Ceremony Oil Flow ExxonMobil to FPSO in Tuban Refinery

 

Illustration of the First Shipment Ceremony to the FPSO

    The success of ExxonMobil Cepu Limited (EMCL), the operator of the Cepu Block, produced the first oil from drilling infill clastic wells in 2024 amounting to 13,300 Barrels of Oil Per Day (BOPD) and is a special gift for the 79th independence of the Republic of Indonesia this year. 

Illustration Crew of MonitoringOil.com

    This success is according to the Minister of Energy and Resources Minerals (ESDM) Arifin Tasrif raised optimism that oil and gas potential in Indonesia could still be relied on.

    Arifin Tasrif said "This is the second time I have stood on this stage. First, last March when we started drilling activities. There were six programs drilling here and at that time we said that we hoped it could be produced, it could bear fruit this year. Then President of ExxonMobil Indonesia Carole Gall said that at the end of August, I asked the Head of SKK Migas Dwi Setjipto and Carole Gall to coordinate to be able to complete it before Independent Day August-17, 2024,".

    Arifin Tasrif also expressed his appreciation for this success.  

"Congratulations. This first well can produce 13,300 barrels of oil per day and is ready to flow to FPSO at Tuban Harbor. We hope that in the future other oil wells will also be able to make a significant contribution while also having a big impact can encourage oil and gas business people in Indonesia that there is still potential to increase our oil and gas production, because currently in the sector

"Indonesia has an oil deficit," said Arifin Tasrif.

Blogger Agus Purnomo in SKK Migas

    The government together with SKK Migas continue to strive to increase production according to the target of 1 million Barrels of Oil Per Day so that the petroleum deficit can be reduced.

Illustration Crew of MonitoringOil.com

    The Minister of Energy and Mineral Resources asked for efforts to improve not only existing fields, but also new seismic activities and new exploration opportunities accelerate the detection of new oil wells. Indonesia still has a lot of oil potential. Like in the Cepu Block which is already producing today 630 million barrels and has the potential to produce 1 billion new.

Illustration Crew of MonitoringOil.com

    Arifin Tasrif also said "Exploration must be accelerated immediately so that there is immediate certainty. The Indonesian government  provides support to ExxonMobil to carry out new seismic and exploration activities in other areas,"

    Regarding achieving targets in the gas sector, Arifin is optimistic  that this can be achieved with the discovery of large gas reserves which are currently being pushed forward immediately produced. Moreover, oil production is a challenge in the upstream oil and gas industry.

Illustration Crew of MonitoringOil.com

    Head of SKK Migas Dwi Soetjipto on the same occasion said that SKK Migas pays great attention to efforts to maintain production of the Banyu Urip Oil Field to remain optimal, considering that Banyu Urip is the second largest contributor with its contribution reaching around 25% of national oil and gas production. 

    Dwi Soetjipto said that Banyu Urip Field production had exceeded what was targeted in the plan of development (POD).

Illustration Crew of MonitoringOil.com

" Thanks to the various efforts, and innovations carried out by SKK Migas, and ExxonMobil Cepu Limited (EMCL) in maintaining field performance, namely improving production while still paying attention to the capacity and carrying capacity of the existing reservoir," he said.

    After the success of drilling the first well, it is hoped that in the 4th quarter of 2024 it is hoped that the second well will be drilled onstream and provide additional production of up to 9,300 BOPD. 

    Investment for the seven wells drilled reached USD 203.5 million or equivalent to IDR 3.25 trillion (exchange rate IDR 16,000 per USD), and is estimated to provide additional state revenue of USD 2 billion or around IDR 32 trillion, which is expected to provide additional oil amounting to 42.92 MMSTB.

    These efforts can bridge Indonesia's potential in achieving the target of 1 MMBOPD and 12 BSCFD this decade. We continue to explore these potentials, "of course in-order-to achieve long-term goals for energy independence," said Dwi Setjipto.

Illustration Crew of MonitoringOil.com

    ExxonMobil Indonesia President Carole Gall said "ExxonMobil is committed to meeting Indonesia's energy needs safely, reliably and efficiently. We are proud of the encouraging results from the Banyu Urip Infill Clastic (BUIC) drilling program and we thank the Ministry of Energy and Mineral Resources and SKK Oil and Gas for their extraordinary leadership and collaboration," said Carole Gall.

