Chevron Must Immediately Ensure Rokan's Power Supply

    Chevron Standard Ltd (CSL), an affiliated company with PT Chevron Pacific Indonesia (CPI), was asked to immediately conclude negotiations with PT Perusahaan Listrik Negara (PLN) regarding the issue of electricity supply in the Rokan Block, Riau, which will begin to be transferred from PT CPI to PT Pertamina. Hulu Rokan in August 2021. This is important to maintain oil and gas production in the block.

PT Chevron Pacific Indonesia (CPI)

    The Executive Director of the ReforMiner Institute, Komaidi Notonegoro, believes that the continuation of the management of the North Duri Cogeneration (NDC) PLTGU should be completed immediately to ensure the continuation of the management of the Rokan Block. If the government encourages the synergy of SOEs between Pertamina and PLN, that's good.

the Rokan Block

"But what is more important than that is the certainty of the sustainability of the electricity supply for the Rokan Block," he said.

    The owner of the PLTGU is PT Mandau Cipta Tenaga Nusantara (MCTN). As much as 95% of MCTN's shares are controlled by CSL and the rest by local companies. CSL is said to be auctioning off the management of the NDC PLTGU. Several participants reportedly withdrew because the price was considered too expensive, namely US $ 300 million, especially since Chevron has benefited for more than 20 years from operating the plant.

    On the other hand, Pertamina and PLN are known to have communicated the supply of electricity and steam in the Rokan Block in March 2020. On February 1, 2021, the two companies signed the Electricity and Steam Sales and Purchase Agreement (PJBTLU) which will be effective in August 2021, along with the end of the management. Rokan Block by PT Chevron Pacific Indonesia (CPI).

    The actual electricity demand for the Rokan Block is 400 megawatts and 355 MBSPD of steam. PLTGU NDC will only be used for three years in line with the commitment and willingness of PLN to supply electricity to the Rokan Block through the Sumatra interconnection. 

    The clarity of electricity supply from the NDC PLTGU will encourage oil production from the Rokan Block to persist, at least not to drop drastically. Based on data from SKK Migas, until the first quarter of 2021 oil production from the Rokan Block averaged 162,951 barrels per day (BPD), down from the realization in the first quarter of 2020 which was recorded at 174,424 bpd.

According to Komaidi, the electricity supply for the Rokan Block that has been going on so far must use the basis and agreement between the parties. In the agreement, of course, it must be conveyed to the public how the rights and obligations of the parties after the Rokan Block concession contract are transferred from the old manager to the new manager.

"The parties must of course refer to the terms and agreements that have been made previously," he said.

Blogger Agus Purnom In SKK Migas

    Deputy Head of SKK Migas Fataryani Abdurrahman said electricity and steam are the backbones of operations in the Rokan Block. The North Duri Cogeneration PLTGU was designed in the 90s to implement Steamflood Enhanced Oil Recovery (EOR) technology which requires a large electricity supply. He said SKK Migas had sent a letter to CPI regarding the power plant in Rokan.

"The power plant was built on state-owned land, which was previously agreed upon by a third party," he said.

    PLN's Director of Commerce and Customer Management, Bob Saril, previously explained that in PLN's plan the electricity and steam needs for the Rokan Block were divided into two stages. First, the transition period (2021-2024) utilizes the existing supply with the most cost-efficient PLTG NDC acquisition scheme. 

    This is done because the connection of the Rokan Block electricity system to the PLN system only takes three years to develop. Second, the permanent period (2024-ff), electricity will be supplied in total from the Sumatra System and steam will be supplied with the construction of a more reliable Steam Generator.

 Investor Daily, Page-10, Monday, May 24, 2021

Urgent Generating Certainty

    The certainty of electricity supply in the Rokan Block, which will soon be transferred in August, needs to be decided to ensure operational activities in the working area.

    Komaidi Notonegoro, Executive Director of the ReforMiner Institute Komaidi Notonegoro, said that Chevron needed to immediately conclude negotiations with PT PLN (Persero). According to him, the impact will be very positive if there is a synergy of SOEs there.

the Rokan Block

"What is more important than that is the certainty of the sustainability of electricity supply for the Rokan Block," He said.

    Meanwhile, currently, the owner of the PLTGU in the Rokan Block is PT Mandau Cipta Tenaga Nusantara (MCTN). Chevron Standard Ltd owns 95% of MCTN's shares. (CSL) and the rest by local companies.

