Seven Upstream Oil and Gas Projects Worth US$ 1.45 B in Operation

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that as many as seven upstream oil and gas projects from the target of 12 projects this year have been operating (on stream). The investment value of these seven projects reaches US$ 1.45 billion or equivalent to Rp. 21.12 trillion.

    The seven upstream oil and gas projects are the Belato-2 Early Production Facility (EPF) project by PT Seleraya Merangin II, Enhanced Oil Recovery (EOR) for the Jirak Field by PT Pertamina EP, and gas supply to the Balikpapan Refinery by PT Pertamina Hulu Mahakam (PHM).

    Next are the development of the KLD Field by PT Pertamina Hulu Energi Offshore North West Java (ONWJ), the West Pangkah Field by PT Saka Energi Indonesia, the Merakes Field by Eni East Sepinggan, and the North Area Field by Jindi South Jambi Block B.

Eni

    The seven projects produce oil production of 9,850 barrels per day (BPD) and gas of 474.5 million standard cubic feet per day/MMscfd. Thus, the successful completion of these seven projects can reduce the rate of natural production decline that occurs.

Blogger Agus Purnomo in SKK Migas

“The activities carried out have successfully completed 58.3% of the target. We are optimistic that all of the upstream oil and gas projects targeted by 2021 can be completed because the other five projects are in process and are still in accordance with the plan," said SKK Migas Deputy Operations Julius Wiratno.

    In the midst of the economic situation that has not yet recovered due to the Covid-19 pandemic, the realization of these upstream oil and gas projects is able to create new jobs and support the movement of the regional economy. 

    In addition, this project also supports national and regional companies to be able to continue to survive and maintain business continuity. For this reason, his party together with the cooperation contract contractors (KKKS) are trying to accelerate the work on the project which is scheduled for 2022.

"Hopefully something can be accelerated this year, so hopefully the number of onstream projects can exceed this year's target and support an increase in production next year," said Julius.

    This has been facilitated by the development of the Integrated Operation Center (IOC) facility. With the IOC, it can improve supervision and facilitate operational flexibility to achieve national oil and gas production targets. This is because the IOC allows SKK Migas to carry out 24-hour real-time surveillance.

    His party also anticipates the movement of people and goods in the midst of tightening mobility policies to prevent the spread of the Covid-19 pandemic. This is to ensure the availability of goods or services to support production operations in the field according to the timetable.

"To maintain the smooth mobility of upstream oil and gas goods and workers, we continue to coordinate with related parties so that production operations continue normally," said Julius.

    Acceleration of the vaccination program must also be carried out in line with government programs.

"So, we hope to keep the confirmed cases of Covid-19 under control in upstream oil and gas. SKK Migas also continuously coordinates with KKKS (cooperation contract contractors) to ensure that the health protocols have been implemented as well as possible so that production stops do not occur due to the increasing number of Covid-19 cases," said Julius.

    In the upstream oil and gas environment itself, the rate of increase in confirmed cases of Covid-19 actually tends to be sloping compared to the end of 2020 to the first quarter of 2021. However, his party still anticipates the potential for an increase in cases due to social interactions during Eid al-Fitr yesterday. 

Jambaran Tiung Biru (JTB) gas Project

    Julius added that this year, one of the upstream oil and gas projects included in the national strategic project (PSN), namely Jambaran Tiung Biru (JTB), is scheduled to start operating. 

    He is optimistic that this target can be achieved. Moreover, the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif and the Head of SKK Migas Dwi Soetjipto have directly reviewed the work on this project.

Investor Daily, Page-10, Thursday, July 1, 2021

RESET ONSTREAM SCHEDULE

    The operating schedules of a number of upstream oil and gas projects were forced to be postponed due to the Covid-19 pandemic which still creates uncertainty in the sector. It is hoped that the fulfillment of the needs for the downstream sector will not be disrupted. One of the delays in the operation schedule was the Tangguh Train-3 National Strategic Project (PSN).

Blogger Agus Purnomo in SKK Migas

    Deputy for Special Task Force Operations (SKK Migas) Julius Wiratno said the completion of the project would miss the target in the fourth quarter of 2021 to next year.

    According to him, at the beginning of this year, the project had been suspended for 3 months due to the spread of Covid-19. To resume the project, it will take longer.

“Probably around mid-2022. We are currently doing a schedule and risk analysis. We'll see if it can be fixed," he said.

