Cepu Block Backup Optimized

    The government is targeting the potential reserves that are still available in the Cepu Block to prevent a natural decline in production in the working area which is the buffer for national oil production. The Cepu working area, which is operated by ExxonMobil Cepu Limited (EMCL), has recorded crude oil production of 475 million barrels.

ExxonMobil Cepu Limited (EMCL)

    Meanwhile, this production is higher than the estimated total volume of oil reserves produced based on the initial plan of development/POD of 450 million barrels.

the Cepu Block East Java by ExxonMobil Cepu Limited (EMCL)

    Minister of Energy and Mineral Resources Arifin Tasrif said the contribution from the Cepu Block was very large to the achievement of ready-to-sale production or national lifting reaching 30-40 percent. Unfortunately, the water content in the Cepu Block drilling has now increased which indicates a decline in production from the Cepu Block.

"There is another potential of 40 million barrels that must be exploited from around Cepu," he said.

    Arifin hopes that ExxonMobil can optimize oil and gas resources in the Cepu Block and immediately develop existing reserves to be processed into production. According to him, with the total production of the Cepu Block which has reached 475 million barrels, there are still almost half of them, namely 940 million barrels.

"ExxonMobil will take steps, among others optimizing the work in the well to be maintained, then subsurface works will be carried out, more intense programs and also prevent downtime," he said.

Blogger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said the decline in production in the Cepu Block was indeed due to an increase in the portion of water that came out of oil drilling and an increase in the gas ratio. 

    On the other hand, the Banyu Urip Field is currently at a stable production level at around 220,000 barrels per day. However, with production levels higher than the initial estimate, the Banyu Urip Field also experienced a scientific decline in production.

"Currently SKK Migas continues to oversee ExxonMobil Cepu Limited (EMCL) together with partners to discuss various initiatives to manage the decline in production that has begun to occur," he said.

Nicke Widyawati

    Meanwhile, PT Pertamina (Persero) said it would take part in increasing production in the Cepu Block. Pertamina President Director Nicke Widyawati said the increase in production in the Cepu Block would be pursued through the completion of the Jambaran-Tiung Biru (JTB) project which is being worked on by PT Pertamina EP Cepu (PEPC).

the Jambaran-Tiung Biru (JTB)

"Pertamina is committed to increasing additional production in the block because we realize that in the energy transition plan, the use of gas will be a transition from fuel to NRE," said Nicke Widyawati.

    The project with a total investment value of US$ 1.53 billion is projected to have a peak gas production of 192 MMscfd. The JTB project is said to provide a multiplier effect in providing gas supply for various industrial sectors in Central and East Java. 

    Based on SKK Migas data, in the first quarter of 2021 the progress of project work has reached 88.77%. The realization was still below the target of 98.22%.

    Meanwhile, ExxonMobil Cepu Limited (EMCL) crude oil production in the first three months of this year was recorded at 213,251 barrels per day or only 97.4% of the APBN target of 219,000 bopd.

GOVERNMENT APPRECIATION

    Meanwhile, the government will provide awards for upstream oil and gas contractors who have good performance. Arifin said the Ministry of Energy and Mineral Resources has sent a letter to the Ministry of Finance regarding the plan to provide incentives for existing upstream oil and gas contracts.

    According to Arifin, the provision of incentives is to increase the interest of the cooperation contract contractors to increase their production, especially for old wells.

"Those who work hard and produce good results will be rewarded in the form of incentives," he said.

    Arifin continued that wells that had been exploited for a long time had reduced reserves. It takes a lot of effort to at least maintain production levels and maintain the economy of the field.

"If production can increase, the government's share will also increase," he said.

    In addition to incentives for existing contractors, the government will also provide incentives to attract new investors. The challenge is that international oil and gas companies have a tendency to shift their investment costs to NRE.

    The government seeks to attract investors by providing attractive fiscal policies supported by the provision of data and simplification of licensing.

“Indonesia is one of the most attractive locations in the world for investment in the upstream oil and gas sector. For that, we must be able to open an attractive 'showroom' to be visited," said Arifin.

    Dwi Soetjipto assessed that the incentives to be given would depend on the economic value of the business in the field. In addition, incentives also need to refer to the applicable regulations. Dwi Soetjipto said SKK Migas would review a number of aspects to be able to provide these incentives.

"We'll see which one is the best for the country to increase investment," he said.