    On the other hand, PT Pertamina (Persero) and PLN have communicated the supply of electricity and steam in the Rokan Block in March 2020. On February 1, 2021, the two companies signed a power and steam sale and purchase agreement (PJBTLU) which will be effective in August 2021.

Blogger Agus Purnomo in SKK Migas

    Meanwhile, Deputy Head of SKK Migas Fatar Yani Abdurrahman assessed that electricity and steam are the backbones of operations in the Rokan Block.

    He said SKK Migas had sent a letter to PT Chevron Pacific Indonesia (CPI) regarding the continuation of the power plant in Rokan.

PT Chevron Pacific Indonesia (CPI)

    Previously, Director of Commerce and Customer Management of PT PLN (Persero) Bob Saril said his party had signed an MoU for the supply of electricity and steam with Pertamina Hulu Rokan which was effective in August 2021.

    Bob explained that in supplying electricity and steam for the Rokan Block, PLN divided it into two stages, namely the transition period and the permanent period. The transition period will last for 3 years starting from August 2021 to August 2024.

"During this transition period, PLN will manage existing power plants which currently electrify the Rokan working area," he explained.

    Meanwhile, permanent services will be provided starting August 8, 2024, namely by interconnecting the electricity system in the Rokan working area with the interconnection of the Sumatran electricity system.

"In the permanent period, the Rokan Block will be supplied from the Sumatran interconnection electricity system and steam will be supplied with the construction of a more reliable steam generator," he said.

Bisnis Indonesia, Page-4, Monday, May 24, 2021

Strong Momentum to Stimulate Investment

    The warming of world oil prices in recent weeks is believed to be able to increase the enthusiasm of the oil and gas industry in the country, which had dimmed due to the Covid-19 pandemic.

Blogger Agus Purnomo in SKK Migas

    Head of Program and Communication Division of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Susana Kurniasih said the increase in oil prices would improve the domestic investment climate.

"SKK Migas continues to coordinate with KKKS to support investment realization," Susana Kurniasih said.

    She continued that the upstream oil and gas industry has a high risk so that every project activity is carried out based on predictions of sufficient oil prices.

    According to her, although oil prices have crawled up until now Indonesia's upstream oil and gas work plan is still running in accordance with the 2021 work program & budget (WP&B).

"If there are KKKS on the way to add investment activities even though they are not in the WP&B that year, SKK Migas will facilitate it," She said.

    Based on the 2021 WP&B, the G&G study is targeted at 116 activities. The 2D seismic survey is targeted to be 4,569 kilometers (km), while the 3D seismic survey is targeted to be carried out along 1,549 km.

    Meanwhile, exploration well drilling is targeted at 48 wells, and development well drilling is targeted at 616 wells. Workover activities throughout this year will be carried out as many as 615 wells and followed by well service activities as many as 26,431 activities.

    Susana said that until May 2021, domestic upstream oil and gas investment is still running according to the target and there has been no increase.

"The realization is at US$3.11 billion, still on the track," She explained.

NOT SIGNIFICANT

    Meanwhile, the founder of the Reforminer Institute, Pri Agung Rakhmanto, said that basically, the scale for the amount of investment from upstream oil and gas actors in the country is limited, namely that the majority of the investment disbursed is only about maintaining existing production.

    The unfriendly upstream oil and gas investment climate in Indonesia has made investors reluctant to disburse their funds to start new upstream oil and gas projects in Indonesia.

"The investment surge will only exist if for example there is a large-scale exploration or a large-scale project. If there is nothing new and the scale is not large, it is only about maintaining the lifting level, so it will dwell on the current figures," he told Business.

    The Executive Director of Energy Watch Mamit assessed that investors are still waiting for developments from the movement of world oil prices to a stable position. According to him, investors still believe that the increase in oil prices is temporary.

    Global economic growth with the current vaccination program is still not optimal. A large number of second and third waves of Covid-19 in several countries with high energy consumption is one of the causes.

"In addition, national economic conditions have not yet grown and there are still domestic restrictions that affect investors more or less. The licensing process, procurement of goods, transportation is still not optimal because this pandemic affects activities in our upstream oil and gas sector," he explained.

BP Indonesia

    Meanwhile, the government's efforts to boost oil and gas investment are actually starting to bear fruit. One of them is from BP Indonesia which increased its investment value by US$4 billion to increase Tangguh reserves in Papua.

    Head of SKK Migas Dwi Soetjipto said BP management said it would increase investment in Indonesia through development in the Ubadari Field and carbon capture, utilization, and storage (CCUS).

