setting refers to national energy needs. Although at the same time the government is also encouraging the development of the electric vehicle ecosystem, this does not mean that the two targets are in conflict. Moreover, the transition to electric vehicles cannot occur significantly in a short period of time.

"Currently, our oil needs are around 1.6 million BPD, production 700 thousand BPD. We even produce up to 1 million BPD, still not a lot. Even electric cars cannot suddenly develop a large amount, "he said.

Investor Daily, Page-10, Monday, Feb 8, 2021

SKK Migas Records EOR Commitment of US $ 446 Million

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted a commitment to implementing Enhanced Oil Recovery (EOR) activities of up to the US $ 446 million. 

Blogger Agus Purnomo in SKK Migas

    EOR activities, especially in the Rokan Block, will support the achievement of the oil production target of 1 million barrels per day (BPD) by 2030.

    EOR is an advanced oil recovery method by adding energy in the form of special material or fluid that is not contained in an oil reservoir. Generally, EOR is applied to fields that have long been produced (mature fields) with the aim of extracting remaining oil that cannot be produced by primary and secondary recovery methods (water flooding).

    Some of the most widely known EOR techniques today are injection steam flooding, chemical flooding, and gas flooding. 

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said the EOR activities to be carried out were water injection and chemical injection. To date, his party has recorded 23 EOR projects using polymers or surfactants which will operate until 2030.

"The firm work commitment (KKP) for EOR to date totals the US $ 466 million," he said.

    Of the 23 EOR projects, his party will focus on its implementation in the Rokan Block. 

the Rokan Block Chevron

    In blocks whose management will shift to Pertamina in August 2021, his party will re-evaluate the existing plan of development / POD and steam injection projects such as in North Duri Development (NDD) 14, Duri Ring, and others. In addition, his party will encourage the completion of Chemical EOR Phase-1 at Minas Field in early 2022.

"The Minas field is the main support for the EOR strategy with an additional production of around 52 thousand BPD in 2030," said Dwi.

    Regarding the progress of EOR implementation, 23 fields are still in the study stage. Meanwhile, one field is currently working on field trials and one field is being discussed on POD. Of the 23 EOR projects, most of them were Pertamina Group projects.

    In details, PT Pertamina Hulu Rokan (PHR) will carry out 7 EOR projects, PT Pertamina EP 2 projects, PT Pertamina Ogan Komering 2 projects, PT Pertamina Hulu Energi Noth West Java (ONWJ) 2 projects, PT Pertamina Hulu Offshore South East Sumatra (OSES) 2 projects , PT Pertamina Hulu Energi Siak 1 project, PT Pertamina Hulu Mahakam 1 project, and PT Pertamina Hulu Energi Tuban 1 project. In addition, BOB Bumi Siak Pusako will work on 1 EOR project, PT Energi Mega Persada (EMP) 1 project, Medco EP Indonesia 1 project, and 1 Petrogas project.

    Referring to SKK Migas data, the schedule for implementing one field (full field) for these EOR projects is Minas and Batang in 2024, Bekasap and E-main in 2025, Zulu in 2026, Tanjung, Rama, and Handil in 2027, Pedada, Sukowati, Gemah, Melibur, and Walio in 2028, Duri Ring, Bekasap, Kulin, Balam South, Bangko, and Kaji Harapan in 2029, as well as Air Serdang, Guruh, Krisna, and Mudi in 2030.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Tutuka Ariadji, said that the application of EOR technology is not easy. In order for this EOR project to run smoothly in the long term, a strong research and development institution is needed to support it.

"Backing up research and development is absolute. If there are strong research and development, we can monitor oil and gas production. The oil and gas industry needs technology and competent people. There is no compromise on that, "he said.

    Meanwhile, Ronald Gunawan, Director of the Indonesia Petroleum Association (IPA), said that EOR activities are difficult to carry out under current conditions. This is because, with the current oil price conditions, the project is not economical when referring to the current fiscal scheme in Indonesia. If it is economical, oil and gas companies will certainly do it and boost oil production as much as possible.

Investor Daily, Page-9, Saturday, Feb 6, 2021

Mudi-26 Field Increases PHE TEJ Production in Tuban

    Pertamina Hulu Energi Tuban East Java (PHE TEJ), continues to carry out its commitment to maintaining the country's energy security. One of them is the successful implementation of the Mudi-26 Well Drilling. 

Pertamina Hulu Energi Tuban East Java (PHE TEJ)

    The Mudi-26 Well Drilling was able to record production test results of 531 Barrel Oil Per Day (BOPD) This figure exceeds the initial target of 200 BOPD, thus increasing the production increase from the Mudi field in Tuban Block.

"The success of drilling the Mudi-26 well is one of the fulfillment of a definite commitment, the Mudi-26 infill well was drilled with a depth of 3,005 meters. This drilling takes 73 days of drilling and 12 days of completion, "said the acting General Manager of TEJ's PHE Riko Meidiya Putra.

    Riko explained that the Mudi-26 well was successfully produced in the Tuban Carbonate Formation layer. Apart from exceeding the production target, this well will also increase the oil and gas reserves of the Tuban Block in East Java and open up new opportunities for wells in the Mudi field.