    Based on SKK Migas records as of March 26, 2021, the progress of the Tangguh Train-3 onshore project in Papua still reached 89.58% or lower than the target, which was 96.21%. Meanwhile, the offshore project work on Tangguh Train-3 has reached 99.19% of the target that should have been 100%.

the Jambaran-Tiung Biru (JTB) gas project

    In addition to the Tangguh Train-3 project, a scheduled shift has also occurred in the Jambaran-Tiung Biru (JTB) gas project. Julius said the ongoing Covid-19 pandemic coupled with the second wave which worsened conditions at home made the project. SKK Migas will oversee these projects so that they can be completed by the end of the year.

“The JTB project has been pushed back from August to November or December 2021 onstream. There is still uncertainty because of this Covid," he said.

    Overall, to date, SKK Migas has successfully completed seven upstream oil and gas projects from the target of 12 onstream projects in 2021.

    Investments in the seven projects were recorded at US$ 1.45 billion and provided additional production of 9,850 barrels of oil per day (bopd) and 474.5 million cubic feet of gas per day (MMscfd).

    The seven upstream oil and gas projects that are already onstream are EPF Belato2 Seleraya Merangin Dua, EOR Jirak Pertamina EP, KLD PHE ONWJ, Gas Supply to RU-V Pertamina Hulu Mahakam, West Pangkah Saka Indonesia Pangkah Ltd, Merakes Eni East Sepinggan, and North Area Jindi. South Jambi Block B.

Eni

    Meanwhile, in line with upstream oil and gas activities and the tightening of government policies to implement efforts to prevent the Covid-19 pandemic, the upstream oil and gas business is also taking anticipatory steps in order to continue to achieve the target. One of the anticipatory measures taken is the acceleration of the vaccination program which is carried out together with government programs.

"SKK Migas also continuously coordinates with KKKS to ensure that the health protocols are implemented as well as possible so that production does not stop due to the Covid-19 case," he said.

    Julius added that the movement of people and goods needs to be added to ensure the availability of goods or services to support production operations on time.

"We are working on accelerating projects launched in 2022. Hopefully, something can be accelerated this year, so hopefully, the number of projects that can onstream can exceed this year's target and support an increase in production next year," he explained.

    Energy Director Watching Mamit Setiawan assessed that the delay in the streaming schedule for oil and gas projects was not entirely the fault of the contractor.

"The contractors must have made changes to their plans from last year with the hope that the pandemic can subside this year and fabrication activities can operate normally in manufacturing companies, but it seems that it failed to meet the target," said Mamit.

    However, he hopes that the preparation of the goods will not take too long, especially if the project is a PSN. Especially for JTB, it doesn't really matter if the project is planned. Surprisingly, the demand for gas for the industry in East Java currently tends to below.

    Executive Director of the National Oil and Gas Company Association (Aspermigas) Moshe Rizal assessed that the Covid-19 pandemic had indeed caused a lot of uncertainty. Moreover, there is a policy to make it difficult for KKKS to achieve the required productivity.

“It's really difficult because of the number of personnel in the field and travel restrictions. This all hampers productivity. Although the goods are available but not optimal, "he said.

OIL AND GAS INVESTMENT

    Meanwhile, the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources stated that investment in the upstream oil and gas sector is still below the target.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said the Covid-19 pandemic had a major impact on the domestic oil and gas industry. This causes oil and gas investment to be slow. Meanwhile, this year's investment in the upstream oil and gas sector is targeted at US$12.4 billion. He said that until June 2021, the realization of the investment was less than half of the target.

"In this month or May-June 2021, upstream oil and gas investment is 25.52 percent of the 2021 target," he said.

    Tutuka said the government continues to strive to improve services and ease of doing business in the domestic upstream oil and gas sector. He said the government had issued a number of regulations that would support this facility.

    He explained that the government had made a policy to increase the use of domestic products in upstream oil and gas activities, namely the Minister of Energy and Mineral Resources Regulation No. 15 of 2013, and the Minister of Energy and Mineral Resources Regulation No. 14 of 2019, as well as the Minister of Energy and Mineral Resources Regulation No. 17 of 2018.

"The oil and gas sector is one of the natural resources that is multifunctional and plays a major role in the country and contributes to the growth of national income," said Tutuka.

Bisnis Indonesia, Page-4, Thursday, July 1, 2021

2030, Pertamina Supply 71% of National Energy Needs

    PT Pertamina (Persero) targets to supply around 71% of Indonesia's total energy needs in 2030 which is predicted to reach 7 million Terajoules (TJ). To that end, the company is moving towards a clean energy transition by increasing the supply of new and renewable energy to reach 17 percent of the total energy mix in 2030.

