The implementation of the 2nd International Convention and Indonesian Upstream Oil and Gas 2021 (IOG 2021) is a potential event to attract investors in the upstream oil and gas sector. In this event, the government auctioned eight oil and gas blocks through two schemes, namely direct bidding and regular auctions.
I believe this convention can attract investors in the upstream oil and gas sector. It's not easy, but the steps in that direction are already there," said Chairman of the IOG 2021 Organizing Committee Lucky Agung Yusgiantoro on the sidelines of holding the 2021 IOG Convention at the Bali Nusa Dua Convention Center (BNDCC), Monday (29/11).
According to him, currently, Indonesia needs large amounts of investment in order to achieve the government's target of producing 1 million barrels of oil per day (BOPD) and 12 billion standard cubic feet of gas per day (BSCFD), by 2030.
The convention, themed Progressing Towards 1 Million Barrel of Oil per Day and 12 Billion Standard Cubic Feet Per Day, was opened by Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, attended by Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif, Minister of Investment/Head of Coordinating Board Investment (BKPM) Bahlil Lahadalia, Deputy Minister of Finance Suahasil Nazara, and Head of SKK Migas Dwi Soetjipto.
Lucky, who is also the Chief Environmental Expert of SKK Migas, stated that in an effort to meet national energy needs, SKK Migas has set a long-term vision for the upstream oil and gas industry, in the form of achieving a production target of 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2020 the year 2030.
To achieve this target, SKK Migas has established a strategic plan for Indonesian Oil and Gas 4.0 which serves as a guide for actors in the upstream oil and gas sector, such as optimizing existing fields for field development plans, accelerating the transformation of resources into production with good supervision and control at each stage. field development plans, as well as accelerating Chemical Enhanced Oil Recovery in contributing to the addition of national oil production.
"The 2021 IOG Convention is an effort by SKK Migas in disseminating information about Indonesia's target of meeting energy needs from the oil and gas sector. We continue to spread the news that we are aiming to achieve that target,” said Lucky.
Auction of 8 Oil and Gas Blocks
Meanwhile, on the same occasion, the Ministry of Energy and Mineral Resources (ESDM) again opened auctions for eight oil and gas blocks this year, of which three are gas blocks. The total resources for these eight oil and gas blocks are estimated at around 500 million barrels for oil and 22.65 Trillion Cubic Feet/TCF for gas. Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said that the eight oil and gas blocks were offered through two schemes, namely direct bidding and regular auctions.
"A total of 4 oil and gas blocks were offered with a direct bidding scheme and 4 blocks through regular auctions," he said.
Four oil and gas blocks are offered through this direct offer, namely the Bertak Pijar Puyuh Block with potential resources of 1.38 million tank barrels in South Sumatra, North Ketapang 270.08 million barrels, and 1,589.81 Billion Cubic Feet/BCF off the coast of East Java. , Agung I 985 BCF off the coast of East Java and Bali, and Agung II 16.5 TCF off the coast of East Java, South Sulawesi, and West Nusa Tenggara.
Next, four oil and gas blocks are regularly auctioned, namely West Palmerah Block with potential resources of 71.7 million barrels and 270.9 BCF in South Sumatra and Jambi, Pope 2,555.78 BCF off the coast of Natuna, Maratua II 107.06 million barrels. and 556.77 BCF in North Kalimantan, and Karaeng 64.2 million barrels and 182.08 BCF in South Sulawesi.
"Especially for the Bertak Pijar Quail Block, this is an exploitation block that has ever been produced," said Tutuka.
In this auction, his party offered better terms and conditions for the auction. One of them is the improvement of profit sharing (split) for the cooperation contractors who are determined to take into account the risk factors in the related oil and gas block.
Next, the signature bonus is open for bidding without a minimum limit, First Tranche Petroleum (FTP) is reduced to 10%, and the implementation of the Domestic Market Obligation/DMO obligation price of 100%.
Then, just like the first stage of the auction, oil and gas companies can choose the form of Production Sharing Contract/PSC between cost recovery and gross split. Others, there is no refund of part of the work area (relinquishment) in the third year of the contract and ease of accessing data through the Migas Data Repository (MDR) membership mechanism.
"As well as providing incentives and tax facilities according to applicable regulations," said Tutuka.
The government invites oil and gas companies that have the financial and technical capabilities, are able to meet the minimum requirements for definite commitments, as well as the terms and conditions of the auction, as well as have good performance and track record to be able to participate in the auction of this oil and gas block. For auctions through direct bidding, access to auction documents is open from November 29, 2021, to January 11, 2022.
Furthermore, the submission of participation documents can be done until January 12, 2022. For regular auctions, access to tender documents is open from November 29, 2021, to March 24, 2022, while the submission of participation documents is no later than March 25, 2022.
Optimistic
Deputy Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Fatar Yani Abdurrahman added that the response of oil and gas companies to the second phase of the auction of oil and gas blocks was very positive. This is because the fiscal provisions offered in the auction are very attractive, especially the split for contractors. In addition, the oil and gas reserves of several blocks being auctioned off are also very large.
“For example, the Agung Blocks I and II, which have large reserves of around 2-3 TCF, are also fiscally attractive. Judging from this, we are optimistic that there will be a new contract signing," said Fatar Yani.
Director and Chief Operating Officer of PT Medco International Tbk Ronald Gunawan assessed that the provisions used in the second phase of the oil and gas block auction were an innovation. One of them is related to profit sharing, it seems that the government is no longer guided by the provisions for profit sharing of 85:15 for oil and 70:30 for gas.
"Hopefully, with this new oil and gas block with breakthrough terms and conditions, it will attract more investment," he explained.
Investor Daily, Page-10, Tuesday, Nov 30, 2021
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