The cooperation contract contractor who holds the participation right in the Cepu Working Area is racking his brain to reduce the rate of natural production decline in the block which accounts for about 30% of the national oil.
Meanwhile, the participating shareholders in the Cepu Block are divided into seven companies, namely PT Pertamina EP Cepu (PEPC) with a 45% share, ExxonMobil Cepu Ltd (EMCL) 20.5%,
Ampolex. (Cepu) Pte. Ltd. 24.5%, PT Sarana Patra Hulu Cepu 1.09%, PT Asri Dharma Sejahtera 4.48%, PT Blora Patragas Hulu 2.18%, and PT Petrogras Jatim Utama Cendana 2.24%.
President Director of Pertamina EP Cepu Awang Lazuardi said that in connection with the potential decline in production after reaching the peak period this year, his party will coordinate intensively with a number of partners. According to him, Pertamina EP Cepu will actively communicate with ExxonMobil Cepu as the operator of the Banyu Urip and Kedung Keris fields, as well as other participating rights holders.
In addition, together with PT Pertamina Hulu Energi (PHE) as the company's sub-holding and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), his party will compile further strategic steps. Meanwhile, a number of work plans that are being and will continue to be carried out include maintaining reservoir pressure, well intervention/services, and preventive maintenance.
"Coordination with EMCL [Exxonmobil], our partners, and SKK Migas will continue to be carried out in compiling a work plan and execution," he said.
Previously, Exxonmobil was exploring all options to optimize production in the Cepu Block, which has entered its peak period. Azi N. Alam, Vice President of Public and Government Affairs of ExxonMobil Indonesia, said that the company continues to explore various options to optimize the production of the Cepu Block safely and reliably.
"As the backbone of national oil production, we hope to produce more than double the initial expectations," he said.
Based on the results of Exxonmobil's technical study, Azi explained that the recoverable reserve of the Banyu Urip Field has more than doubled from the initial plan of development (PoD) of 450 million barrels of oil to 940 million barrels of oil. According to Banyu Urip's PoD, the peak production period is estimated to be around 2 years with an average annual production of 165,000 barrels of oil per day. However, since the full facility start-up, ExxonMobil has been producing up to 225,000 barrels of oil per day for about 5 years.
Production had increased by about 30% from the initial POD and peak production was 3 years longer than originally estimated. However, due to the natural characteristics of the reservoir, which is common throughout the world, ExxonMobil predicts Banyu Urip oil production will decline.
“Despite our continued efforts to optimize production, we have maintained outstanding safety and reliability performance as well cost-effective operation, "he explained.
Head of SKK Migas Dwi Soetjipto said that the Cepu WK has a big role and contribution to the achievement of national oil and gas, including the production target of 1 million barrels of oil per day.
"The 2021 target for the Cepu Block working area will produce 219,860 barrels of oil per day and 55.16 MMscfd of gas," he said.
Regarding the production target of 1 million barrels of oil per day, the government still needs to find an additional 350,000 barrels per day within 9 years. Member of Commission VII in the energy sector of the House of Representatives, Kardaya Warnika, said that the current condition in increasing domestic oil and gas production is the provision of incentives. The government is selling out incentives to contractors to spur exploration activities which he calls suspended animation.
"Given any incentives, but the legal certainty is not yet, investors are still in doubt," he said.
Oil and gas practitioner Widyawan Prawira Atmaja said that the revision of the Oil and Gas Law, which has stopped for almost 9 years, is now crucial. He also urged Commission VII on the energy sector of the House of Representatives to immediately finalize the law to improve the domestic oil and gas investment climate. Energy Watch Executive Director Mamit Setiawan assessed that to achieve this vision one of the biggest obstacles is legal certainty.
According to him, the certainty of new regulations is one of the key investments expected by oil and gas investors. In addition, the form of SKK Migas which is only issued through a Presidential Regulation is considered to provide uncertainty to investors.
SANGATTA OIL FIELD
In another development, PT Pertamina EP Asset 5 Sangatta Field recorded oil production of 415 barrels per day from the ST-200 well. The record has tripled compared to production in December 2020.
Hanif Setiawan, Sangatta Field Manager, said that the increase in production was an effort made between Pertamina EP Sangatta, Pertamina Drilling Service Indonesia, and the local government.
"The success of the ST-200 is proof that by synergizing between lines and running an unusual business operation by adapting to a pandemic situation, not only does it provide additional oil and gas production, but more than that, safety and health are maintained," he said.
Drilling of the ST-200 well located in Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency, is carried out to a final depth of 2,203 meters measured depth (mMD) or 2,076 meters true vertical depth (mTVD). Pertamina EP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the Wells work plan for 2021.
For Sangatta Block, 18 development wells will be drilled and five well work plans will be carried out. This activity is expected to contribute to efforts to produce 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas integrated operating system report on February 4, 2021, on a year-to-date basis, PEP Asset 5 is able to record Crude oil production from Kalimantan is 16,172 barrels per day.
Meanwhile, for gas, production is around 15.44 MMscfd. This production is supported by five oil and gas fields, namely Sangatta and Sangasanga (East Kalimantan), Tarakan and Bunyu (North Kalimantan), and Tanjung (South Kalimantan and Central Kalimantan).
"For Sangatta Field, during 2020, oil lifting recorded as much as 696,065 barrels or 101% of the target. Production was recorded at 682,734 barrels or 110% of the target, "said Hanif.
Bisnis Indonesia, Page-19, Tuesday, Feb 9, 2021
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