    Pertamina's Director of Strategy, Portfolio and Business Development Iman Rachman said Pertamina was in the process of moving towards an energy transition. Pertamina's energy portfolio will be aligned with the energy mix target in the National Energy Grans Strategy (GSEN) 2025. Most of the energy supplied by Pertamina is still in the form of fossil fuels, but the growth of renewable energy supply will be more aggressive.

"With this strategy, by 2030, Pertamina will supply around 71 percent of Indonesia's total energy needs," he said.

    Pertamina's energy mix target is to reduce the use of fuel oil and liquefied petroleum gas/LPG to 64%. At the same time, gas consumption will be increased to 19% and new and renewable energy to 17% of the total energy mix by 2030.

"In order to achieve the energy mix target, Pertamina will build an integrated oil and gas supply chain and actively build a new renewable energy portfolio by utilizing domestic resources," said Iman.

    Pertamina has made the energy transition because the world is facing a significant demand disruption due to Covid-19, both in the short and long term. Global fossil energy demand is predicted to continue to grow and reach its peak in 2030. However, after that, the demand for fossil energy will decrease along with the rapid growth of new and renewable energy.

    In Indonesia, energy demand is projected to recover after Covid-19 in 2022 and then grow by around 2.1% per year until 2040. Nationally, the energy mix will support emission reductions with a target of 29% in 2030 while still meeting national energy needs that reach 7 million Terra Joules.

Need Investor

    With this business initiative, Pertamina will allocate around 9% of the capital expenditure for the 2020-2024 period specifically for the development of new and renewable energy. This capital expenditure is higher than the investment in new and renewable energy of international energy companies which is only 4.3% on average. 

    A number of Pertamina projects include National Strategic Projects, both in the upstream, downstream, and renewable energy sectors. These projects have the potential to be collaborated to strengthen the foundation of the national economy.

"Other partnership opportunities can also be carried out in Pertamina's strategic projects and plans for unlocking values ​​in order to optimize the value of Pertamina Group," said Iman.

    Some of the activities that can be carried out with these partners include various efforts to increase Pertamina's oil and gas production, projects to repair and increase the capacity of a number of existing refineries, as well as the construction of green refineries, petrochemical plants with a capacity of 6-100 kilotonnes per annum / KTPA, and ethanol plants of 50 metric tons. per year by 2025.

    Pertamina is also involved in Indonesia Battery Holding (IBH) to produce 140-gigawatt hour (GWh) batteries by 2029 and develop an electric vehicle battery ecosystem, including the battery exchange and recharges business. Other projects are the construction of new gas transmission and distribution pipelines and the construction of a methanol plant for gasification of 1,000 KTPA by 2025.

    Other energy transition initiatives carried out by Pertamina are revitalizing business plans related to city gas for 30 million people's homes, developing businesses, and liquefied natural gas/LNG, as well as increasing the portfolio in the electricity sector through gas, geothermal and solar power plants.

Cooperate with Sonatrach

    PT Pertamina (Persero) and Sonatrach, an oil and gas company owned by the Algerian Government, have signed a memorandum of understanding/MoU for upstream to downstream business cooperation, including renewable energy.

Nicke Widyawati 

    Pertamina President Director Nicke Widyawati said, in the midst of the Covid-19 pandemic crisis, national oil companies such as Sonatrach and Pertamina must remain strong in meeting national interests, especially in providing energy for the country. The signed MoU will cover the potential for collaboration in upstream and downstream businesses.

    First, this cooperation covers exploration and production activities in Algeria and other countries. Next, evaluate the supply of Pertamina's Smooth Fluid (SF-05) as a drilling fluid in the upstream operation of Sonatrach. Then, evaluate the supply and shipment of crude oil and liquefied petroleum gas/LPG from Sonatrach to Pertamina. Lastly, the potential for other cooperation in the downstream business in Algeria, as well as oil and gas services.

"The MoU also includes potential cooperation in the field of renewable energy, particularly solar photovoltaic, as well as research and development activities," said Nicke Widyawati.

    She hopes that the work teams from the two companies can follow up the agreement with discussions or workshops so that they can produce real progress and creative solutions in facing the challenges ahead. In addition, Nicke also hopes that Sonatrach can support Pertamina's operational expansion plans and programs in Algeria in the future.

"I firmly believe that this memorandum of understanding will be the doorway to achieving our goals, and strengthening the relationship between the two companies, and most importantly, the strong bond between Indonesia and Algeria," said Nicke.

    Sonatrach President Director Hakkar Toufik said this signing was a good cooperative relationship. Because, in this agreement, there are new investment opportunities for both parties. So he hopes that this MoU can strengthen the two companies.

Investor Daily, Page-10, Wednesday, June 30, 2021.