    BUIC's drilling activities use platforms and equipment which are all made in Indonesia, and operated by PT Pertamina Drilling Services Indonesia (PDSI) which is a subsidiary of PT Pertamina (Persero). 

    This drilling shows  PDSI's level of competence in the field of oil drilling, and natural gas, as well as support from the upstream oil and gas industry for the growth, and development of  national companies as well as the commitment of SKK Migas and KKKS in implementing discipline domestic component level (TKDN) in the upstream oil and gas industry.

    This success was marked by the First Shipment Ceremony to the FPSO at Tuban Harbor which was channeled via a 72 km long pipe from the Cepu Block field to the oil refinery in Tuban, East Java Province. BUIC's drilling also involves local contractors, and recruits more local workers. This involvement has added economic value to the communities around the ExxonMobil Cepu Limited (EMCL) operating area.

Upstream Oil and Gas Getting More Difficult

    The upstream oil and gas industry needs time to recover because contractors are still looking at the extent of the impact of the pandemic, which is currently booming.

    The Covid-19 pandemic, which was accompanied by a surge in new cases, forced the government to tighten people's mobility, making it more difficult for the upstream oil and gas industry to revive this year.

    This was acknowledged by the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto who stated that the Covid-19 pandemic had put pressure on the upstream oil and gas industry. The implementation of a number of upstream oil and gas activities was finally hampered.

"Some upstream oil and gas activities have been delayed for 1 to 5 weeks," said Dwi.

    A number of disrupted activities include 234 kilometers (km) of 2D seismic surveys, 165 km² of 3D seismic, six exploration wells, 12 development wells, and three development projects.

    In an effort to support the increase in oil and gas production, until June 2021, 186 development wells have been drilled, 309 workover activities, and 11,307 well service activities have been carried out. The realization is still far below the target set.

Blogger Agus Purnomo in SKK Migas

    In 2021, SKK Migas targets drilling 616 development wells. This number increased from the realization in 2020 which was only 240 wells.

    For workover activities, SKK Migas targets 615 wells, while well service activities are targeted at 26,431 activities.

    Meanwhile, during the first semester of 2021, SKK Migas recorded that the realization of ready-to-sale production or oil and gas lifting reached an average of 1.63 million barrels of oil equivalent per day (boepd) or only reached 95.6% of the 2021 APBN target of 1. 71 boepd.

    Dwi explained that entering the beginning of the year, the upstream oil and gas industry had started with low achievements with a production reduction of 19,500 bopd.

    He said there were unplanned shutdowns in a number of work areas which resulted in a production reduction of 4,000 bopd and a delay in drilling and drilling results which reduced production by 5,000 bopd.

"The outlook can be 680,000 barrels of oil per day, gas from the targeted 5,600 MMscfd, the proposed KKKS 5,100 MMscfd, and the proposal can be 5,108 WP&B and because there is a low entry point, it is projected to reach 5,529 MMscfd," he explained.

    According to him, the Covid-19 pandemic has made operational activities inefficient due to a reduction in manpower in the field.

    From a financial point of view, the price of oil that had fallen last year has disrupted the cash flow of cooperation contract contractors (KKKS) so that investment activities have stalled.

"We need time because contractors are also looking at the extent of the impact of the pandemic, which is currently booming," he said.

    SKK Migas Deputy Operations Julius Wiratno added that the reduced mobility of people and equipment during the Covid-19 pandemic was indeed felt by the upstream oil and gas sector, which in turn had an impact on operational activities.

    According to him, throughout the year operational activities are still quite challenging. This will certainly affect the long-term program (LTP) that has been set by SKK Migas.

"The correlation with LTP will be corrected, we are setting terms and conditions from this year to increase next year, but in fact, we will decrease by 3% -4% from the estimate," he explained.

    Meanwhile, during the first 6 months of this year, there were 10 out of 15 KKKS that recorded lifting realizations below the target of this year's APBN.

