The Offshore Iron Rig Theft Tragedy is the most reckless in the world.

the Hull Rig Kodeco Energy #2

    It is suspected that a gang of steel rig thieves from Gresik City carrying two boats with 16 personnel were crushed by the Hull Rig, a former drilling rig belonging to Kodeco Energy Co. Ltd (KE#2) originating from South Korea, which is located in Klampis waters, Madura, East Java. This rig has not been operating since 2006, because it has been operating for 26 years since 1980, and now has no economic value because oil and gas reserves have run out in that well, and the 2nd Taurus Rig is only used as a lighthouse to guide fishermen go to and from the sea looking for fish around the Java Sea. After 2011, this drilling area became a concession for PT Pertamina Hulu Energi West Madura Offshore (PHE-WMO) which is now included in the Pertamina Zone-11 area.

Illustration of Coast Guard

    Pertamina Hulu Energi WMO is a subsidiary of PT. PHE has activities in the fields of exploration and production carried out in the western offshore area of ​​Madura. PHE WMO takes over the operations of Kodeco Energy Co's oil and gas fields. Ltd, from South Korea since 11 May 2011 after the block concession was previously owned by Kodeco Energy Co. Ltd, from South Korea. PHE WMO is a subsidiary of PT. Pertamina Hulu Energi which was formed specifically to manage the oil and gas fields off the west coast of Madura.

The Hull Rig Kodeco Energy Co. Ltd KE#2

    Before the iron rig thief tragedy occurred, a local security guard who guarded the rig for a Community-Based Security member of PT Pertamina Hulu Energi West Madura Offshore, said that he saw 2 suspect fishermen from Gresik on Saturday, June 8, 2024, afternoon. 17.00 PM, so the sun has not yet set. 

The Hull Rig Kodeco Energy Co. Ltd KE#2

    It is suspected that the two masterminds of this biggest theft, were already on the rig, pacing back and forth monitoring the situation on the Taurus Rig belonging to Kodeco Energy (KE-2). Meanwhile, 2 other suspect were waiting on the boat. 

Pirate Ship

    Some of the fishermen had actually been warned not to approach Rig Taurus KE#2, namely on May 29, 2024, even though their homes in the Gresik City area in Kroman village were around 50 nautical miles from where the Rig Taurus was located. The Taurus Rig is a National Vital Object, where at a distance of 500 meters from the Rig no fishermen are allowed to fishing, because it is very dangerous.

 Iron Rig Theft Tragedy

    After the four suspected suspects disembarked after surveying the rig they were going to steal, local beach security officers took this suspected gang of thieves to the Sepulu Sub-District police sector for questioning. This is because the rig is a vital national object. 

Illustration of Coast Guard

    After an inspection at the police station, they promised not to ride on the Taurus rig again. The agreement is stamped, so it has legal force if it is violated again. And they were not arrested, because no iron rig was stolen. 

 Iron Rig Theft Tragedy

    If detention is carried out, the costs of detention are very large, because the state will bear the costs of a suspect amounting to 50 million per year per person for food and drink, water, electricity, etc, And suspects who are already professionals can buy a judge to lighten their sentence, as happened in Surabaya, an judge just released a suspect from abuse that resulted in a woman dying without being released from prison because there was a deal that the public didn't know about, because several regional judges in Indonesia easy to buy, unlike in Japan, a judge cannot be bought.

Illustration Of Rig Wokers 

    During the examination process, the four suspects made false statements claiming to be Bangkalan residents, but they did not carry Indonesian National Identity Cards. After being pressed to convey the true purpose of why they were on the Taurus Rig, they finally admitted to being residents of Gresik Regency which is about 50 nautical miles from Bangkalan Regency. 

Kroman Village

    Because there was no evidence of the iron rig being taken in the sea area when June 8, 2024, fell under the legal authority of the Water Police Unit, the four people were then released after promising not to repeat their actions when they boarded the Taurus Rig. It turns out they reneged on the deal. 

Illustration Of Rig Wokers 

    Not only that once did they break that promise, before Saturday, June 8, 2024, security caught the same fishermen approaching the rig and pacing around the rig to re-survey and plan a safe escape route from the pursuit of the local coast guard.

Illustration Of Woker Rig

    But on Monday, June 10, 2024, Monday afternoon at 17:00 PM, they left again bringing 2 boats complete with welding and iron cutting equipment, 50 kg oxygen cylinders, along with more personnel, namely 16 people, and arrived at the Taurus Rig around 01:00. AM WIB. 

Kroman Village Gresik City to Rig Taurus Bangkalan City 

    Then they carried out their action of cutting the rig's very valuable iron until Tuesday, June 11, 2024, until 23:00 PM, they didn't realize that they had cut all 3 of the rig's leg locks so that in a split second, on a cold, dark night pitch black, the Hull rig fell down onto 2 boats that were standing by under the rig which held the rig iron which had been cut into pieces. 

Illustration Of Rig Wokers 

    Meanwhile, the 8 suspects who were on the rig to unload the stolen iron survived, because they were not crushed by the Hull Rig, they only fell into the sea but did not drown, because they could all swim.