The Government will Facilitate the Acquisition of Oil and Gas Blocks Abroad

    The Ministry of Energy and Mineral Resources (ESDM) stated that it would facilitate the acquisition of oil and gas blocks overseas by oil and gas companies in Indonesia. The acquisition of oil and gas blocks in other countries is one of the government's strategies to pursue the oil production target of 1 million barrels per day (BPD) by 2030.

    Director of Oil and Gas Program Development at the Ministry of Energy and Mineral Resources Dwi Anggoro Ismu Kurnianto said the oil production target of 1 million BPD in 2030 has been included in the Grand National Energy Strategy (GSEN) where the National Energy Council (DEN) is finalized.  

    One solution to achieve this target is the acquisition of oil and gas fields abroad. This acquisition was carried out through PT Pertamina (Persero) as a State-Owned Enterprise (BUMN) engaged in the oil and gas sector of national oil and gas companies, such as PT Medco Energi Internasional.

"The government will facilitate through bilateral cooperation, starting with G to G (government to government)," he said.

    The acquisition plan was also conveyed at the 1st Meeting of the Joint Committee on Energy between the Ministry of Energy and Mineral Resources and the Moroccan Ministry of Energy, Mines, and Environment.

    

Blogger Agus Purnomo in SKK Migas

    In this event, representatives of Pertamina and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) were also present so that they could obtain opportunities for cooperation in the oil and gas sector. However, Dwi Anggoro added, that the government's support for the acquisition of this oil and gas block is not limited to Morocco.

"Not only in Morocco but also in other countries," he said.

    Both Pertamina and Medco Energi have also been expanding their upstream oil and gas business overseas. Pertamina has several oil and gas blocks in 12 countries. In Algeria, the company owns shares in the Menzel Lejmat North (MLN), El Merk (EMK), and Ourhoud (OHD) blocks. apart from Algeria. 

    In Iraq, Pertamina holds shares in West Qurna 1 Field. While in Malaysia, Pertamina holds shareholdings in Block K, Block Kikeh, Block SNP, Block SK-309, and Block SK-311.

    Furthermore, after the acquisition of the French oil and gas company, Maurel & Prom, the company has oil and gas assets spread across Gabon, Nigeria, Tanzania, Namibia, Colombia, Canada, Myanmar, Italy, and other countries. However, its main assets that are already producing are in Gabon, Nigeria, and Tanzania. These overseas oil and gas blocks have contributed to Pertamina's overall production which reached 861 thousand barrels of oil equivalent per day/BOEPD in the first quarter of 2021.

    President Director of PT Pertamina Hulu Energi (PHE) Budiman Parhusip had said, the contribution of the realization of this oil and gas production was 147 thousand BOEPD from international oil and gas fields and 713 thousand BOEPD from domestic. In detail, oil production from foreign assets was recorded at 97 thousand bpd and gas 291 MMScfd.

    Meanwhile, on its official website, Medco owns shares in 10 oil and gas blocks overseas. In detail, Blocks 10 and 12 in Mexico, Area 47 in Libya, Block 9 in Yemen, Karim Field in Oman, Blocks 1 and 4 in Tanzania, Bualuang, and Sinphuhorm Fields in Thailand, and Block 12W (Chim Sao and Dua) ​​in Vietnam.

    Some of Medco's oil and gas blocks are already in production. In the first quarter of 2021, Medco's total oil and gas production, both from within and outside the country, was recorded at 101 thousand BOEPD. Dwi Anggoro continued, based on the status at the end of 2020, Indonesia's oil reserves were recorded at 4.2 billion barrels and 62.4 trillion cubic feet of gas. 

    If there are no new discoveries, the age of this oil reserve is only about 9 years and gas about 18 years. To meet domestic demand which reaches 1.5 million bpd, Indonesia is forced to import oil because domestic production is only around 745 thousand bpd.

    However, he said the government would not only rely on additional production from abroad. Although oil production continues to decline, the government will continue to focus on achieving the production target of 1 million bpd with various efforts, including enhanced oil recovery (EOR), increasing exploration activities, utilizing new technology, as well as simplification and flexibility of the procurement process.

Infrastructure development

    In addition to increasing oil and gas production, the government also continues to build oil and gas infrastructure to strengthen national energy security. The government will increase the capacity of fuel oil refineries and build natural gas infrastructure.

“The government encourages the development of national oil and gas infrastructure, both LNG, gas, and refineries. Therefore, we are very open to collaborating with any partner countries in investing in the oil and gas sub-sector,” he said when giving a presentation at the 1st Meeting of the Joint Committee on Energy between the Ministry of Energy and Mineral Resources and the Moroccan Ministry of Energy, Mining and Environment.