EMCL

    ExxonMobil Cepu Limited (EMCL) recorded a red report card with the realization of oil lifting of 208,936 bopd. This record is still lower than the 2021 State Budget target set at 219,000 bopd.

Chevron Pacific Indonesia (CPI)

    Apart from ExxonMobil Cepu Limited (EMCL), another KKKS that are below the target is Chevron Pacific Indonesia (CPI) with a lifting realization of 160,646 bopd or only 97.4% of the 2021 APBN target, which is 165,000 bopd.

PT Pertamina EP

    PT Pertamina EP is also a KKKS that recorded a red performance with the realization of oil lifting only 71,420 bopd or 84% of the APBN target of 85,000 bopd.

Pertamina Hulu Energi ONWJ

    Pertamina Hulu Energi ONWJ Ltd recorded the realization of 27,615 bopd or 98.6% of the 2021 APBN target of 28,000 bopd.

    Another Pertamina group that recorded below-target performance was Pertamina Hulu Energi OSES with the realization of 24,594 bopd or 91.1% of the 2021 APBN target of 27,000 bopd.

    Pertamina Hulu East Kalimantan reported the realization of 9,174 bopd or 87.4% of the 2021 APBN target of 10,500 bopd.

    Minor results were also recorded by Pertamina Hulu Sanga-Sanga with a lifting of 11,807 bopd or 99.2% of the APBN target of 11,900%. BOB Bumi Siak Pusako-Pertamina Hulu only reached 95.9% of the APBN target of 9,000 bopd with a realization of 8,913 bopd.

Petrochina International Jabung Ltd

    Next is Petrochina International Jabung Ltd which recorded a Red report card with the realization of 14,823 bopd or 92.6% of this year's APBN target of 16,000 bopd.

    On the other hand, for the realization of natural gas lifting, almost all KKKS have succeeded in exceeding the target set in the 2021 State Budget. However, there are several KKKS experiencing gas absorption problems.

STILL DEPRESSED

    Executive Director of the National Oil and Gas Company Association (Aspermigas) Moshe Rizal believes that the Covid-19 pandemic has made operations in the field quite challenging.

    In addition, KKKS still do not dare to increase their investment during the Covid-19 pandemic. The problem is, even though production is already running, increasing production cannot be separated from the need for investment.

"The government must immediately overcome this pandemic so that operations can run normally again. At the very least, to restore investor interest, incentives must be provided,” he said.

    Meanwhile, ReforMiner Executive Director Komaidi Notonegoro said referring to the realization of Indonesia's lifting since 2000, the results obtained usually do not reach the target and lead to a downward trend.

    In addition, the Covid-19 pandemic that has occurred since last year has again made the lifting target set by the government difficult to achieve due to the disruption of operational activities.

"However, conditions before the pandemic had shown a downward trend," he explained.

Bisnis Indonesia, Page-4, Monday, July 19, 2021

Cepu Block Oil Production Reaches 475 Million Barrels

    Cepu Block production managed by Exxon Mobil Cepu Limited (EMCL)  has reached 475 million barrels, exceeding the target in the plan of development/POD of 450 million barrels. The government encourages the development of oil and gas potential in this block so that production does not decrease significantly.

Exxon Mobil Cepu Limited (EMCL)

    The achievement of cumulative production of 475 million barrels is marked by the 700th shipment of oil lifting from the Cepu Block at the floating storage and offloading/FSO tanker ship Gagak Rimang. The volume of oil lifted is 1 million barrels, namely 850 thousand barrels belonging to the government and 150 thousand belonging to the Cepu Block Participating Interest Cooperation Agency (BKS PI). The shipment was led and witnessed directly by the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif.

Exxon Mobil Cepu Limited (EMCL)

    Arifin said that Exxon Mobil Cepu Limited (EMCL) had previously succeeded in increasing the Cepu Block reserves from the initial 450 million barrels to 940 thousand million barrels. Even from the production level, the oil and gas company originating from the United States was also able to reach more than 200 thousand barrels per day (BPD) from the initial around 160 thousand BPD in 2016. He hopes that Exxon Mobil Cepu Limited (EMCL) can maintain its performance.