"We welcome it because it means that the efforts made by SKK Migas and the government to increase investment are paying off," he explained.

    Dwi hopes that BP's steps to increase this investment will soon be followed by other contractors, especially since world oil prices will continue to improve.

"The situation of world oil prices recovering faster, even exceeding the average world oil price in 2019, is expected to encourage KKKS to increase exploration activities outside the program agreed in the 2021 work program and budget," he said.

Bisnis Indonesia, Page-4, Wednesday, May 19, 2021

Transfer to Manage Block Rokan Still Rolling

Three months before the end of the Production Sharing Contract / PSC of PT Chevron Pacific Indonesia (CPI) in the Rokan Block, the process of transferring the management of this block to PT Pertamina (Persero) is still ongoing. Chevron stated that the transfer of Kelola shows significant progress in maintaining the continuity of operations and production of the Rokan Block after 9 August.

Chevron Pacific Indonesia (CPI)

Managing Director of Chevron Indo Asia Business Unit and President Director of CPI, Albert Simanjuntak, said that his party continues to work so that the termination and transition process can be reliable and smooth. This is because the Rokan Block is a strategic asset that is important for state and regional revenues, the community's economy, and national energy security.

The main aspects of the termination process are the termination checklist according to government regulations, asset reporting, and project report closure. As for the transition process, its main aspects include drilling programs, information technology, data migration, management of goods and services contracts, operational procedures and work permits, human resources (HR), and others.

"Progress from these main aspects is very significant and is expected to be complete before the transfer of management later," said Albert.

For the termination process, Chevron has completed the PSC provisional checklist termination document on February 25, 2021. Then the asset reporting has reached 81%, where about 109 thousand assets have been physically inspected and reported. Meanwhile, the closure of project reports reached 70% or around 2940 reports that have been completed.

As part of monitoring, the process of verification and validation (V&V) of exploration and exploitation data of the Rokan Block is currently underway by the Center for Data and Information Technology (Pusdatin) of the Ministry of Energy and Mineral Resources and SKK Migas. 

Blogger Agus Purnomo in SKK Migas

    The V&V process was carried out on approximately one million items of printed documents, magnetic and optical media, and rock samples. The process is expected to be completed this May. CPI also seeks to ensure the readiness of its employees.

"Blok Rokan's performance is solid as long as it is due to the human resource factor behind it, namely employees with built-in expertise, culture, and work ethic. We are optimistic that they will be able to maintain the performance of the Rokan Block and can contribute significantly to new companies, "said Albert.

Chevron has submitted all personnel and organizational data to SKK Migas. With the transfer of management of the Rokan Block, almost all employees of PT CPI will switch their employment status to the new operator. Parallel Well Drilling, the drilling program in the Rokan Block is ongoing to maintain production levels. Since its inception in late December 2020, to date, Chevron has successfully drilled 55 wells, including 11 conversion wells, by operating six drilling rigs and one conversion rig.

the Rokan Block by Chevron

The procurement process for additional rigs is ongoing to meet the target of drilling 192 wells in the Rokan Block by CPI and PT Pertamina Hulu Rokan (PHR) this year.

"We continue to coordinate intensively with SKK Migas and PT Pertamina Hulu Rokan (PHR so that the drilling program can proceed as expected. The collaboration is very solid because all parties share the same passion and commitment, ”said Albert.

The Rokan Block is one of the largest oil and gas blocks in Indonesia. However, the production of this oil and gas block continues to decline over time. Referring to SKK Migas data, in 2011, the Rokan Block still produced oil at around 356.98 thousand BPD or contributed 39.56% of the total national oil production at that time at 902.35 BPD. 

    However, referring to SKK Migas data, last year, oil lifting in this block was only 174,424 BPD or 24.62% of the total national oil lifting of 708,488 BPD. In 2021, the Rokan Block is targeted to produce oil of 165,002 BPD.

Investor Daily, Page-10, Tuesday, May 18, 2021

Drilling for the Rokan block continues

 

    PT Chevron Pacific Indonesia and PT Pertamina Hulu Rokan (PHR) continue to target drilling 192 wells in Block Rokan Riau this year.

PT Chevron Pacific Indonesia

    In particular, PT Chevron Pacific Indonesia (CPI) has drilled 55 wells in the production rate containment activities in the Rokan Block which will be transferred to PT Pertamina Hulu Rokan (PHR) in August 2021.

    Managing Director of Chevron Indo Asia Business Unit & President Director of PT Chevron Pacific Indonesia Albert Simanjuntak explained that the drilling program in the Rokan Block is continuing to maintain production levels.