    On another development, the government is encouraging the development of methane hydrate as an alternative energy source with low emissions. Methane hydrate gas is believed to be one of the unconventional energy innovations that can substitute the use of conventional oil and natural gas.

    Based on research in 2004, it has been found potential reserves of methane hydrate as much as 850 trillion cubic feet in the offshore area of ​​southern Sumatra to the northwest of Java and in the Makassar Strait, Sulawesi.

    This amount is about eight times the current natural gas reserves so that it can support national energy security for up to 800 years. With the support of further research, the volume of methane hydrate gas reserves in Indonesia is estimated to reach 3,000 TCF.

Bisnis Indonesia, Page-4, Thursday, June 10, 2021

Chevron Workers Immediately Change Status to Pertamina Officers

 

    Ahead of the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to Pertamina Hulu Rokan (PHR) on August 9, 2021, Pertamina welcomes CPI workers who will change status to Pertamina employees or commonly called Pertamina Officers.

PT Chevron Pacific Indonesia (CPI)

"I welcome the 2,757 employees of Chevron Pacific Indonesia, prospective Pertamina Group employees," said PT Pertamina (Persero) President Director Nicke Widyawati in an online discussion in the form of a Townhall Meeting with all CPI employees.

“The proverb says 'You don't know it, you don't love it, for that today there was a brief introduction from Pertamina regarding Corporate Overview, Subholding Upstream Overview, PHR Overview, and Human Capital Aspects so that fellow workers who will become the Pertamina Group's extended family will get to know Pertamina closer,” said Nicke Widyawati.

Nicke Widyawati

    According to Nicke, the transfer of management to Pertamina as a national company will provide wider benefits for the state both in terms of management and management state revenue and strengthen Pertamina's position as one of the locomotives of development and the national economy.

"We also have a mandate and a noble task where we have a target to be able to produce 1 million barrels of oil and gas by 2030, for that we need commitment and dedication from all elements of workers, especially the Upstream Subholding to be able to realize this goal," concluded Nicke.

    President Director of PT Pertamina Hulu Energi as Upstream Subholding Budiman Parhusip explained that later the Rokan Block will be managed by PHR under the auspices of PT Pertamina Hulu Energi as Upstream Subholding. Currently, PHR manages Upstream Work Areas and Assets in the Sumatra Region, known as Regional 1 - Sumatra Subholding Upstream.

"With this Regionalization system, between Work Areas and Assets that are close to each other, especially Sumatra in this case, field optimization and operational development effectiveness can be carried out. So that the joining of CPI Workers will also open up more career development opportunities,” explained Budiman.

    PHR President Director Jaffee Arizon Suardin added an explanation regarding PHR, which is also Regional 1 – Sumatra in Pertamina's Upstream Subholding that PHR manages the Rokan block and manages all Pertamina blocks or work areas in Sumatra.

“The focus is that we want to grow significantly and sustainably by focusing on all the potentials that can still be developed. Business Continuity to maintain and even increase production as well as safety and reliability remain the main priority in carrying out the work. Pertamina through PHR will also ensure that the operatorship transfer runs smoothly so that we can complete the program in 2021 and grow significantly in the following years," said Jaffee.

    Regarding Human Resources, Oto Gurnita, Director of Human Resources & Business Support for Upstream Subholding, explained the basic principles of managing workers towards management transfer, especially those related to the organization, employee development transfer, and employee development, and other industrial relations related matters. 

    Managing Director of Chevron IndoAsia Business Unit and President Director of PT Chevron Pacific Indonesia (CPI) Albert Simanjuntak said that this opportunity for open discussion is a positive step for both parties.

"Through this event, we hope that CPI workers can gain a comprehensive insight into PT Pertamina (Persero), Subholding Upstream, and also specifically PT Pertamina Hulu Rokan (PHR). Human Resources is the most important asset in any company and PT Chevron Pacific Indonesia (CPI) is no exception. Integrity, professionalism, and dedication are values ​​that are proven to bring success to us. Hard work and these values ​​will continue to bring success to workers wherever they are. For that, he hopes that PT Chevron Pacific Indonesia (CPI) workers who will join PHR can make their best contribution, even during this COVID-19 pandemic, with the hope that the production of the Rokan block will achieve maximum results," said Albert.

