Electricity Supply for Rokan Block, PLN Officially Acquires MCTN Shares

    PT Perusahaan Listrik Negara (PLN) (Persero) officially acquired 100% shares of PT Mandau Cipta Tenaga Nusantara (MCTN) which is owned by Chevron Standard Limited. 

    This acquisition is proof of PLN's commitment to maintaining the continuity of the Rokan Block electricity supply, both during the transition period and in the long term. Moreover, the Rokan Block is the backbone of national oil production.

The Rokan Block Chevron

    The acquisition process was marked by the signing of a sales and purchase agreement (SPA) by the Director of Commerce and Customer Management of PLN, Bob Sariel, and Regional Director of Chevron Standard Limited, Jennifer Ferratt, online.

Director of Chevron Standard Limited, Jennifer Ferratt

    This agreement was also witnessed by Minister of Energy and Mineral Resources Arifin Tasrif, Deputy Minister I of BUMN Pahala Nugraha Mansury, Head of SKK Migas Dwi Soetjipto, President Commissioner of PLN Amien Sunaryadi, President Director of PLN Zulkifli Zaini, and the management of Chevron Standard Limited as the majority shareholder of MCTN.

Blogger Agus Purnomo in SKK Migas

    Zulkifli said that the acquisition of the MCTN shares is proof of PLN's commitment to maintaining the continuity of the Rokan Block electricity supply, both during the transition period and in the long term. Moreover, the Rokan Block is the backbone of national oil production.

the Rokan Block Chevron

    As is known, the management of the Rokan Block from August 9, 2021, will shift from PT Chevron Pacific Indonesia (CPI) to PT Pertamina Hulu Rokan (PHR). So far, the electricity and steam supply for the Rokan Block comes from the North Duri Cogen Gas Power Plant (PLTG) with a capacity of 300 Megawatts (MW) which was previously owned by MCTN, a subsidiary of Chevron Standard Limited (CSL).

PT Chevron Pacific Indonesia (CPI)

"We would like to thank Chevron Standard Limited (CSL) for the good cooperation and for the good electricity in the Rokan Work Area as long as it is managed by Chevron Pacific Indonesia," said Zulkifli virtually in Jakarta.

    The acquisition of MCTN shares is a follow-up to the cooperation agreement between PLN and PT Pertamina Hulu Rokan (PHR) which was included in the Memorandum of Understanding (MOU) for the Provision of Electricity and Steam for the Rokan Region on December 30, 2020, and the Sale and Purchase Agreement for Electricity and Steam on January 29, 2021.

    Zulkifli hopes that, through the signing of the sale and purchase of shares, a good partnership can be established as the first step in building partnerships and cooperation between PLN and Chevron Standard Limited (CSL) in the future. 

    In the future, this power plant will be used for three years to serve electricity needs in the Rokan Block. Both during the transition period together with PLTG Migas and Central Duri until finally it will be supplied from the Sumatra interconnection system.

“In the long term, reliable and competitive supply of 400 MW of electricity in the Rokan Block will be supplied from the Sumatra and 335 MBSPD Steam system using the New Steam Generator. Within 3 years the interconnection of the system and the New Steam Generator will be fully operational," he added.

    In addition, the provision of reliable electricity supply from the Sumatra System to the Rokan Block is carried out from three sources.

"PLN prioritizes aspects of safety, reliability, quality, and efficiency in meeting the energy needs of the upstream oil and gas industry," he said.

    PLN as a BUMN that is given the mandate in the electricity sector, has an obligation to meet electricity needs and provide the best service for all customers, including industrial customers, one of which is the oil and gas sector, both from upstream and downstream.

“PLN as the most experienced electricity provider in Indonesia has a special design and strategy in providing electricity for the oil and gas industry. Currently and in future plans, PLN's large systems such as Java, Sumatra, Kalimantan, and Sulawesi have a very large reserve margin (40-50%) to be able to serve the needs of the oil and gas industry," said Zulkifli.

    Regional Director of Chevron Standard Limited, Jennifer Ferratt said, with the completion of this process, it is hoped that the transition at MCTN can take place smoothly and in line with the transition of the Rokan Block to PT Pertamina Hulu Rokan (PHR).

    Minister of Energy and Mineral Resources Arifin Tasrif added that the Rokan Block has huge potential for oil reserves. Therefore, to be able to provide maximum benefits for the country, a good strategy is needed. With this agreement, PLN will continue to use the North Duri Cogen PLTG before the Rokan WKB electricity supply is supplied by the Sumatra system interconnection network.

“PLN must ensure a guaranteed electricity supply for the Rokan Block so that Pertamina is able to maintain the sustainability of the production of 25% of the national oil. Therefore, power plants must be reliable with more efficient costs, so that they can provide much better benefits for the nation and state," he said.

    The Deputy Minister of State-Owned Enterprises, Pahala Nugraha Mansury, also appreciated PLN and CSL for successfully completing the transfer of ownership of MCTN. He also hopes that the transition process in this one month can go hand in hand with the Rokan working area from Chevron to Pertamina smoothly.