    Since starting at the end of December 2020, according to him, PT CPI has successfully drilled 55 wells, including 11 conversion wells, by operating six drilling rigs and one conversion rig.

    The process of procuring additional rigs is underway to meet the target of drilling 192 wells in the Rokan Block by 2021.

Blogger Agus Purnomo in SKK Migas

"We continue to coordinate intensively with SKK Migas and PHR so that the drilling program can run as expected. The collaboration is very solid because all parties have the same passion and commitment, ”he said in a statement on Monday (17/5).

    For the termination process, CPI has completed the PSC provisional checklist termination document on February 25, 2021. It has reached 81% for asset reporting, with approximately 109,000 assets that have been physically inspected and reported. The closure of project reports reached 70% or around 2,940 reports that have been completed.

    Currently, the process of verification and validation (V&V) of exploration and exploitation data of the Rokan Block is underway by the Center for Data and Information Technology (Pusdatin) ESDM and SKK Migas as part of monitoring.

    The V&V process was carried out on approximately 1 million items of printed documents, magnetic and optical media, and rock samples. The process is expected to be completed this month.

“The CPI team continues to work hard to realize a safe, reliable, and smooth termination and transition process. The Rokan block is a strategic asset that is important for state and regional revenues, the community's economy, and national energy security, "he said.

    Albert said the CPI is also trying to ensure the readiness of its employees. Meanwhile, CPI has submitted all personnel and organizational data to SKK Migas.

    

the Rokan Block

    Along with the transfer of management of the Rokan Block, almost all CPI employees will change their employment status to the new operator.

    In preparing its employees, CPI has prepared organizational capabilities, held various communication forums and debriefing programs. The provisioning program includes technical preparation for transitions, positive mental development in facing change to financial management.

    According to him, the Rokan Block's solid performance so far cannot be separated from the human resource factor behind it, namely employees with built-in expertise, culture, and work ethic.

"We are optimistic that they will be able to maintain the performance of the Rokan Block and can contribute significantly to new companies," said Albert.

    Reforminer Institute founder Pri Agung Rakhmanto asked that all preparations for the transition period of the Rokan Block must be matured so that later it does not interfere with production operations.

    At least, three crucial points need to be considered during the transition period for managing the Rokan Block. First, related to legal issues that must be resolved.

"Of course everything related to the legal basis must be completed because this is the basis for everything. In this regard, I think the process is relatively smooth, ”he told Bisnis.

    Second, things related to operational activities must be ensured that they continue to run well. He explained that production operations must continue and continue without any vacancies.

    Third, related to management. During the transition period, it is necessary to ensure that the new management can ensure that operations can continue to run smoothly and can manage properly in maintaining the level of investment, reserves, and ultimately production.

    According to him, finding partners by PHR, a subsidiary of PT Pertamina to work on the block, is a management problem.

"Later the new management will and need to assess all of it," he said.

NEED TO PARTNER

    Executive Director of the National Oil and Gas Companies Association (Aspermigas) Moshe Rizal explained that the most crucial thing in managing the Rokan Block is how Pertamina gets a strong partner with strong funding and operational capabilities, as well as strong technology.

    With great responsibility to oil and gas fields throughout Indonesia, he added, Pertamina's capacity is limited. This limitation can be seen in terms of funds and operational capabilities. To maximize production, he suggested that Pertamina should not work on the Rokan Block itself.

    He argues that there needs to be aware of its capacity and put aside political egos in the national interest so that the block is not in the same boat as the Mahakam Block, which has experienced a decline in production after being transferred to Pertamina.

"Must be willing to cooperate in terms of operations, at least joint operatorship, and perhaps also offer most of the PI," he explained.

Basuki Tjahaja Purnama AKA Ahok

    Previously, Pertamina President Commissioner Basuki Tjahaja Purnama was reviewing several oil and gas fields owned by the company to be used as a reference in managing the Rokan Block.

    The man who is familiarly called Ahok revealed that his party did not want to make the Rokan Block's fate when it was transferred to management, not to experience a decline in production as happened in the Mahakam Block.

The Cepu Block Exxonmobil

    Previously, Ahok visited Cepu Block, East Java to compare oil and gas blocks managed in collaboration with strategic partners with oil and gas blocks that are managed independently.

"Why can Banyu Urip become the pride of Indonesia's oil field with low production costs? Is it because Pertamina is only 45% and Exxon as a partner has excellent management and technology? They train and transfer technology very well for our nation, ”he said recently.