"We hope that this capability can continue to be developed to optimize oil and gas production in Indonesia," said Arifin Tasrif. One of them, Exxon Mobil Cepu Limited (EMCL), and partners are expected to continue to develop the oil and gas potentials around the Cepu Block area.

"We hope that the existing potentials can be developed immediately so that they can be used as reserves so that the production process can then be carried out," he said.

Bloger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto added that the Cepu Block had reached a plateau production level with a volume of more than 220 thousand BPD for five years. This realization far exceeds POD with an estimated average production of 165 thousand BPD over two years. 

the Cepu Block by ExxonMobil

    However, as is normal for other oil and gas reservoirs, the Cepu Block production is now starting to decline. However, his party together with Exxon Mobil Cepu Limited (EMCL) continues to strive to maintain Cepu Block's oil production so that it does not drop drastically. 

"Currently SKK Migas continues to oversee Exxon Mobil Cepu Limited (EMCL) with Cepu Block partners to discuss various initiatives to manage the production decline that has begun to occur, including exploring new opportunities in the Cepu Block," said Dwi.

    According to him, there are additional reserves that are ready to be produced of up to 40 million barrels. "In the near term the potential that can be monetized is 40 million barrels, but infill drilling must first be carried out," he said.

    In addition, there is an opportunity to increase the production of the Kedung Keris Field from 10 thousand BPD to 11 thousand BPD. However, exploration drilling is needed to ensure the potential in Kedung Keris. Not only oil, but his party also encourages the monetization of gas potential in the Cepu Block area. 

    This is because the potential for gas reserves in the Cendana and Alas Tua fields is recorded to be very large, around 200 billion cubic feet/BCF with an estimated production of 83 million standard cubic feet per day/MMscfd. Then there is gas potential from several field structures in the Cepu Block, such as Giyanti and Pilang, the amount of which can reach 500 BCF. 

“Gas potential in the future. We hope that Mobil Cepu Limited (EMCL) and Pertamina can optimize this opportunity," he said.

Irtiza Sayyed

    ExxonMobil Indonesia President Irtiza Sayyed said that discussions on opportunities to monetize the potential that still existed in the Cepu block had been carried out intensively. One of the discussions is to ensure the potential reserves of 40 million barrels of oil that are ready to be produced.

"We will do whatever it takes to maximize production and curb production declines," he said.

Nicke Widyawati

    As a partner, President Director of PT Pertamina (Persero) Nicke Widyawati stated that she would fully support efforts to keep Cepu Block production stable.

PT Pertamina (Persero)

"We hope that in the future, the good and solid cooperation that has been carried out so far can be maintained and even increased, given the production level which is estimated to be stable at the level of 200 thousand BPD, so that it can support national energy security," She said.

    Referring to SKK Migas data, this year, the Cepu Block is targeted to produce 219 thousand BPD of oil. Meanwhile, the realization of production as of March 31, was still at 213,251 BPD or 97.4% of the target. 

    In 2020, the realization of Cepu Block production was recorded at 218,194 BPD. Oil production activities at the Banyu Urip Field, Cepu Block have been carried out since 2008 and the main production facilities began operating in the fourth quarter of 2015.

Investor Daily, Page-10, Thursday, June 10, 2021

Cepu Block Backup Optimized

    The government is targeting the potential reserves that are still available in the Cepu Block to prevent a natural decline in production in the working area which is the buffer for national oil production. The Cepu working area, which is operated by ExxonMobil Cepu Limited (EMCL), has recorded crude oil production of 475 million barrels.

ExxonMobil Cepu Limited (EMCL)

    Meanwhile, this production is higher than the estimated total volume of oil reserves produced based on the initial plan of development/POD of 450 million barrels.

the Cepu Block East Java by ExxonMobil Cepu Limited (EMCL)

    Minister of Energy and Mineral Resources Arifin Tasrif said the contribution from the Cepu Block was very large to the achievement of ready-to-sale production or national lifting reaching 30-40 percent. Unfortunately, the water content in the Cepu Block drilling has now increased which indicates a decline in production from the Cepu Block.

"There is another potential of 40 million barrels that must be exploited from around Cepu," he said.

    Arifin hopes that ExxonMobil can optimize oil and gas resources in the Cepu Block and immediately develop existing reserves to be processed into production. According to him, with the total production of the Cepu Block which has reached 475 million barrels, there are still almost half of them, namely 940 million barrels.