    Regarding the development of natural gas infrastructure, Indonesia has prepared a national natural gas master plan, including building PLTMG, gas pipeline infrastructure, and natural gas networks for households. Especially for the gas network, by 2020 696,011 house gas connections (SR) have been built.

"The government targets that by 2024, the number of gas networks built will reach 4 million SR," added Dwi Anggoro.

Investor Daily, Page-10, Tuesday, June 29, 2021.

PLN Take Over Electricity Block Rokan and INCO

    The development of the Cogen PLTGU auction process in the Rokan Block and the provision of electricity for the PT Vale Indonesia Tbk (INCO) smelter began to be revealed. The latest news is that PT Perusahaan Listrik Negara (PLN) is preparing to acquire 100% of Cogen's PLTGU shares in the Rokan Block and provide electricity for the INCO smelter.

the Rokan Block Chevron

    PLN's Director of Commerce and Management, Bob Saril said, PLN would acquire the Cogen PLTGU with a capacity of 300 MW owned by a subsidiary of Chevron Standard Limited named PT Mandau Cipta Tenaga Nusantara (MCTN).

"We are in the process of taking over 100% of the shares (PLTGU Cogen). If the value has not been announced, we can convey," he said.

    In 1990, MCTN built the plant with an investment of around US$ 120 million. However, currently, in the auction process by MCTN, the value is said to reach US$ 300 million. "There are funds for the acquisition (PLTGU Cogen)," said Bob.

    PLN's management is currently in the negotiation process with Chevron Standard Limited (CSL), which is the parent of MCTN. In fact, PLN claims to have succeeded in reaching agreements regarding the provisions of the conditional share purchase agreement (CSPA). "There will be a share purchasing agreement, we can sign it in the not too distant future," he said.

    Bob confirmed that by the end of June there should be certain regarding the acquisition process. This week, MCTN will announce the results of the auction. "If you look at the auction process or the sale of shares, they (MCTN) will announce this week. Then they have one month to wait if there are questions from outside. After that, we will sign," said Bob.

    Not only the power plant in the Rokan Block, but PLN has also signed an agreement with PT Vale Indonesia Tbk to provide electricity for the smelter that needs to be built. Bob said that PLN had signed a non-disclosure agreement (NDA) with INCO in May 2021. 

    PLN is currently in the discussion stage of data sharing and information regarding the construction of the INCO smelter in Sulawesi. However, so far there has been no memorandum of understanding (MoU) or transaction agreement agreed or signed between the two.

"(However) it is already in the stage of detailed discussion in that direction," said Bob.

    Similar to the Cogen PLTGU, Vale's PLTGU with a capacity of 500 MW is also undergoing an auction period which is being followed by Medco-Pertamina Power, Golar-Equinox, and Tripatra-BP. 

"PLN is optimistic that it can compete with other parties to be appointed as the party trusted to supply INCO's smelter electricity," said Bob.

    If successfully appointed, PLN will connect the INCO smelter to the Southeast Sulawesi and Central Sulawesi electricity systems. If necessary, PLN is also ready to relocate the PLN's Gas and Steam Power Plant (PLTGU) on the island of Java. According to Bob, this option will not interfere with the reliability of the electricity supply in Java. This is because the reserve power available in Java-Bali is still large, which is around 45% of the peak load.

Kontan, Page-13, Thursday, June 24, 2021

PLN Optimistic to Win MCTN Majority Share Auction Worth US$ 300 Million

    PT PLN (Persero) is optimistic that it will win the auction of PT Mandau Cipta Tenaga Nusantara (MCTN) shares which are offered at a price of US$ 300 million. MCTN is the operator of the North Duri Cogen (NDC) Gas Power Plant (PLTG) which supplies electricity and steam to support oil production in the Rokan Block. This acquisition follows the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR).

PT Chevron Pacific Indonesia (CPI)

    PLN's Director of Commerce and Customer Management Bob Saril said that the process of acquiring a 95% stake in MCTN of PT Chevron Standard Limited (CSL) in MCTN is still in the negotiation process. However, his party has reached an agreement regarding the sound of the articles in the conditional sales purchase agreement (CSPA). Winners will be announced this week.

"We are coordinating the negotiations, hopefully in the not too distant future we will close, we will get PLN's 100% MCTN shares," he said in a statement.

discussion of Power Supply Reliability Keeps Rokan Block Production.

    He explained, because it is the acquisition of share ownership, later MCTN will become a subsidiary of PLN. This means that there will be no change in operator from PLTG NDC so that it will continue to operate normally when there is a transfer of management of the Rokan Block to Pertamina in August. 

the Rokan Block Chevron

    After the announcement of the winner of the stock auction, there will be a grace period of one month. However, it is certain that the acquisition of MCTN shares can be completed before the transfer of management of the Rokan Block takes place.