    Ahok said that Banyu Urip's field performance was considered very good. This is evidenced by the absence of oil spills of more than 1 barrel of oil and no lost time incidents since February 2016, and uptime of over 99% with production costs below the US $ 2 per barrel.

    According to Ahok, the results of the study from the Banyu Urip field will be implemented in the Rokan Block field and other oil and gas blocks managed by Pertamina. However, Ahok was reluctant to reveal the potential partners for the Rokan Block.

"We do not want the Wells blocks taken by Pertamina, such as the incident in Mahakam, not to be repeated in Rokan. Do it yourself, if not better, there must be a solution, "he said.

Bisnis Indonesia, page-4, Tuesday, May 18, 2021

Oil Theft in Block Rokan Overcame

 

    The mode of theft of oil by making connections in pipes or illegal tapping which is rife in the Rokan Block has been declared missing since last year.

    Head of the SKK Migas Operations Department, Representative of Sumbagut, Haryanto Syafri, said that the efforts of tight supervision through various means ranging from cooperation with the authorities and technology support have suppressed this illegal practice.

Blogger Agus Purnomo in SKK Migas

"Illegal tapping has ended since the second quarter of 2020. In our records, there is one incident in the third quarter of 2020 and the first quarter of 2021, but it is not illegal tapping, ”he said.

the Rokan Block

    Haryanto said there were still cases of theft of oil and gas facilities in the Rokan Block which were stolen by irresponsible persons. In 2019 there had been 981 events or the equivalent of 2.7 events per day.

    That number will decrease to 300 incidents in 2020. Meanwhile, the theft of these operating facilities has caused losses to the state because upstream oil and gas assets are state-owned, while the operation is carried out by PT Chevron Pacific Indonesia (CPI).

PT Chevron Pacific Indonesia (CPI)

"We hope that the theft of operational facilities can continue to be reduced," he said.

    Riau Police Chief, Agung Setya Imam Effendi, said that the practice of illegal tapping had not occurred at the CPI operational facility. However, theft of pipes and cables is still happening today.

    According to him, this must be resolved immediately so that it can create a good ecosystem in the Rokan Block to pursue the target of ready-to-sell oil production or lifting of 1 million barrels per day by 2030.

"We want to promote this cooperation between the National Police, TNI, SKK Migas, and PT Chevron Pacific Indonesia (CPI) so that we can ensure a conducive ecosystem to support the achievement of the target of 1 million barrels per day," he explained.

    Digital Innovation & Acceleration Advisor of Chevron Pacific Indonesia Ivan Susanto said that illegal activities in the Rokan Block often occur due to pipelines crossing residential areas.

“Crude oil theft often uses illegal tapping mode. The perpetrator perforated the active pipeline and installed a valve to drain the oil into the storage tank truck. With the use of drones, suspicious activity like this can be detected immediately, "he said.

    Meanwhile, the drone used is capable of roaming up to 20 km with an altitude of over 200 meters at a speed of about 60 km/hour. The drone can fly 1-2 hours to conduct surveillance of crude oil pipelines and transmit video directly to the control center.

"This equipment is done by the nation's children at CPI," he said.

Bisnis Indonesia, Page-4, Monday, May 10, 2021

Production Efforts from Old Wells Need Innovation

 

    PT Pertamina Hulu Indonesia said it needed innovation from oil and gas companies to increase the production of old wells.

    Pertamina Hulu Indonesia (PHI) President Director Chalid Said Salim said the company is currently trying to innovate in drilling activities, especially for development wells in regional 3 Kalimantan work areas.

"In 2021, PHI plans to drill five exploration wells and more than 80 development wells," he said.

    Meanwhile, PHI and its subsidiaries, namely PT Pertamina Hulu Mahakam, PT Pertamina Hulu Sanga Sanga, PT Pertamina Hulu East Kalimantan, PT Pertamina Hulu Attaka, and PT Pertamina Hulu West Ganal operate the tens of decades-old oil and gas production and operation facilities and fields. years so it requires technological innovation to maintain operating performance and the economy of assets.

    During the first quarter of 2021, PHI succeeded in exceeding the gas production target by the realization of 688.8 million standard cubic feet per day (MMscfd) of the target of the Company Budget Work Plan (RKAP) of 649.2 MMscfd or reaching 106.1%. Positive results were also obtained from oil production which reached 49 barrels per day (BPD) or 100.4% of the target.

    He continued that currently exploration well drilling is being carried out in the Mahakam working area for the TDE C-1X well, which is one of five exploration wells in PHI's definite commitment.