“The Rokan Block is very strategic for Indonesia because it produces 25% of the national oil production. So far, the majority of electrical energy has been supplied by MCTN's power plants. So this agreement is very important to ensure the electricity supply for the Rokan Block in the future," he added.

Support Pertamina's Production

    Meanwhile, Pertamina expressed its appreciation for the signing of the SPA to fulfill the electricity needs of the Rokan Working Area (WK).

PT Pertamina Hulu Rokan (PHR)

"Pertamina appreciates the agreement process between Chevron Standard Limited and PLN related to efforts to meet the electricity needs for Rokan WK," said PT Pertamina Hulu Rokan (PHR) President Director Jaffee A. Suardi.

    Furthermore, Jaffee added that this commitment will certainly strengthen Pertamina's position, in this case through PT Pertamina Hulu Rokan (PHR), to ensure the continuity of production of the Rokan Oil and Gas Block Working Area, which of course contributes significantly to national oil and gas production.

Investor Daily, Page-10, Wednesday, July 7, 2021

Increase Investment, Ministry of ESDM Continues to Improve Oil and Gas Data

    The Ministry of Energy and Mineral Resources (ESDM/EMR) continues to improve the subsurface data for oil and gas blocks to attract investment. The reason is that the completeness of the data will increase Indonesia's competitiveness in attracting oil and gas companies to invest in Indonesia.

ESDM

    Head of the Center for Data and Information Technology at the Ministry of Energy and Mineral Resources (EMR/ESDM), Agus Cahyono, said that the ministry has opened access to oil and gas data for potential investors to attract investment. 

    Completeness of data is also the focus of the ministry. One of them is that the data's completeness can make it easier for potential investors to process 2D seismic data into 3D as strong.

"With more complete data, it provides convenience and completeness for potential investors to conduct regional studies," he said during an online discussion on Ease of Investment and Information Services in the Energy and Mineral Resources Sector held by the Ministry of Energy and Mineral Resources (ESDM/EMR).

    Currently, his party continues to collect seismic data from oil and gas blocks throughout Indonesia. However, he admits that there are indeed obstacles related to data processing, especially those that are still stored in round tape form. The success of reading data on the media is fairly low.

“Really have to be careful and have to go back and forth to retrieve data. And this is a lot of round tape data,” said Agus.

    In addition, he said that data improvement could be pursued from the realization of definite Work Commitments (KKP) promised by oil and gas companies when signing the Production Sharing Contract (PSC). KKP funds can now be used to conduct exploration in open areas, not limited to oil and gas blocks operated by oil and gas companies.

    Pertamina Hulu Energi (PHE) has completed a 2D seismic survey along a length of 32,200 kilometers (km). Currently, the resulting data is being processed through Pseudo-3D Seismic Reprocessing. 

Blogger Agus Purnomo in SKK Migas

    SKK Migas noted that there is exploration potential for Deltaic Deepwater Play in the South Makassar Strait Basin, Pre-Tertiary Play in the North East Java-Makassar Strait Basin, and others. This data will also be open to the public in the future.

ENI

    Not long ago SKK Migas also signed an upstream oil and gas exploration cooperation with ENI. With this technology collaboration, SKK Migas hopes to has new oil and gas prospects.

    Regulatory Affairs Committee Indonesian Petroleum Association (IPA) Prana Raditya said oil and gas companies were greatly helped by the government's policy of opening up national oil and gas data. He hopes that the subsurface data on oil and gas blocks can be improved in quality and quantity so that it will increase oil and gas business actors to invest in Indonesia.

“In terms of data, Indonesia is currently competing with other countries. So, the more, complete, and good quality data that can be provided for business actors review, the more attractive Indonesia will be for business actors at home and abroad," he said.

    Thus, the completeness of the data also helps to achieve the target of oil production of 1 million barrels per day (BPD) and gas of 12 billion cubic feet per day by 2030. These data on oil and gas blocks are summarized in the Oil and Gas Data Repository (MDR). 

    Not only data related to oil and gas potential in one area but the MDR is also equipped with supporting data, such as area boundaries, availability of age infrastructure, geological vulnerability, to whether it is included in forest land. Investors can access all the data for free by registering to become a member.

Investor Daily, Page-10, Wednesday, July 7, 2021

Pertagas Optimistic Rokan Pipe Completed On Time

    PT Pertamina Gas (Pertagas), a subsidiary of PT Perusahaan Gas Negara (PGN) Tbk, is optimistic that it will be able to complete the oil pipeline project in the Rokan Block on time in early 2022. This pipeline is needed to keep the Rokan Block oil production stable when its management is transferred to PT Pertamina (Persero) in August.

The Rokan Block Chevron

    Pertagas Communication, Relations & CSR Manager Elok Riani Ariza said, according to government directives, strategic project construction activities must continue, including the construction of the Rokan Oil Pipeline block. His party strives for this national strategic project to be completed on time.