"ExxonMobil will take steps, among others optimizing the work in the well to be maintained, then subsurface works will be carried out, more intense programs and also prevent downtime," he said.

Blogger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said the decline in production in the Cepu Block was indeed due to an increase in the portion of water that came out of oil drilling and an increase in the gas ratio. 

    On the other hand, the Banyu Urip Field is currently at a stable production level at around 220,000 barrels per day. However, with production levels higher than the initial estimate, the Banyu Urip Field also experienced a scientific decline in production.

"Currently SKK Migas continues to oversee ExxonMobil Cepu Limited (EMCL) together with partners to discuss various initiatives to manage the decline in production that has begun to occur," he said.

Nicke Widyawati

    Meanwhile, PT Pertamina (Persero) said it would take part in increasing production in the Cepu Block. Pertamina President Director Nicke Widyawati said the increase in production in the Cepu Block would be pursued through the completion of the Jambaran-Tiung Biru (JTB) project which is being worked on by PT Pertamina EP Cepu (PEPC).

the Jambaran-Tiung Biru (JTB)

"Pertamina is committed to increasing additional production in the block because we realize that in the energy transition plan, the use of gas will be a transition from fuel to NRE," said Nicke Widyawati.

    The project with a total investment value of US$ 1.53 billion is projected to have a peak gas production of 192 MMscfd. The JTB project is said to provide a multiplier effect in providing gas supply for various industrial sectors in Central and East Java. 

    Based on SKK Migas data, in the first quarter of 2021 the progress of project work has reached 88.77%. The realization was still below the target of 98.22%.

    Meanwhile, ExxonMobil Cepu Limited (EMCL) crude oil production in the first three months of this year was recorded at 213,251 barrels per day or only 97.4% of the APBN target of 219,000 bopd.

GOVERNMENT APPRECIATION

    Meanwhile, the government will provide awards for upstream oil and gas contractors who have good performance. Arifin said the Ministry of Energy and Mineral Resources has sent a letter to the Ministry of Finance regarding the plan to provide incentives for existing upstream oil and gas contracts.

    According to Arifin, the provision of incentives is to increase the interest of the cooperation contract contractors to increase their production, especially for old wells.

"Those who work hard and produce good results will be rewarded in the form of incentives," he said.

    Arifin continued that wells that had been exploited for a long time had reduced reserves. It takes a lot of effort to at least maintain production levels and maintain the economy of the field.

"If production can increase, the government's share will also increase," he said.

    In addition to incentives for existing contractors, the government will also provide incentives to attract new investors. The challenge is that international oil and gas companies have a tendency to shift their investment costs to NRE.

    The government seeks to attract investors by providing attractive fiscal policies supported by the provision of data and simplification of licensing.

“Indonesia is one of the most attractive locations in the world for investment in the upstream oil and gas sector. For that, we must be able to open an attractive 'showroom' to be visited," said Arifin.

    Dwi Soetjipto assessed that the incentives to be given would depend on the economic value of the business in the field. In addition, incentives also need to refer to the applicable regulations. Dwi Soetjipto said SKK Migas would review a number of aspects to be able to provide these incentives.

"We'll see which one is the best for the country to increase investment," he said.

    On another development, the government is encouraging the development of methane hydrate as an alternative energy source with low emissions. Methane hydrate gas is believed to be one of the unconventional energy innovations that can substitute the use of conventional oil and natural gas.

    Based on research in 2004, it has been found potential reserves of methane hydrate as much as 850 trillion cubic feet in the offshore area of ​​southern Sumatra to the northwest of Java and in the Makassar Strait, Sulawesi.

    This amount is about eight times the current natural gas reserves so that it can support national energy security for up to 800 years. With the support of further research, the volume of methane hydrate gas reserves in Indonesia is estimated to reach 3,000 TCF.

Bisnis Indonesia, Page-4, Thursday, June 10, 2021

The Lifting Target of Petroleum Is More Challenging

 

    The pandemic has made the target of 1 million barrels per day of natural oil production by 2030 even more challenging. Apart from exploration, several other strategies will be taken to increase production.