"The TDE C-1X well is the first area where we hope to find economical reserves to extend the production life of the Mahakam Work Area," he said.

Agus Amperianto

    Zone 8 General Manager Agus Amperianto explained the steps taken by PT Pertamina Hulu Mahakam (PHM) in utilizing technological innovations, including in drilling activities in the Mahakam Work Area.

The Mahakam Block

    PHM develops innovations in drilling techniques at the Mahakam CA without using a rig (rigless operation) through the use of the hydraulic workover unit (HWU) Drilling EHR-12 for drilling development wells.

    Agus added that the use of HWU by PHM has proven successful in supporting drilling activities at a lower cost while still prioritizing operational and production safety so that the company continues to encourage the use of this HWU in all regional work areas 3.

Blogger Agus Purnomo in SKK Migas

    Based on data from SKK Migas up to March 31, 2021, the realization of PHM gas production succeeded in exceeding the target with the realization of 535 MMscfd of the WP&B target of 435 MMscfd or reaching 122.9%. For oil production in the first quarter of 2021, PHM also succeeded in exceeding the target with the realization of 130.3% or the equivalent of 28,317 BPD.

    Upstream Subholding Corporate Secretary Whisnu Bahriansyah added that his party would support business units in the upstream oil and gas sector to contribute well to the achievement of national production.

"Upstream sub-holding will continue to support the positive performance of all upstream sub-holding subsidiaries and affiliates to support the country's energy sovereignty.

Bisnis Indonesia, Page-4, Tuesday, May 4, 2021.

First Quarter of 2021, Pertamina's Oil and Gas Production Exceeds the Target

 

    PT Pertamina Hulu Energi, the Sub holding Upstream of PT Pertamina (Persero), managed to record oil and gas production of up to 861 thousand barrels of oil equivalent per day / BOEPD in the first quarter of 2021. This realization is 2% higher than the company's target this year of 848 thousand BOEPD.

PT Pertamina EP

    Pertamina Hulu Energi President Director Budiman Parhusip said the contribution of oil and gas production came from the oil and gas block assets of the company and its affiliates, namely PT Pertamina EP, PT Pertamina EP Cepu (PEPC), PT Pertamina Hulu Indonesia, PT Pertamina Internasional EP, and several other companies. Asset companies spread at home and abroad.

PEPC

"This achievement is 147 thousand BOEPD from international oil and gas fields and 713 thousand BOEPD from domestic. We are grateful that for the first quarter of 2021, we were able to hold back the rate of decline in natural products in the majority of our fields, "he said.

    He explained that the actual gas production until the end of March was recorded at 2.405 million standard cubic feet per day / MMscfd or 4% above the company's first-quarter target of 2,318 MMScfd. Meanwhile, the realization of ready-to-sell gas production was 1,914 MMscfd. Inline, oil production from domestic oil and gas blocks is also very good.

"Until March 2021, domestic oil production will reach 298 thousand barrels per day (BPD), while the lifting is 290 thousand BPD. We continue to strive to be able to meet the targets that have been set, "added Budiman. Meanwhile, oil production from foreign assets was recorded at 97 thousand BPD and gas 291 MMScfd.

    The company has completed 1,647 kilometers (km) of 2D seismic, 33% higher than the target, and 198 square kilometers (km2) of 3D seismic. For exploration drilling, the company has completed one well and four other wells are still under construction. 

    Next, his party has completed the drilling of 46 development wells and worked on 66 other wells. His party also succeeded in reworking wells with as many as 124 activities or 13% more than the target and Well intervention 2,334 activities from the target of 2,301 activities.

    The existence of organizational changes in Pertamina, especially the formation of Upstream Subholding, has made Pertamina's upstream oil and gas activities more adaptive, agile, and efficient. Through this sub-holding, the synergy of all work areas through regionalization can increase operational excellence, accelerate the business development process, and make decision-making faster and agile due to reduced bureaucratic processes.

"Subholding Upstream Pertamina will continue to strive for optimal performance by trying to maintain production and lifting as well as continuing exploration, development, and innovation activities in all upstream companies to achieve the target this year," said Budiman.

Investor Daily, Page-8, Monday, May 3, 2021.

Uncertainty Still Looming

 

    High uncertainty still overshadows many upstream oil and gas projects which are targeted to operate this year. Apart from the prolonged impact of the pandemic, the fluctuating factor in world oil prices also makes the prospect always combined with risk.