Investor Daily, Page-10, Monday, June 7, 2021

Chevron Gives License to Use IT Applications to Pertamina

    In order to support the smooth transition of the Rokan Block, PT. Chevron Pacific Indonesia (PT CPI) has agreed to license the use of 123 information technology (IT) applications to Pertamina Hulu Rokan (PHR) as the next operator. These applications have been very important in supporting the digitization of oil and gas operations and production activities in the Rokan Block to run efficiently.

PT. Chevron Pacific Indonesia (PT CPI)

“Information and data technology is one of the main components in the Rokan Block transition process. Therefore, the transfer of management to the next operator must be carried out carefully and systematically so that the operation of the Rokan Block continues without technical problems when it is transferred on August 9," said Managing Director of Chevron IndoAsia Business Unit & President Director of PT CPI Albert Simanjuntak.

    Almost all IT applications that have been used by PT CPI will be granted a user license to PHR. These applications, among others, are used for monitoring oil production and transportation in real-time, monitoring the condition of wells and drilling rig activities, regulating the Duri field steam injection, managing partners, managing the procurement of goods and services, and others.

    Last April, PT CPI, and PHR signed an agreement to activate the Rokan Transition Network (RTN), which is an intermediary network used to transfer PT CPI's applications. PHR will be able to access the RTN to install and test commercial applications. PT CPI supports the preparation of all applications that are licensed to use the PHR so that they can operate properly before the process of transferring the management of the Rokan Block. 

    To date, more than 80 applications have been completed in the RTN. In addition, PT CPI also cooperates intensively with PHR to transfer data into IT systems/applications that will be needed after the transfer of management of the Rokan Block.

Blogger Agus Purnomo in SKK Migas

"The parties involved, namely SKK Migas, PT CPI, and PHR, have the same passion and commitment to realize a safe, smooth, and reliable management transfer so that coordination takes place well," said Albert.

the Rokan Block by Chevron

    Joint Utilization The success of the drilling program is an important part of efforts to maintain production levels in the Rokan Block after the transfer of management. To ensure the availability of material supplies to support the drilling program, PT CPI and PHR have signed a joint utilization agreement of state-owned warehouse facilities in the Rokan Block on April 21. 

    With this agreement, PHR can begin to import and store materials to support the drilling program in warehouses managed by PT CPI in Duri and Dumai. These materials include pipes, conductors, casings, tubing, wellheads, valves, cables, and pumps. Currently, a number of PHR materials have arrived at PT CPI's warehouse in Dumai. The arrival of other materials will follow.

"Hopefully, after the date of the transfer of management later, the drilling program can continue without any disruption to material supply because PHR's materials are already available in the field," said Albert.

Working Area the Rokan Block

    PT CPI is a Cooperation Contract Contractor (KKKS) from the Government of Indonesia that operates the Rokan Block in Riau. In operating the Rokan block, PT CPI works under the supervision and control of SKK Migas.

Investor Daily, Page-10, Thursday, June 3, 2021

Riau Governor Supports Transfer of Management of Rokan Block from Chevron to Pertamina

    The Riau Provincial Government is ready to support the process of transitioning the Rokan Block from PT Chevron Pacific Indonesia (CPI) to Pertamina. By being managed directly by Pertamina, it is hoped that in the future the Rokan Block will make an increasingly significant contribution to meeting the national oil and gas energy needs.

PT Chevron Pacific Indonesia (CPI)

"We hope that after the transition process is complete, and the Rokan Block is managed by Pertamina, the part of the regional government to manage the PI (Participating Interest) of 10% can also take place. We have prepared Regional Owned Enterprises (BUMD) to participate in the management of this PI," said Syamsuar when receiving a visit from Jaffee Arizon Suardin, President Director of PT Pertamina Hulu Rokan (PHR) - Sumatra Region, at the Riau Governor's Office House.

Blogger Agus Purnomo in SKK Migas

    Also attending the working visit was the Head of SKK Migas Representative for North Sumatra (Sumbagut) Rikky Rahmat Firdaus, Head of the Operations Department of SKK Migas Sumbagut Representative Haryanto Syafrie, and Head of the Riau Energy and Mineral Resources Office Indra Agus Lukman. 

    Syamsuar explained, after going through the bidding process and evaluating all BUMDs in Riau Province, finally two Regional Owned Enterprises (BUMD) were selected that met the criteria to participate in the PI in the Rokan Block, namely PT Riau Petroleum and PT Bumi Siak Pusako.

    The Governor of Riau also hopes that PHR can empower BUMD, local contractors, and local workers for operational support activities for the Rokan Block.