"As of the end of June, the construction progress has reached 71.33%," said Elok.

The Rokan Block Chevron

    The Rokan Block Oil Pipeline has the potential to flow around 200-265 thousand barrels of oil per day (BPD). The project is targeted for commercial operation in stages until it is fully completed in early 2022.

    The North Block, which includes the Balam-Bangko-Dumai Corridor, is targeted to operate in the third quarter of 2021. Then the South Block, namely Minas-Duri, is targeted to operate in the 1st Quarter of 2022. The Rokan Block Pipe Project has a diameter of 4-24 inches. The pipeline consists of 12 segments and three stations, namely Duri Station, Dumai, and Manifold Batang.

    In each pipe segment, there is a pig launcher and receiver including accessories. The pipeline also has a Sectional Break Valve (SBV) in 24 locations, Horizontal Direct Drilling (HDD) in 12 locations, as well as a Leak Detection System for all sections and an Oil Transport & Management System. The pipe is approximately 367 kilometers (km) long and passes through 5 regencies and cities, 14 sub-districts, and 38 villages and sub-districts. Apart from pursuing construction targets, the safety aspect remains Pertagas' main concern.

"The project, which started with first welding on September 10, 2020, has successfully passed 2.18 million safe working hours until June 25, 2021," said Elok.

    To date, the Rokan Oil Pipeline project has recruited 76% of the local workforce of a total of 2,404 workers. This is in accordance with the direction of the Regent of Rokan Hilir Afrizal Sintong when receiving a visit from the Director of Infrastructure and Technology of PGN Achmad Muchtasyar and the Director of Engineering and Operations of Pertagas Rosa Permata Sari at the office of the Regent of Rokan Hilir, City of Bagansiapiapi.

"We hope that this project will have a positive impact on the development of the Riau region in general and be able to contribute significantly to increasing human resource capacity, and transferring knowledge in areas that are passed by the pipeline in particular," said Elok.

    She also hopes that this project can support energy security and contribute positively to improving the national economy. At the same time, the process of managing the Rokan Block continues. Previously, PT Pertamina Hulu Rokan (PHR) stated that the mirroring process for existing contracts has now reached 95% or 276 contracts out of a total of 290 contracts. 

    On the other hand, PT Chevron Pacific Indonesia has completed the PSC termination checklist provisional document on February 25, 2021. In addition, as of May, asset reporting has reached 81%, of which around 109 thousand assets have been physically inspected and reported. While the closing of project reports reached 70% or around 2,940 reports that have been completed.

    Pertamina Hulu President Director Rokan (PHR) Jaffee A Suardin had said that his party was trying to make the transfer of management process run smoothly according to the timeline.

"So that on August 8 and 9, 2021, there will be a seamless management transfer process, without pause, both in terms of operations and support," said Jaffee.

Investor Daily, Page-10, Wednesday, July 6, 2021

PHR Ensures Rokan Block Worker's Transition Runs Smoothly

    PT Pertamina Hulu Rokan (PHR) ensured that the process of transferring the management of the Rokan Block from PT Chevron Pacific Indonesia (CPI) went smoothly. One of the priority aspects is the worker transfer process. PHR has sent an acceptance letter and an employment agreement to all CPI employees.

PT Chevron Pacific Indonesia (CPI)

    As a result, of the 2,700 workers, as many as 98.5% have returned and signed the Work Agreement, and only 1.5% of the workers who did not return it with reasons including because they are nearing retirement age and want to retire early, continue their studies to a higher level of education. height, and other reasons. PHR President Director Jaffee Arizon Suardin welcomed the progress of returning the Acceptance Letter and Employment Agreement by CPI workers.

“Thank you for the positive response given. By joining CPI employees into the Pertamina family, they will have wider career opportunities in the Pertamina Group. I believe, together we can become a solid team, collaborate and synergize to develop the company's business today and in the future to maintain national energy security," said Jaffee.

    Meanwhile, Senior Vice President Rokan Transition CPI Wahyu Budiarto expressed his appreciation to Pertamina and all parties who have supported this process so that the transition went very well.

the Rokan Block Chevron

“The transition in the field of human resources is very important and the most critical in supporting the transfer of management of the Rokan Block. Therefore all steps are prepared together perfectly to achieve a safe, reliable, and smooth transition. Appreciation to Pertamina and all parties who have supported this process so that the transition went very well.” said Revelation.

    PHR has opened a channel of communication for all CPI workers so that all questions can be answered. The channels consist of the Town Hall Meeting which was held online on June 3, 2021 (attended by more than 2000 participants) and June 7, 2021 (attended by more than 2300 participants), Manager Forum on June 9, 2021, which was attended by management levels at CPI. The HC (Human Capital) Corner is an online live event program held every day from June 10, 2021, to June 18, 2021. In addition to these channels, a contact center has also been opened via email to submit personal questions.

Investor Daily, Page-9, Saturday, July 3, 2021

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