Blogger Agus Purnomo in SKK Migas

    Based on the records of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), this year it is targeted that as many as 12 projects will be on stream with a total project value of US $ 1.62 billion.

    During the first quarter of 2021, there were 4 onstream projects with a total investment of US $ 111 million, increasing oil and gas production by 5,850 barrels of oil per day (BOPD) and 69.5 million standard cubic feet per day (MMscfd).

PHE ONWJ

    These projects include Gas Supply to RU-V Pertamina Hulu Mahakam, Belato Field by Seleraya Merangin Dua, and the KLD PHE ONWJ project, West Pangkah Saka Indonesia Pangkah.

    Executive Director of the National Oil and Gas Companies Association (Aspermigas) Moshe Rizal is optimistic that the cooperation contract contractors (KKKS) can be more active this year and increase their investment to catch up with last year's lagging performance.

    KKKS will focus on commercially faster projects so that the possibility of project delays this year can be minimized. In the latest development, the Merakes field in the East Sepinggan Working Area has been included in the onstream project after being delayed last year. National gas production is projected to increase by 368 MMscfd.

    It is admitted that realizing the project with a total investment of US $ 1.3 billion located in the Makassar Strait requires extra efforts due to the impact of the Covid-19 pandemic that has emerged since early 2020.

"This project was initially targeted to get onstream faster in the third quarter of 2020. It turns out that we have to shift slightly from the onstream plan that is in the POD approval to the first quarter of 2021, "said the head of SKK Migas Dwi Soetjipto.

Eni

    The important thing from the development of Merakes Field is the ability to synergize to improve the economy in the field. The proximity of the Merakes field discovery to the Jangkrik Lapanga Floating Production Unit (FPU) allows Eni to maximize synergies with the closest existing infrastructure to improve the economics of the Merakes Field. You do this by using a shared facility sharing scheme.

the Merakes field by ENI

    The Merakes Field development project is a deep-sea project where the depth is about 1,500 meters below sea level. This project has 5 production wells with a total production capacity of 450 MMSCFD or the equivalent of 85,000 barrels of oil equivalent per day (BOEPD).

    The production contribution from the Merakes field will increase the gas supply for East Kalimantan Province. Most of it will be prioritized for domestic consumers, including the fertilizer and electricity industry in East Kalimantan, and processed at the Bontang Refinery into LNG.

"We hope that with the certainty of gas supply for the industry, it will provide a bigger multiplier effect for the national economy," Dwi said.

    According to him, this year there are two national strategic projects targeted onstream, namely Jambaran Tiung Biru with a total investment of US $ 1.53 billion. If it operates commercially, it is projected to increase national gas production by 190 MMscfd.

    Tangguh Train-3 Papua is also scheduled to go on stream in the fourth quarter of 2021 with estimated additional gas production of 700 MMscfd and a concentrate of 3,000 barrels of condensate per day (BCPD).

    This US $ 8.9 billion projects was delayed from the previous target in the third quarter of 2021 to the fourth quarter of 2021. With the support of these projects, it is hoped that investment in the upstream oil and gas sector this year can be better than last year's US $ 10.21 billion from the 2020 target of US $ 12.1 billion.

"We hope that the investment in the upstream oil and gas sector at the end of the year can be greater than 2020. The amount of realization in the first quarter of 2021 is the US $ 2.4 billion, then for revenue in the first quarter of 2021 it will reach US $ 6.67 billion."

    Energy Watch Executive Director Mamit Setiawan said these expectations can be achieved as long as a number of important conditions are met. For example, related to the development of world oil prices, ease of carrying out work during a pandemic, full support from stakeholders, and solid cooperation at the regional level.

Bisnis Indonesia, Page-2, Friday, April 30, 2021.

Caring for Production Increase expectations

 

    The national fuel consumption which is projected to continue to increase makes the target of oil production of 1 million barrels per day and gas of 12,000 MMscfd in 2030 to be crucial at a time when Indonesia's efforts to build energy independence.

    Meanwhile, Indonesia is still the country with the largest oil imports in Southeast Asia due to the increasing domestic consumption of oil and gas without a significant increase in production.

    In the last 2 decades, the discovery of new oil reserves has been classified as minimal and Indonesia still relies on old wells that have not been explored. As a result, the government must import oil and gas to meet domestic energy needs, which often creates a trade balance deficit.

    In the next 10 years, petroleum consumption in Indonesia is projected at 2.27 million barrels per day (BPD) and natural gas consumption of around 11,728 MMscfd. This number has almost doubled compared to last year's consumption of around 1.66 million BPD of oil and 6,557 MMscfd of gas.