“From August 8 to August 9 [MCTN] will take place as usual. A week or even before that, the share shares have been taken by [PLN], as well as the business license has been referred to PLN, “said Bob.

PT Pertamina Hulu Rokan (PHR)

    He hopes that the government can provide support related to the required permits. As for the other two power plants, namely PLTG Minas and Central Duri, he said that PT Pertamina Hulu Rokan (PHR) will still be managed in the next year. After that, his party hopes that these two power plants can also enter the PLN system so that they can be renewed. PLTG NDC will also be updated by his party.

"So this 400 MW can be managed by PLN," he said.

    For the long term, his party will supply electricity to the Rokan Block from the Sumatra Electricity System. This will make the electricity supply more reliable and efficient than if only relying on PLTG. Moreover, the electricity reserve (reserve margin) of the Sumatra System has reached 35-40%. 

    The Rokan Block's electricity supply will come from three sources, namely from the New Garuda Sakti Transmission-Balai Pungut 290 MW, the Duri Transmission-Balai Pungut 240 MW, and the Balai Pungut Generator 250 MW. In addition, PLN will equip it with high-voltage (TT) compensator facilities and a 5x100 MW converter. All of these facilities will be operational within the next three years in 2024.

"So if a power plant goes out of the system or is under maintenance, the electricity supply remains as it is," explained Bob.

    In addition to the electricity supply, Bob also emphasized that his party will guarantee the supply of steam to the Rokan Block. His party will supply the steam needs of 335 thousand barrels of steam per day/ BSPD using a new steam generator which is also targeted to operate in the next three years. 

    PT Pertamina Hulu Rokan (PHR) Business Support Project Leader Danang Ruslan Saleh said the Rokan Block operation requires a supply of 400 MW and 335,000 BSPD of steam. Around 270 MW or 60-70% of electricity supply so far comes from PLTG NDC. Likewise, the steam supply of 70 thousand BSPD or 70-80% of the total demand also comes from this facility. The continuity of this supply will determine the Rokan Block's oil production.

"But we are now with a Production Sharing Contract / PSC gross split, so we are required to be very efficient, including in the supply of electricity, steam, and gas," he said.

    Pertamina is said to be committed to continuing to boost oil production in the Rokan Block. A number of programs have been prepared by his parties, such as infill drilling and water floods. So that, in the future, the Rokan Block can still be the main contributor to national oil production.

"We are working massively and aggressively to increase the Rokan Block's oil production," said Danang.

    PLN and PT Pertamina Hulu Rokan (PHR) have also signed the Electricity and Steam Sales and Purchase Agreement (SPJBTLU) on February 1, 2021. This SPJBTLU will come into effect in August 2021.

Investor Daily, Page-10, Wednesday, June 23, 2021

PLN is getting more and more sure to enter the Rokan Block

    The certainty of PT PLN (Persero) to become the electricity supplier in the Rokan Block after the transfer of management process is increasingly clear. The state-owned company is currently in the final stages of negotiating the acquisition of a gas-fired power plant owned by PT Mandau Cipta Tenaga Nusantara (MCTN).

PT PLN (Persero)

    Director of Commerce and Customer Management at PLN Bob Saril said that the company had reached an agreement regarding the provisions in the Conditional Share Purchase Agreement (CSPA) to purchase shares of the North Duri Cogen MCTN 300 MW Steam Power Plant (PLTGU), which is 95% owned by Chevron Standard Limited ( CSL), an affiliate of PT Chevron Pacific Indonesia (CPI). It is hoped that shortly, PLN will be able to own 100% of PT Mandau Cipta Tenaga Nusantara (MCTN) shares.

Chevron 

“Now we are in the process of negotiating with Chevron Standard Limited (CSL) directly. This morning we have succeeded in reaching agreements with several articles of the CSPA and later there will be a share purchasing agreement that we can sign in a short time, not too long,” said Bob.

    Meanwhile, communication regarding the acquisition of Chevron Standard Limited (CSL) shares in MCTN by PLN has been carried out since November 2020. Based on the explanation given by Bob, PLN targets the acquisition process to be completed by the end of June 2021. He stated that in the process of acquiring this share, the company was assisted by experienced consultants.

“If you look at the scheme for their auction process or selling these shares, they will announce it this week. Then, they have 1 month to wait if there is a question from outside. After that we signed it,” said Bob.