“The most important thing is the status of former CPI workers and their subcontractors. The rights of workers must be a concern for Pertamina," he said.

Jaffe Arizon's working visit to the Governor of Riau to prepare for the transfer of management of the Rokan Block. During this visit, Jaffee wanted to ensure that the transition process went smoothly and that the Riau Provincial Government supported the process of transitioning the management of the Rokan Block to Pertamina. 

the Rokan Block by Chevron

    Regarding the status of former CPI workers, Pertamina's Human Capital (HC) team has prepared all the things needed for the transition process for CPI workers to become part of Pertamina. The management of the Rokan Block by CPI will end on August 8, 2021, and on August 9, 2021, the Rokan Block will be officially managed by PT Pertamina Hulu Rokan (PHR) under the Gross Split Production Sharing Contract (PSC) scheme and the local government has 10% PI rights, based on the Minister of Energy and Mineral Resources Regulation No. 37 of 2016.

Working Area the Rokan Block Chevron

    The Rokan Block is located in Riau Province, with working areas in five regencies, namely Rokan Hulu, Rokan Hilir, Bengkali, Siak and Kampar, as well as two cities, namely Pekanbaru and Dumai. With a working area of ​​6,300 KM2, the Rokan Block has 80 production fields with more than 12,000 wells.

Investor Daily, Page-10, Thursday, June 3, 2021

Global Oil and Gas Investors Start Leaving Indonesia

    A number of cooperation contract contractors (KKKS) chose to leave after years of investing in Indonesia's oil and gas fields. After Royal Dutch Shell confirmed that it would leave the Masela Block (Maluku), now ConocoPhillips intends to leave the Corridor Block (South Sumatra).

Blogger Agus Purnomo in SKK Migas

    Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Fatar Yani Abdurrahman revealed that ConocoPhillips' plan to release Participating Interest (PL) ownership shares in the Corridor Block had been submitted to SKK Migas.

"Verbally, it has been conveyed like that, releasing Participating Interest (Pl) shares," he said.

    Although it has stated its intention verbally, ConocoPhillips has not detailed further the reasons for releasing Participating Interest (PL) ownership shares in the Corridor Block. Fatar confirmed that there is no planned meeting with ConocoPhillips. SKK Migas is still waiting for ConocoPhillips' official proposal submission. ConocoPhillips Vice President Commercial and Business Development Taufik Ahmad declined to comment further on this news.

"Until now there has been no additional explanation apart from what was conveyed by SKK Migas," he said.

    Currently, ConocoPhillips is listed as the contractor for the Corridor Block with a 54% participating interest and Repsol Energy has a 36% interest. Meanwhile, Pertamina has a participating stake of 10%. The production sharing contract (PSC) in the Corridor Block will expire on December 20, 2023. 

    A new production sharing contract was signed in 2019, whereby the existing KKKS received a 20-year extension with a Gross Split PSC. In the period 2023-2026, there will be a transition period, in which ConocoPhillips will still be the operator. However, after this period, the operatorship will be transferred to Pertamina.

Repsol

    Later, in the latest production sharing contract, there will be a change in the amount of Pl, namely Pertamina Hulu Energi Corridor controlling 30%, ConocoPhillips 46%, and Repsol 24%. The planned departure of ConocoPhillips adds to the long list of global oil and gas companies leaving Indonesia. 

    In July 2020, Royal Dutch Shell plans to withdraw from the Masela Block Perpetual Gas Project. Shell, which holds a 35% participating stake, is still looking for a replacement candidate.

    Another investor who also intends to leave is PT Chevron Pacific Indonesia (CPI) which will release its participating stake in the Indonesia Deep Water Development (IDD) Block. After Shell left, SKK Migas Deputy Operations Julius Wiratno said the search for partners for the Masela Block is targeted to be completed by the end of this year.

"Shell is in the process of looking for a replacement until the end of this year. Chevron is the same way. This is common in the business world," he said.

    In this situation, Julius ensured that the government could not intervene in the ongoing business-to-business process. The Executive Director of the Reforminer Institute, Komaidi Notonegoro, believes that the government needs to evaluate the upstream oil and gas business regarding the plans of global investors who want to leave.

"However, domestic business actors such as Pertamina need partners," said Komaidi Notonegoro.