    Until the end of March 2021, the realization of ready-to-sell production or oil lifting was 676,200 barrels per day or still lower than the State Budget (APBN) target of 705,000 barrels per day. The Covid-19 pandemic in 2020 has caused investment in upstream oil and gas to decline drastically and the number of wells drilled. This condition makes the production target of 1 million barrels per day in 2030 even more challenging.

    Likewise, natural gas lifting, which in the first quarter of 2021 was realized as much as 5,539 million standard cubic feet per day (MMSCFD). In the APBN, the target for natural gas lifting is 5,638 MMSCFD. However, natural gas lifting is currently still higher than the realization in 2020 of 5,462 MMSCFD.

Blogger Agus Purnomo in SKK Migas

    Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto, Monday (26/4/2021), said that the decline in oil lifting in the first quarter of 2021 was influenced by the Covid-19 pandemic since last year. Until the end of 2020, investment in the upstream oil and gas sector dropped dramatically and resulted in low Wells drilling to boost production. Last year, there were 240 wells drilled, and this year 616 wells were planned.

"From year to year, the realization of oil lifting has always been lower than the target of the APBN. This year, we strive so that lifting is not much different from last year's realization. The low investment in 2020 due to the Covid-19 pandemic has resulted in a drastic decrease in production, "Dwi said in a press conference on the Upstream Oil and Gas Performance Exposure for the first quarter of 2021 in Jakarta.

    Dwi added, to reach the production target of 1 million barrels per day in 2030, apart from intensifying exploration to find new reserves, several strategies were taken to increase production. The strategy is to optimize production in existing fields, apply enhanced oil recovery (EOR) methods, and accelerate the status of reserves to production.

the Cepu Block

    SKK Migas noted that the Cepu Block in East Java, which is operated by ExxonMobil Cepu Ltd (EMCL), is currently the largest contributor to oil production in Indonesia, which is 213,000 barrels per day. 

the Rokan Block Chevron in Riau

    Next is the Rokan Block in Riau, which produces 165,000 barrels per day. The operation period of the Rokan Block by PT Chevron Pacific Indonesia (PCI) will end in August and the next management will be handed over to PT Pertamina (Persero).

PT Chevron Pacific Indonesia (PCI)

    From the investment side, SKK Migas targets this year's realization to be 12.4 billion US dollars, higher than last year's realization of 10.5 billion US dollars. Until the first quarter of 2021, the realization of upstream oil and gas investment was the US $ 2.4 billion. The state revenue for the same period was 3.29 billion US dollars or 45 percent of the target of 7.28 billion US dollars.

Exploration

    Separately, the Executive Director of the ReforMiner Institute, Komaidi Notonegoro, said that massive exploration is the most important way to obtain new sources of oil and gas reserves in Indonesia. Moreover, the government has repeatedly stated that out of 128 basins in Indonesia, as many as 70 basins have not been studied at all. Apart from that, the government must also be able to create an attractive upstream oil and gas investment climate for investors.

"No more changes in contracts or regulations. This concerns the certainty of trying. If this still happens, investors will rethink investing in Indonesia and it is possible for them to choose other countries that are more attractive, "he said.

    At the end of 2019, Pertamina through its subsidiary, PT Elnusa Tbk, started a two-dimensional seismic survey to find oil and gas reserves in Indonesian waters. This survey, which crosses the sea along 30,000 kilometers, is the largest survey in the Asia Pacific region in the last 10 years. The survey started from the waters around Bangka Island, Bangka Belitung, to the waters around Seram Island, Maluku.

    According to the Head of the SKK Migas Exploration Planning Division Shinta Damayanti, the exploration results by Pertamina are still being evaluated. The government wants the evaluation data to be made public and is scheduled to be known in July. It is stated that from the results of the exploration there are several prospective areas (there are oil and gas reserves).

"Pertamina has conducted a joint study with other parties in East Java and it is estimated that (in that area) will become a new upstream oil and gas working area. The data from the seismic survey will be useful for investors, "said Shinta.

Kompas, Page-9, Tuesday, April 27, 2021

Pandemic Effects Of The Upper Oil and Gas Load

 

The national oil and gas industry is not yet optimally producing significant results in the first quarter of 2021. The realization of ready-to-sell production is still below the target.