    On the other hand, the government's efforts to increase oil production to 1 million BPD and gas to 12,000 MMscfd are still fraught with a number of challenges. One of them is the Covid-19 pandemic which has had a negative impact on the upstream oil and gas industry.

Blogger Agus Purnomo in SKK Migas

    Secretary of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Taslim Z. Yunus said Indonesia's upstream oil and gas industry was influenced by global conditions caused by the level of control of the Covid-19 pandemic, fluctuations in world oil prices, and global investment trends.

    According to him, a tough challenge for the upstream oil and gas industry is the massive impact of Covid-19 which has caused oil prices to fall. As a result, production has also decreased, because oil and gas companies tend to reduce their investment.

    Last year, a number of international oil and gas companies that cut their investment were ExxonMobil by 30%, Shell by 20%, Chevron 20%, BP 25%, and Eni 255.

"What they need is to compete with other countries from the IRR, then the future trend is to look at environmentally friendly energy because from a social point of view it will be easier," he said.

    Meanwhile, SKK Migas has prepared four strategies to increase national oil and gas production as well as towards the 2030 production target, namely by optimizing production in existing fields, transforming resources into production, accelerating chemical Enhanced Oil Recovery (EOR), and exploring major discoveries.

    The long-term strategy will go through two stages to curb the rate of decline in production and increase production.

"The first and second strategies are to hold down the rate of production, while the increase in production will result from the EOR and exploration strategies," he explained.

    Head of SKK Migas Dwi Soetjipto added that investment needs will continue to increase for the next 10 years in order to pursue the oil production target of 1 million BPD and gas of 12,000 MMscfd. The investment is set at the US $ 187 billion.

    Dwi said that besides being attractive to investors, the target could provide a multiplier effect in the form of the gross revenue of US $ 371 billion with state revenues of US $ 131 billion in 2030. In addition, with money circulating from upstream oil and gas projects and open job opportunities, it will have an impact. both for the national and regional economies.

    Nevertheless, there are several challenges that need to be resolved domestically, namely the complexity of licensing, overlapping regulations between the central and regional governments, an unattractive fiscal regime, data unavailability, constraints in the area of ​​operation, land acquisition constraints, the longer oil and gas monetization process. and fear of making decisions, in this case, the criminalization of policies.

    Meanwhile, Ronald Gunawan, President Director of PT Medco E&P Indonesia, said 2020 was a difficult year for the upstream oil and gas industry. The Covid-19 pandemic has suppressed the performance of cooperation contract contractors (KKKS).

    According to him, the world oil price dropped drastically in the last year and followed by low natural gas prices made the upstream oil and gas sector languish. However, with efforts escorted by the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), operational activities can continue in the midst of a pandemic.

"SKK Migas support is very good. Hence, the operations of the KKKS are a little disrupted but not significant, ”he said.

Ronald said the vision to pursue the oil production target of 1 million BPD and 12,000 MMscfd of gas by 2030 has become a joint commitment of the government, SKK Migas, and KKKS.

    Meanwhile, since 2015 Medco has continued to increase its oil and gas production levels from the range of 56,000 barrels of oil equivalent per day (Mboepd) to reach the level of 100,000 Mboepd in 2020.

    According to him, the Covid-19 pandemic provides new lessons for running operations more efficiently. With a 20% reduction in capital expenditure or capital expenditure, Medco is still able to record an increase in production amid the pandemic.

INCENTIVE

    An energy observer who once served as Governor of Indonesia for OPEC, Widhyawan Prawiraatmadja, said that there needs to be an incentive provided by the government to be able to pursue the target of increasing oil and gas production.

    He said that it is possible to increase oil and gas production again in Indonesia. He gave an example that other countries, such as the United States and Mexico, had successfully implemented reliable technology, improved fiscal policy, and improved the business climate in an integrated manner.

"We have to do something drastic, the fiscal term must be the same as in other places. "The higher the spend, the higher the chances of getting the giant, this has been proven in Mexico," he said.

    Meanwhile, a Member of the National Energy Council, Satya Widya Yudha, said that in the context of energy security, the government needs to pay attention to affordability.

    Therefore, fossil energy will still be very dominant in the future, but still paying attention to environmental factors that will be supported by technology.

"So if our renewable energy is still less affordable, as a whole people will go to fossils, the world will go to fossils," he said.

Bisnis Indonesia, Page-4, Thursday, April 29, 2021.