    He also guaranteed that the acquisition of the power plant owned by MCTN would not disrupt the electricity supply in the Rokan Block. PLN will utilize the 300 MW North Duri Cogen MCTN PLTGU to provide electricity services to the Rokan Block during the transition period.

the Rokan Block Chevron

"We don't have to worry about whether during the transition there will be electricity supply disruptions and so on. The shares were taken over by PLN, including the employees who automatically become part of PLN," he said.

    Thus, Bob ensures that the process of transferring the management of the MCTN power plant will run smoothly.

“On August 8 to 9, [the electricity supply] will automatically start as usual because before that, maybe a week earlier, the shares had been taken over. Likewise, the next follow-up is that business permits have been submitted to PLN, we have no more problems,” said Bob.

PT Pertamina Hulu Rokan (PHR)

    Meanwhile, PLN has signed a Sales and Purchase Agreement for Electricity and Steam (SPJBTLU) with PT Pertamina Hulu Rokan (PHR) for the Rokan Block in February which will be effective at the end of the Rokan Block management by CPI in August 2021.

    The PLN electricity supply service period is divided into two, namely a transition period of only 3 years starting from August 2021 to August 2024 and permanent services will be provided starting August 8, 2024.

    During the transitional service period, PLN will utilize the PLTG North Duri Cogen MCTN, while permanent services are carried out by interconnecting the electricity system in the Rokan Block with the Sumatra electricity system.

    Meanwhile, President Director of PT Pertamina Hulu Rokan (PHR) Jaffee Arizon Suardin said that the availability and reliability of electricity and steam supply were very important to support efforts to increase production in the Rokan Block.

"We are very happy that last February we signed a cooperation agreement on the sale and purchase of electricity and steam with PLN, so hopefully we can continue to carry out this cooperation," said Jaffee.

    PHR Business Support Project Leader Danang Saleh added that the Rokan Block is one of the backbones of national oil production which contributes around 170 Mbopd or 24% of national oil production. Therefore, its management requires the support of reliable electricity and steam supplies with a demand of 400 MW and 335 Mbspd of steam.

    Meanwhile, the Rokan Block's electricity needs are currently supplied by MCTN's 300 MW NDC plant and supported by PLTG Minas and Central Duri 130 MW which are managed by PT Pertamina Hulu Rokan (PHR) through a third party.

“Approximately 60%-70% of this NDC plant will supply 270 MW of what we need a total of 400 MW. So is the steam. This is a large portion, so there is a great hope that the provision of electricity and steam from PLN can be realized properly," said Danang.

CONTINUOUS PRODUCTION

    Professor of the Faculty of Engineering, University of Indonesia Iwa Garniwa said that the electricity sector in the Rokan Block became an important issue because it involved the sustainability of oil production in the Rokan Block. Therefore, the control of existing power plants, either through the purchase of power plants or through a power purchase contract, is key.

"If this existing power plant is not controlled by [PLN], then the Rokan Block will be very difficult," said Iwa.

    Meanwhile, PLN takes approximately 3 years to build a transmission from the Sumatra system to meet the electricity needs of the Rokan Block in the long term. Therefore, until the transmission is built, whether or not PLN will have to use the existing power plants.

    He also recommended that PLN conduct an audit of electrical installations starting from generation, transmission, and distribution to know the condition of existing power plants, including the BPP.

"The conditions of the generator, transmission, and distribution have met the requirements, but whatever the new owner must be, the supply constraints will be met because this is related to the products that will be made by Pertamina," he said.

    Energy Watch Executive Director Mamit Setiawan hopes that the negotiation process carried out by PLN in acquiring the MCTN power plant can be mutually beneficial and will not burden PLN's finances later.

"Don't let PLN make too big a sacrifice in the sense of buying too large shares and eventually burdening PLN's finances. If you buy expensive, while PLN already has SPJBTLU with PT Pertamina Hulu Rokan (PHR), then PLN will lose. The price with this PT Pertamina Hulu Rokan (PHR), of course, has been kept, "said Mamit.

Blogger Agus Purnomo in SKK Migas

    Regarding the Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Julius Wiratno explained that the progress of the transition process for Rokan's work area is still ongoing according to the target.

"One of the priorities is to conduct development drilling to increase production, of which 73 wells have been drilled and have increased production," he said.

    Julius added that Chevron is trying to increase the number of rigs and long-lead items needed for well drilling activities in the Rokan Block to curb the decline in production during the transition period.

Bisnis Indonesia, Page-4, Wednesday, June 23, 2021

73 Wells Have Been Drilled

    Less than 2 months before the transfer of management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR), a total of 73 wells have been drilled during the transition period.

Blogger Agus Purnomo in SKK Migas

    Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Julius Wiratno explained that the progress of the transition process for Rokan's work area was still progressing according to the target.