Blogger Agus Purnomo in SKK Migas

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said the realization of ready-to-sell production or oil and gas lifting during the first quarter of 2021 was 1,665.25 Mboepd or 97.3% of this year's APBN target of 1,711.78 Mboepd.

In detail, the realization of oil lifting in the first quarter of 2021 was recorded at 676,200 barrels per day (BOPD), or only 96% of this year's APBN target of 705,000 BOPD. Likewise, the realization of natural gas lifting in the first quarter of 2021 was 5,539 MMScfd, or 98.2% of the APBN target of 5,638 MMscfd.

“From the oil side, the entry point at the end of 2020 is very low. At that time it was 699 MBOPD and because there was a decrease in investment, the level of production was not appropriate. That is one of the factors affecting the performance that was not achieved in the first quarter of 2021, "he said.

Exxon Mobil Cepu Ltd. (EMCL)

Dwi added that oil and condensate production missed plans in several fields. For example in the Banyu Urip field by Exxon Mobil Cepu Ltd. (EMCL) which experienced an increase in water cut and also in the Sukowati Tuban field in East Java by PT Pertamina EP. Dwi said Exxon Mobil Cepu (EMCL) and Pertamina EP contributed to the shortfall in the national lifting target of 10,000 bopd each.

BP

In addition, there has been a decline in the contribution of drilling several wells, namely Pertamina Hulu East Kalimantan and Minarak Brantas Gas. This condition was exacerbated by the unplanned shutdown in the first quarter of 2021 at Train-1 and Train 2 at BP Berau, CPGL Suban Plant, and at BGP Petrochina Jabung.

Petrochina

"We are trying to calculate, the year-end outlook will not reach 705,000 bopd, but we are trying to make a strategy for no decline in 2021. We can get closer as possible," Dwi said.

Pertamina EP

Meanwhile, the failure to achieve the realization of natural gas lifting was also partly due to the inability to achieve Pertamina EP production. In addition, there are differences in assumptions related to the completion of the Tangguh Train-3 project.

Dwi said that the Tangguh Train-3 project is assumed to be completed at the beginning of this year under these assumptions. But in reality, the project is declared to be shifted until the end of 2021 and there is a possibility that it will be completed next year.

Meanwhile, the organizational reshuffle that has taken place within the PT Pertamina (Persero) group is considered to be one of the causes for the low-performance achievement of this state-owned company in the upstream oil and gas sector. According to Dwi, this is a natural fit when there is an overhaul of the organizational structure. The reason is that the investment has not been able to take place smoothly.

“Subholding is a cause and a process. That usually happens, but Pertamina has carried out harmonization, "he said.

Based on SKK Migas data, in the first quarter of 2021, the Pertamina group cooperation contract contractors (KKKS) that did not meet the APBN oil lifting target included Pertamina EP which only reached 98.8% of the target, Pertamina Hulu Energi Oses 89% of the target, and Pertamina Hulu East Kalimantan 83.6%. Meanwhile, for the realization of natural gas lifting, only Pertamina EP did not reach the target of the Pertamina group with a realization of 99.8% of the target.

Dwi said SKK Migas has communicated directly with both the parent and the upstream sub-holding Pertamina regarding the investment process in the upstream oil and gas sector. SKK Migas has asked the state-owned company to speed up its investment process.

"In the last meeting, it has been announced that starting this month, the issue of waiting for FID is no longer allowed and it has been implemented. Pertamina has determined and raised the investment limit that can be made in the subsidiary, "he explained. Pertamina has stated that it is ready to increase its investment to increase operational performance by up to 20% this year.

Pertamina's Senior Vice President for Corporate Communications & Investor Relations Agus Suprijanto said that to achieve this target, Pertamina has set a Capital Expenditure / Capex budget of US $ 10.7 billion in 2021, a drastic increase from last year's CAPEX realization prognosis of US $ 4.7 billion.

Agus explained that from the total CAPEX, as much as 46% will be allocated for upstream oil and gas activities as an effort to ensure an increase in production and oil and gas reserves. The addition of oil and gas reserves is targeted to reach 696 MMboe or nearly four times the target of adding reserves last year.