"We express our deepest gratitude to all parties who have supported the success of drilling the Mudi-26 well. I hope that in the future PHE TEJ production will continue to increase so that it can participate in supporting the target of achieving national energy production," said Riko.

PetroChina

    Riko conveyed that the success of drilling the Mudi-26 well proves PHE Tuban East Java officers' ability to increase Mudi field production after the transition from the previous operator, namely, Joint Operating Body Pertamina PetroChina East Java (JOB-PPEJ). Additional production from Mudi-26 well is 531 BOPD brings the total production of PHE Tuban East Java oil to 1731 BOPD.

"This success is due to solid teamwork and prayers and support from all internal and external parties. Meanwhile, the Field Manager of PHE TEJ Taryono said that the Mudi-26 well drilling was successfully carried out by applying superior HSSE with zero LTI, zero TRIR, and no environmental issue results.

"PHE TEJ is a subsidiary of PT Pertamina Hulu Energi (PHE) which is engaged in the upstream oil and gas business in the Tuban Work Area (WA). PHE TEJ is officially 100 percent managed by PHE using a production sharing contract or gross split covering 4 Field Areas, namely Mudi, Lengowangi, South Bungoh, and Bogomiring Field Areas, "he said.

Harian Bangsa, Page-9, Friday, Feb 5, 2021

Pertamina Hulu Mahakam-Apexindo Signed US $ 68 Million Contract

 

PT Pertamina Hulu Mahakam (PHM) as the operator in the Mahakam Working Area (WA), with the support of SKK Migas and PT Pertamina Hulu Indonesia (PHI), announced the award of the Drilling Submersible Swamp Barge Services (Swamp Rig) contract to PT Apexindo Pratama Duta, Tbk, valued at the US $ 68 million.

Chalid Said Salim

    The signing of the swamp rig procurement contract was carried out online in Jakarta, on Thursday (4/2) by the Managing Director of PHI as the Proxy of the Managing Director of PHM Chalid Said Salim and the President Director of PT Apexindo Pratama Duta Tbk Zainal Abidinsyah Siregar. Also watching SKK Migas' Head of Goods and Services Procurement Management Division Erwin Suryadi, PHM General Manager Agus Amperianto, along with PHI and PHM management ranks.

Agus Amperianto

PHM General Manager, Agus Amperianto explained, Rig Yani will be brought to Mahakam Working Area to replace Rig Raisis in the second quarter of 2021 and support drilling operations in the Tambora, Tunu, and Handil fields. Agus hopes that Apexindo will take an active role in proposing efficiency programs.

"The development of various innovations for the optimization of operations will greatly support the Locomotive-8 program, for the continued production and development of the Mahakam Working Area," he said.

the Mahakam Work Area 

Through the Locomotive-8 program (Low Operation Cost of Mahakam to Achieve Effectiveness and Efficiencies - 8), PHM launched an integrated effort to optimize costs in all operating activities based on innovation and synergy, the goal is to maintain economics and sustainability in the Mahakam Working Area fields. who is already in the natural decline phase?

In his speech, Chalid Said Salim said that the signing of this contract is a form of Pertamina's commitment to maintaining production levels in the Mahakam Working Area.

"This signing is a manifestation of Pertamina's efforts to maintain national energy security, considering that this contract is an important part of oil and gas production activities at Mahakam Work Area," he said.

The contract value reaches US $ 68 million, has a duration of 1.5 years (with an option to extend 1 + 1 year), and has a commitment to the Domestic Content Level (TKDN) of 60.01%. 

    

Blogger Agus Purnomo in SKK Migas

    Head of the SKK Migas Goods and Services Procurement Management Division, Erwin Suryadi, said that SKK Migas welcomed the signing of this rig procurement contract.

"The signing of this contract shows PHM's determination to continue to maintain production levels in the Mahakam Working Area, this effort is also part of the efforts of SKK Migas and Cooperation Contract Contractors (KKKS) to achieve the production target of 1 million barrels of oil per day (BOPD) and gas. billion standard cubic feet per day (BSCFD) by 2030, "he said.

"To keep 2021 production from decreasing, SKK Migas and KKKS will increase the number of development well drilling activities by 616 wells, or an increase.

144 percent compared to 2020's realization of 252 wells. Mahakam Working Area is one of the backbones of the national upstream oil and gas production in 2021 and towards the 2030 target, "said Erwin.

"SKK Migas encourages that in implementing this contract PHM uses domestic labor and raw materials so that local content can exceed the target set.

It is hoped that this contract will have multiple effects on service providers and national workers, including the empowerment and fostering of local SMEs around the area of ​​operation, "said Erwin.

As is known, to restrain the rate of decline in production in the Mahakam Working Area, which is already in a natural decline phase, throughout 2021 PHM will drill 73 development wells and 2 exploration wells and work on 4,150 wells intervention/service jobs. 

    PHM targets production in 2021, as follows: gas 485 mmscfd (wellhead) and liquid (oil and condensate) 22 KBOD. In 2020 PHM produces gas as much as 605.76 mmscfd (wellhead) or 3% higher than the 2020 WP&B target, which is 590.35 mmscfd, and liquid as much as 29.51 KBOD or 4% higher than the WP&B 2020 target of 28.43 KBPD

Investor Daily, Page-10, Friday, Feb 5, 2021