"One of the priorities is to carry out development drilling to increase production, which currently has reached 73 wells that have been drilled and increase production," he said.

Chevron

    Julius added that Chevron is trying to increase the number of rigs and long-lead items needed for well drilling activities in the Rokan Block to curb the decline in production during the transition period.

 

the Rokan Block 

    He also stated that all preparations from PT Pertamina Hulu Rokan (PHR) had been carried out. Thus, Pertamina is ready to carry out the transfer of management on August 9, 2021.

"Many programs such as the procurement of additional drilling rigs and offering employment are already around 100% completed," he explained.

PT Pertamina Hulu Rokan (PHR)

    Previously, President Director of PT Pertamina Hulu Rokan (PHR) Jaffee A. Suardin said that one of the activities currently underway is the mirroring process for existing contracts which has reached 95% or 276 contracts out of 290 contracts.

"The process of procuring goods and services at PHR for the Rokan block is carried out by several methods, namely mirroring for existing contracts at PT Chevron Pacific Indonesia (CPI) and new procurement for contracts that are not yet in PT Chevron Pacific Indonesia (CPI) or mirroring cannot be done," he said.

PT Chevron Pacific Indonesia (CPI)

    Apart from mirroring existing contracts and new procurements, there are also contracts through the Local Business Development (LBD) program. Currently, there are 260 LBD contracts that will be processed separately involving around 690 LBD partners. LBD phase 1 socialization was carried out at the end of last May and it is hoped that in the 3rd or 4th week of June the contract can be realized.

"PT Pertamina Hulu Rokan (PHR) will also evaluate opportunities to expand the involvement of the surrounding community by involving Village-Owned Enterprises (BUMdes)," he said.

Bisnis Indonesia, Page-4, Tuesday, June 22, 2021

Maintain Production of Rokan Block Pertamina Agrees on 65 BBTUD Gas Supply

    PT Pertamina Hulu Rokan (PHR), a subsidiary of PT Pertamina Hulu Energi, signed two memorandums of understanding/MoU on gas supply of 65 billion British thermal units per day/BBTUD for the Rokan Block. The gas supply will be used in operations to maintain the production stability of the block.

The Tokan Block By Chevron

    The first MoU signed was with PetroChina International Jabung Ltd (PIJL) for gas supply for steam flood operations in the Rokan Block of 50 BBTUD, estimated to start flowing in 2023. The steam flood operation is an enhanced oil recovery/EOR activity for oil production in the Duri Field, Rokan Block.

Repsol 

    The second agreement with Repsol Sakakemang BV is 15 BBTUD. This supply is to fulfill gas needs for the operational needs of the Rokan Block after the handover of operations from PT Chevron Pacific Indonesia (CPI) on August 9, 2021.

PT Chevron Pacific Indonesia (CPI)

    Regarding the MoU with Repsol, Pertamina Hulu Energi President Director Budiman Parhusip said it would be valid for two years. This agreement will be the basis to conduct discussions and studies on the possibility of utilizing the potential supply of gas from the Sakakemang Block to fulfill gas needs in the Rokan Block.

"This gas sale and purchase activity can be carried out after PHR and Repsol Sakakemang BV have obtained an approval letter for gas allocation from the Government of the Republic of Indonesia," said Budiman.

PetroChina

    The same applies to the MoU with PetroChina Jabung. President Director of PT Pertamina Hulu Energi Jabung Taufik Adityawarman said that the gas supply would be used starting February 27, 2023, and was valid for one year. However, the realization of this gas supply is still waiting for the government's decision regarding the production sharing contract/PSC of the Jabung Block which ends on February 26, 2023.

"But that was after the seller signed the new Jabung Block cooperation contract with the Government of the Republic of Indonesia," explained Taufik.

    At the same time, the process of managing the Rokan Block continues. One of them is the existing contract mirroring process, which currently has reached 95% or 276 contracts out of a total of 290 contracts.

"The process of procuring goods and services at PHR for the Rokan block is carried out using several methods, namely mirroring for existing contracts at CPI and new procurement for contracts that do not yet exist in CPI or mirroring," said Pertamina Hulu President Director Rokan Jaffee. A Suardin.

    In addition, the procurement of PT Pertamina Hulu Rokan (PHR) is also through the Local Business Development (LBD) program. Currently, 260 LBD contracts will be processed separately involving around 690 LBD partners. The first stage of LBD socialization was carried out at the end of May and is in the process of contracting for the remainder of this month. PHR continues to seek to expand the involvement of the surrounding community.

Investor Daily, Page-9, Saturday, June 19, 2021