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) projects that this year's oil and gas lifting will reach 97.3% of the target in the 2021 State Budget (APBN). Head of SKK Migas Dwi Soetjipto projects that this year's oil and gas lifting reached 1.6 million barrels of oil equivalent per day (MBOEPD) or lower than the target in the 2021 State Budget of 1,711.78 MBOEPD.

    Referring to the realization in the first quarter of 2021, according to Dwi, there is still pressure on oil and gas production. On the other hand, there was also an unplanned shutdown and a delay in drilling execution. 

"There is also a delay in the onstream schedule of several oil and gas fields so that the total is reduced by 25,000 barrels per day and gas by 99 mmscfd from the target that has been set," he said.

    Dwi added, in order to cover the existing production gap, SKK Migas targets additional drilling activities this year. They predict drilling activities can increase to 700 activities.

Kontan, Page-13, Wednesday, June 2, 2021

Train-3 Tangguh Refinery Project Potentially Moved Back to 2022

    The Tangguh Train-3 Refinery Project is estimated to be delayed until mid-2022 due to the impact of the Covid-19 pandemic. Project work was stopped due to an increase in positive cases of Covid-19, which had an impact on construction progress.

Blogger Agus Purnomo in SKK Migas

    Deputy Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno said the target for the Tangguh Train-3 Papua Refinery operation by the end of this year's quarter would be difficult to achieve. The reason is, from November 2020 to February 2021, the project work was stopped completely due to an increase in Covid-19 cases.

"In the fourth quarter, Tangguh Train-3 will not be able to start operating. My estimate is around mid-2022," he said.

    He explained that it was quite difficult to catch up on the progress of project work caused by the Covid-19 pandemic. This is because there is still uncertainty regarding the number of workers (personnel onboard/POB) who can work in the field. This condition may change if the vaccination program takes place.

“Perhaps if vaccination is implemented for all workers it can speed up progress. We are working on this,” explained Julius. At the end of June, a special session will be held to conduct a scheduled risk analysis of the progress of the Tangguh Train-3 Refinery Project.

"We'll see the results later," he added.

    Since the beginning of the pandemic, the Tangguh Train-3 Refinery Project has been affected. At that time, the number of workers had to be reduced from 13,000 POB to 6,300 POB to prevent the spread of Covid-19. Then to catch up with delays, the number of personnel was increased to 7,700 workers in September last year. 

    Unfortunately, then there was an outbreak of Covid-19 cases. The delay in the operation schedule, Julius asserted, will not have an impact on the project's production volume.

"It's only shifted back a few months because the train capacity has been fixed," he said.

    The Tangguh Train-3 Papua Refinery Project is estimated to reach peak gas production of up to 700 million standard cubic feet per day/MMscfd and 3,000 barrels of oil per day (BPD). The project with an investment of US$ 8.9 billion was originally scheduled to operate in the last quarter of this year. 

    However, until March 26, the progress of this project was still below the target. The construction of land facilities for this project still reached 89.58% of the target of 96.21%. Meanwhile, the progress of work on offshore facilities is better, which is 99.19% of the 100% target.

Investor Daily, Page-10, Wednesday, June 2, 2021

Rokan Block Switching Staggered

    The process of transitioning the Rokan Block from PT Chevron Pacific Indonesia (PT CPI) to PT Pertamina (Persero) is still ongoing. The PT Pertamina Hulu Rokan (PHR) process was hampered by the spread of the SARS-CoV-2 virus. Director of State Receivables and Other State Assets, Ministry of Finance (Kemenkeu), Lukman Efendi confirmed that the process will continue. Until now, the transition is still reaching 10 percent.

PT Chevron Pacific Indonesia (PT CPI)

“There is a transition of 10 percent of the total land area of ​​around 64 thousand hectares. Will become BMN (State-Owned Goods). We have done a physical check," said Lukman.

    In addition to the inspection of land assets which reached 10 percent, there was an inspection of capital assets which had reached 83 percent. Now, inspections related to inventory assets have reached 60 percent. So far, only the inventory material inspection has been completed 100 percent. Lukman hopes that the entire management transfer process can be completed before August 8, 2021.

    The government continues to try to go through the process before the termination or expiration of the cooperation contract. The value of the Rokan Block BMN was recorded at Rp. 197.78 trillion. This amount reaches 20 percent of the total value of the National Cooperation Contract Contractors (KKKS) BMN which is Rp 497.62 trillion as of 2019.

