A number of cooperation contract contractors (KKKS) chose to leave after years of investing in Indonesia's oil and gas fields. After Royal Dutch Shell confirmed that it would leave the Masela Block (Maluku), now ConocoPhillips intends to leave the Corridor Block (South Sumatra).
Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Fatar Yani Abdurrahman revealed that ConocoPhillips' plan to release Participating Interest (PL) ownership shares in the Corridor Block had been submitted to SKK Migas.
"Verbally, it has been conveyed like that, releasing Participating Interest (Pl) shares," he said.
Although it has stated its intention verbally, ConocoPhillips has not detailed further the reasons for releasing Participating Interest (PL) ownership shares in the Corridor Block. Fatar confirmed that there is no planned meeting with ConocoPhillips. SKK Migas is still waiting for ConocoPhillips' official proposal submission. ConocoPhillips Vice President Commercial and Business Development Taufik Ahmad declined to comment further on this news.
"Until now there has been no additional explanation apart from what was conveyed by SKK Migas," he said.
Currently, ConocoPhillips is listed as the contractor for the Corridor Block with a 54% participating interest and Repsol Energy has a 36% interest. Meanwhile, Pertamina has a participating stake of 10%. The production sharing contract (PSC) in the Corridor Block will expire on December 20, 2023.
A new production sharing contract was signed in 2019, whereby the existing KKKS received a 20-year extension with a Gross Split PSC. In the period 2023-2026, there will be a transition period, in which ConocoPhillips will still be the operator. However, after this period, the operatorship will be transferred to Pertamina.
Later, in the latest production sharing contract, there will be a change in the amount of Pl, namely Pertamina Hulu Energi Corridor controlling 30%, ConocoPhillips 46%, and Repsol 24%. The planned departure of ConocoPhillips adds to the long list of global oil and gas companies leaving Indonesia.
In July 2020, Royal Dutch Shell plans to withdraw from the Masela Block Perpetual Gas Project. Shell, which holds a 35% participating stake, is still looking for a replacement candidate.
Another investor who also intends to leave is PT Chevron Pacific Indonesia (CPI) which will release its participating stake in the Indonesia Deep Water Development (IDD) Block. After Shell left, SKK Migas Deputy Operations Julius Wiratno said the search for partners for the Masela Block is targeted to be completed by the end of this year.
"Shell is in the process of looking for a replacement until the end of this year. Chevron is the same way. This is common in the business world," he said.
In this situation, Julius ensured that the government could not intervene in the ongoing business-to-business process. The Executive Director of the Reforminer Institute, Komaidi Notonegoro, believes that the government needs to evaluate the upstream oil and gas business regarding the plans of global investors who want to leave.
"However, domestic business actors such as Pertamina need partners," said Komaidi Notonegoro.
The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) projects that this year's oil and gas lifting will reach 97.3% of the target in the 2021 State Budget (APBN). Head of SKK Migas Dwi Soetjipto projects that this year's oil and gas lifting reached 1.6 million barrels of oil equivalent per day (MBOEPD) or lower than the target in the 2021 State Budget of 1,711.78 MBOEPD.
Referring to the realization in the first quarter of 2021, according to Dwi, there is still pressure on oil and gas production. On the other hand, there was also an unplanned shutdown and a delay in drilling execution.
"There is also a delay in the onstream schedule of several oil and gas fields so that the total is reduced by 25,000 barrels per day and gas by 99 mmscfd from the target that has been set," he said.
Dwi added, in order to cover the existing production gap, SKK Migas targets additional drilling activities this year. They predict drilling activities can increase to 700 activities.
Kontan, Page-13, Wednesday, June 2, 2021
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