Meanwhile, 36% of the CAPEX will be allocated to continue the development of refineries and petrochemicals, while the remaining 18% will be used for other business activities, including continuing the development of new and renewable energy.

"The budget shows Pertamina's high optimism to continue to grow and rise amid the Covid-19 pandemic by continuing the projects or business development that had been going on since the previous year and at the same time creating new initiative programs," said Agus.

OLD FIELD

Reforminer Institute founder Pri Agung Rakhmanto argues that lifting is difficult to reach the target because KKKS still continues to rely on old fields, leading to a downward trend.

According to him, the characteristics of the field in addition to the cost per barrel tend to increase and are difficult to predict technically in terms of production operations.

"This is the main technical reason why lifting often does not reach the target. From year to year, we will always struggle with this problem when talking about lifting achievements with the existing fields, "he said.

In connection with the low production of the Pertamina group, Pri Agung assessed that the main cause was not from overhauling the organizational structure through the formation of sub-holding.

"In my opinion, it has nothing to do with the holding sub-holding issue. Lifting is more on short-term managerial issues and operational technical matters, ”he explained.

Executive Director of the National Oil and Gas Companies Association (Aspermigas) Moshe Rizal said that almost all fields in Indonesia have reached their peak production period. So, it is natural for lifting to fall.

Therefore, it needs interventions such as the development of new fields or exploration. In addition, an enhanced oil recovery (EOR) program can be carried out for fields that have entered the secondary or tertiary production phase.

"The problem is that most fields have not prepared the EOR program from an early age so that the development of the EOR program is very expensive and often no longer goes into the field economy," he said.

He added that the low realization of national lifting was also caused by the attitude of investors who are still waiting for the situation to handle Covid-19. Even though the oil price has been very stable above $ 60 per barrel, the situation is still full of uncertainty.

"Investors will focus their investment in areas with lower risk, for example, fields that are already producing and still reduce exploration first," he explained.

Bisnis Indonesia, Page-4, Tuesday, April 27, 2021

Ahok asks JTB to be on time

 

    The President Commissioner of PT Pertamina (Persero) Basuki Tjahaja Purnama paid a working visit to the Jambaran - Tiung Biru (JTB) gas unitization field development project operated by PT Pertamina EP Cepu (PEPC) in Bojonegoro.

PT Pertamina EP Cepu (PEPC)

    Arriving at the project location in Bandungrejo Village, Ngasem District, Bojonegoro, Ahok, as he is often called, he inspected several locations in the project. He hopes that the JTB Project activities can be on stream soon in November 2021.

"Overall the JTB Project is on the track. We hope to be on stream soon in November 2021. Especially for JTB Project workers, work safely and come home safely," said the man who is familiarly called Ahok.

Basuki Tjahaja Purnama AKA Ahok

    With the on stream target, it is hoped that the energy needs in the East Java region, especially from the gas sector, can be accommodated immediately. Pertamina is developing the JTB Project to meet national energy needs. The JTB project can support gas energy of 192 MMSCFD during the production period. 

The Jambaran Tiung Biru (JTB) project

    The JTB project will provide a multiplier effect in providing gas supplies to various industrial sectors in Central and East Java. In addition, in partnership with ExxonMobil Cepu Limited (EMCL), Pertamina is involved in a 45 percent share ownership in the Banyu Urip Oil Field.

ExxonMobil Cepu Limited (EMCL)

    Ahok went to JTB Field accompanied by CEO of Subholding Upstream Pertamina Budiman Parhusip, President Commissioner of PT Pertamina EP Cepu (PEPC) Gandhi Sriwidodo, as well as other Pertamina Management. The group arrived and was greeted by the President Director of PT Pertamina EP Cepu (PEPC), Awang Lazuardi, and his staff. 

the Banyu Urip Oil and Gas Field ExxonMobil

    In addition to the JTB Field, Ahok also visited the Banyu Urip Oil and Gas Field in the Cepu Block in Gayam District. Ahok appreciated the oil and gas operators who have helped the government in fulfilling oil and gas energy.

Republika, Page-9, Friday,  April 9, 2021