"Wealth in the form of land, inventory assets, and capital assets," he added.

the Rokan Block

    Previously, Riau Governor Syamsuar voiced his hope that oil and gas production from the Rokan Block could be maximized. This is because regional revenues are highly dependent on oil and gas revenue sharing. 

    The Riau Regional Government is committed to supporting the smooth transfer of management of the Rokan Block and facilitating it. Syamsuar also stated the readiness of Regional Owned Enterprises and local companies to cooperate business-to-business.

"The Riau Regional Government is ready to help facilitate licensing in this transitional period of management," he added.

the Rokan Block

    The Rokan Block is the largest oil block in Indonesia. It covers an area of ​​6,220 square kilometers and covers five districts in Riau. Namely, Bengkalis, Siak, Kampar Rokan Hulu, and Rokan Hilir.

Jawa Pos, Page-3, Monday, May 31, 2021

Rokan Block PLTGU Auction Must Have Government Permission

    The Ministry of Finance through the Directorate General of State Assets (DJKN) emphasized that the Cogen PLTGU tender in the Rokan Block must obtain a permit. Therefore, the Ministry of Finance has sent a letter to the Minister of Energy and Mineral Resources regarding the tender.

the Rokan Block by Chevron

    Director of State Receivables and Other State Assets (PNKL), Lukman Effendi said the letter had also been sent to PT Mandau Cipta Tenaga Nusantara (MCTN) as the owner of the Steam Power Plant (PLTGU) and PT Chevron Pacific Indonesia (CPI). Lukman reminded every action on land assets included in State Property (BMN) must obtain government approval.

PT Chevron Pacific Indonesia (CPI)

“This letter is addressed to the Minister of Energy and Mineral Resources, MCTN, and PT. Chevron Pacific Indonesia (CPI). We'll just say that first, we'll see the response. Of course, the parties should pay attention to the letter," Lukman said in a virtual press conference.

    The move to send the letter was done not because the Rokan Block electricity generator tender process was being discussed, but as a general effort to control State Property (BMN) assets. Actually, the return of upstream oil and gas State Property (BMN) must be done no later than two years before the end of the contract period. 

    However, this regulation has only just come into existence after the issuance of regulation PMK 140 of 2020 concerning the reform of the management of upstream oil and gas State Property (BMN). Thus, the return of State Property (BMN) to the Rokan Block is not carried out by referring to the new regulation.

"In the future, we want to be orderly, because this is a product of the past, and I have not received comprehensive data regarding the tender for this power plant. I have tried to get the data but have not been able to," said Lukman.

    In fact, his party has not received any official notification regarding the current tender process. PLN Deputy President Director Darmawan Prasodjo revealed that currently, his party is still following the ongoing Ielang process for the Rokan PLTGU.

"We understand that this meeting point must be found, this is ongoing. There is still 3 months and of course, this meeting point can be reached within 1 month," said Darmawan.

Dwi Soetjipto

    Meanwhile, the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto revealed that the progress of preparing for the transfer of power plant management has now reached 80 percent.

Blogger Agus Purnomo in SKK Migas

"PLN will supply electricity and steam to the Rokan Block Oil and Gas Working Area. The maintenance program and business processes have been submitted," he said.

    Dwi added that currently, the Auction process is still waiting for the announcement stage by MCTN, which is the Rokan Block electricity supplier where the majority of its shares are owned by Chevron Standard Limited (CSL).

Trillions of Rokan Assets

    Lukman Effendi revealed that the Rokan Block BMN was recorded at Rp 97.78 trillion. This amount is equivalent to 20% of the total value of the National Cooperation Contract Contractors (KKKS) BMN which as of 2019 reached Rp 497.62 trillion.

"The value is Rp 97.78 trillion, 20 percent of the total value of the national KKKS BMN, be it land, inventory assets, and modal assets," said Lukman.

    Preparations for the transfer of management of the Rokan Block for administrative and physical examination of BMN are still ongoing. Currently, land assets still reach 10% of the total area of ​​62,000 hectares.

"10% of what we have done physical checks, everything should have been done but it's a pandemic, February has entered a pandemic, this is ongoing, the important thing is physical and administrative checks. Documents continue, physical checks can be done as well," said Lukman.

    Meanwhile, for capital assets as of April 2021, the progress has reached 83%. It is hoped that it will be completed by the end of this month. Meanwhile, the inventory of assets has now reached 60% and is believed to be completed in the near future.

Kontan, Page-10, Saturday, May 29, 2021

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