The Rokan Block Transition is tiring

The Rokan Block transition process from PT Chevron Pacific Indonesia to PT Pertamina (Persero) will again be delayed, after Chevron refused the Join Drilling Agreement (JDA) option offered, Pertamina. JDA was one of the first options offered to concessionaires, in which Chevron drilling during the transition period at Pertamina's expense. This option was not accepted by Chevron due to economic considerations that were not attractive.

Nicke Widyawati

In a meeting with a number of chief editors of the mass media on Friday (6/3) night, Pertamina President Director Nicke Widyawati revealed that the transition period for the Rokan Block was a particular concern for Pertamina given the impending deadline for managing the block.

The Rokan Working Area (WK)

The Rokan Working Area (WK) management contract by Chevron Pacific Indonesia will end on August 8, 2021. In accordance with the results of the auction, the management of the WK will be carried out by Pertamina, effective from August 9, 2021 for the next 20 years, with a gross split scheme. 

Chevron Pacific Indonesia

    Nicke said it had made an effort in the transition period since last year through a number of options after Chevron adopted a policy of not allocating new investment funds.

The Rokan Block by Chevron

"We have offered joint drilling. So, we did the drilling with funding from Pertamina. However, that effort cannot be accepted, because as a concession holder certainly does not want anyone to enter, "said Nicke.

So far there have been great concerns from Pertamina regarding the Rokan Block transition. One of them is related to oil and gas production from the Rokan Block. Like the Mahakam Block which experienced a decline in production during the transition period, the same situation is predicted to occur in the Rokan Block.

The Mahakam Block

"The Mahakam Block is a problem in the transition period. Now if you look at the Rokan block, more or less the same thing will happen, "said Nicke.

Based on data on oil production profiles and the Rokan Block, a downward trend has been seen that has continued from 2012 to 2019. In 2012, oil and gas production from the Rokan Block was recorded at 338,500 barrels per day (BPD). The amount is produced from 615 wells for a year. Meanwhile, in 2019, oil and gas production from the block will only be 186,000 bpd, and there will be no drilling activity at all.

"It dropped dramatically," Nicke said.

Looking at the declining production profile, Pertamina estimates that without drilling activity at all until next year when the block is transferred to Pertamina, production is estimated to only have 140,000 BPD left. If this is the case, Pertamina claims that it will be difficult to restrain the decline rate.

"It's an old well that has been sucked up for 92 years. Surely the decline rate is extraordinary. This is happening. Reflecting on the Mahakam Block, in the last year, drilling in the block only occurred in six wells, out of which 60 should have been. "

Bisnis Indonesia, Page-23, Monday, March 9, 2020