Nearly a century ago, efforts to get crude oil out of Central Sumatra began as the beginning of Chevron's footprint in Indonesia. Now, a new leaf has opened and the story is ready to change.
In 1924, Socal geologists led by E. M. Butterworth began to set foot in the Dutch East Indies (another name for Indonesia during the Dutch colonial period). Exploration efforts have not been easy, a decade after exploration began, these efforts have yet to bear fruit.
Exploration activities carried out through the Nederlandsche Pacific Petroleum Maatschappij (NPPM) company also often get ridicule from competitors with the nickname Non-Producing Petroleum Maatschappij or oil companies without production.
Not only that, in 1930 the Dutch geologists made a report predicting no oil in Central Sumatra. He stated that the area contained many layers of granite sediment that could not contain hydrocarbons.
However, these conditions did not make Socal geologists despair to find the content of crude oil. After almost drilling 3,000 holes, finally, the potential for oil was found in Duri Field, Bengkalis.
Starting April 1952, Minas Field started production for the first time and in February 1954, Duri Field started production. The oil produced from the two fields is 42,800 barrels per day (BPD).
From the first barrel of oil was lifted in 1952 until the expiration of Chevron's production sharing contract in the Rokan Block on August 8, 2021, the total crude oil produced from the Rokan Block and three other blocks has reached 12 billion barrels. During its operation, Chevron has left various legacies in Riau, from infrastructure development to improving human resources.
The first infrastructure built by Chevron was the construction of Duri-Dumai Road in 1958. One year later, the Siak River Pontoon Bridge and the 180-kilometer Pekanbaru-Dumai road were completed and inaugurated.
Chevron also built SMA 1 Pekanbaru which was the first high school in Riau at that time. Chevron also inherited SMA 1 Minas, SMA 1 Dumai, Polytechnic Caltex Riau, Darmasiswa Chevron Riau, to Energy Corner which is a library in Riau.
This legacy will become Chevron's eternal legacy in Indonesia after the end of Chevron's Rokan Block management period on August 8, 2021, at 24.00 WIB, at midnight.
This is in accordance with the Indonesian government's decision in July 2018 which decided that the Rokan Block would be managed by PT Pertamina (Persero) after the PT Chevron Pacific Indonesia (CPI) contract ended.
In its journey, the management of the Rokan Block has gone through many dynamics. Starting from investment agreements during the transition period to contain the decline in production rates, the complexity of developing an enhanced oil recovery (EOR) formula, to the transfer of power plants in the Rokan Block.
PERTAMINA'S EFFORT
PT Pertamina, through PT Pertamina Hulu Rokan (PHR), as the relay winner for the management of the Rokan Block, has long ago designed and implemented a transition program so that the operational performance of the work area is not disrupted.
Pertamina Hulu President Director Rokan Jaffee A. Suardin said all stages of the nine transition programs had been implemented. Jaffee said that in the Rokan Block, his party manages a working area of 6.453 km2 with 10 main fields, namely Minas, Duri, Bangko, Bekasap, Balam South, Batak City, Farmers, Pematang, Petapahan, and Pager.
"By switching operatorship from CPI to PHR, we will make maximum efforts to maintain and continue to carry out massive operating activities to increase oil and gas production so that we can meet the national target of 1 million barrels in 2030," he explained.
The oil production target of 1 million BPD in 2030 is indeed reasonable to mention. How not, the Rokan Block has now become one of the backbones of national oil production so that the government's ambitious target is highly dependent on the performance of the block. In the hands of Pertamina, production in the Rokan Block is even targeted to reach 175,000-180,000 BPD.
This target is higher than the production target set in the 2021 State Revenue and Expenditure Budget (APBN) of 165,000 BPD. The increase in production will result from the increase in the number of drillings that will be carried out by Pertamina.
For the drilling program, PHR will drill 84 wells and the CPI program plans to carry over 77 wells to PHR, bringing a total of 161 wells during August-December 2021.
To support the smooth running of these drilling activities, as many as 291 contracts were mirrored and have been completed 100%. In addition, 60 new contracts for pre-EOC needs have been awarded 100% progress status.
Oil and gas practitioner Tumbur Parlindungan said there are a number of important things that need to be considered by Pertamina when managing the Rokan Block, including maintaining production capacity and technology transfer.
With the entry of Pertamina, it is hoped that there will be new sources in the Rokan Block. The reason is, with the condition of the field being old, Pertamina cannot rely solely on the existing field.
"If there are no new findings, production will not be able to increase," said Tumbur.
Meanwhile, for technical issues, Pertamina inevitably has to cooperate with strategic partners to be able to obtain the better technology needed to manage the Rokan Block.
Executive Director of ReforMiner Komaidi Notonegoro believes that in the oil and gas business, it cannot only refer to an increase in certain target volumes, but it is also necessary to pay attention to more economical production costs.
According to him, if production in the Rokan Block is increased to a certain level, the resulting production costs must still be included in the economic scale of the business.
Apart from a number of challenges that lie ahead, the presence of Chevron and the Rokan Block itself has become history for the oil and gas industry in Indonesia. Finally, Chevron's departure from Bumi Andalas should be closed with the words "Thank you Chevron and welcome Pertamina".
Bisnis Indonesia, Page-7, Monday, Aug 9, 2021
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