Illustration Of Rig Wokers 

    As a result, these 2 boats sank into the sea along with their iron cargo and the 8 suspects disappeared in a very dark night after a split second the Hull Rig collapsed into the seabed killing 8 suspects, while the 8 suspects who were on the Rig were able to save themselves and swam to the shore. 

Escape Route from Rig Accident to Dr. Soetomo Hospital

    The distance from the beach was about 2 km, they contacted the team that was already on standby on land, and did not ask for help from local residents, because it could raise suspicion, so that as soon as possible they could return to their home area which was very far away and take their injured colleague to the hospital in Surabaya, even though they could take their colleague to a Syam Rato Ebu Hospital in Bangkalan which is 32 KM closer, they still took their injured colleague to a hospital in the Surabaya area which is 60 km away from the tragedy area, so as not to be suspected by local police officers. Until now, 1 fisherman victim was found dead, while the bodies of 7 other suspects were still missing under the rubble of the hull rig and are unknown until now.

the rubble of the hull rig

PHE WMO Wins The 13th Annual Global CSR

Labuhan Beach CSR of PHE WMO

    Sub holding Upstream Pertamina won an international award at The 13th Annual Global CSR Summit & Awards 2021 for the implementation of the CSR Program, especially in the aspect of Community Involvement & Development (CID) which is innovative and sustainable and provides measurable benefits for the environment and the community, especially around the operational area on Tuesday (16/11/2021).

Tracking in Labuhan Beach by PHE WMO

    The Annual Global CSR Award event is one of the prestigious awards at the international level which is held every year, with a selective scoring system which this time was participated by companies from 7 countries in the Asia Pacific region.

Labuhan Beach Mangrove Park by PHE WMO

    Pertamina's Upstream Subholding received 6 awards in various categories that contributed to the achievement of the Sustainable Development Goals (SDGs) targets, including supporting Goal 2 Without Hunger, Goal 4 Quality Education, Goal 5 Gender Equality, Goal 8 Decent Work and Economic Growth, Goal 13 Addressing Climate Change, Goal 14 Ocean Ecosystems, and Goal 15 Land Ecosystems.

    In the category of Empowerment of Women Award, Subholding Upstream Pertamina won the Platinum award, which is the highest award, through CSR programs implemented in several work areas. These CSR programs involve and empower women in supporting the achievement of SDGs 5, namely Gender Equality, one of which is the implementation of CSR programs carried out by PHE West Madura Offshore (PHE WMO) and PHE Jambi Merang.

Blogger Agus Punomo in PHE WMO

''The CSR program carried out not only targets the economic value for the beneficiaries but also produces new values, namely, behavior that refers to women's gender equality in the community so that they are also able to become Agents of Change both in their families and communities,'' explained Arya. Dwi Paramita, Corporate Secretary of Pertamina's Upstream Subholding who was met separately.

Gazebo in Labuhan Beach by PHE WMO

    While in the Best Environmental Excellence Award category, Pertamina's Upstream Subholding won 2 awards, namely Gold through the Labuhan Mangrove & Coral Reef Ecotourism Program which is an innovation of PHE WMO, part of Zone 11 Regional East Indonesia, as well as a Silver award for the Footprint Program (Jerih Kerja Karawang, The Spirit of Healthy Farmers for Food Security Increases), which was initiated by PT Pertamina EP (PEP) Subang Field which is part of Zone 7 Regional Java Subholding Upstream Pertamina.

Touring boat in Labuhan Beach

"The Labuhan Mangrove & Coral Reef Ecotourism Program succeeded in planting a total of 76,050 mangroves and sea pine with a total accumulation of carbon sequestration until 2021 of 16,875.77 tons CO2 eq, which has supported Labuhan Village in obtaining the title of ProKlim Utama Village from the Indonesian Ministry of Environment and Forestry in 2021," Arya said.

    Pertamina's Upstream Subholding also received a Gold award for the category of Excellence in Provision for Literacy & Education Award through the 'PELITA' Program (Environmental Education for Children) and Waste for Education: One Stop Solution conducted by Pertamina EP Subang Field, part of Zone 7 Regional Java Pertamina Upstream Subholding.

    The other two awards were for the Best Community Program Award category, achieving a Gold rating through the Polyculture Program, Innovation for Optimization of Pond Products developed by Pertamina EP Tambun Field, part of Pertamina's Upstream Java Subholding Zone 7 Regional. 

    In the same category, Pertamina's Upstream Subholding also received a Bronze award for the implementation of the Desa Cinta Bumi Respons Api program, a program based on climate change mitigation and adaptation as an effort to prevent forest and land fires from PHE Jambi Merang, part of Zone 1 Regional Sumatra Subholding Upstream Pertamina.

“This achievement is a manifestation of Pertamina's Upstream Subholding commitment in implementing the CID Program as part of implementing Environmental, Social & Governance (ESG) performance aspects to contribute to the achievement of the SDGs. This award provides motivation for us to continue to innovate and strive to spread wider benefits to the community, especially around our operational areas throughout Indonesia,'' concluded Arya.

    In conjunction with the 2021 Global CSR Award, the 12th Annual Global CSR Awards 2020 was also held, which was delayed due to the Covid-19 pandemic. In the 2020 Global CSR Award, PHE, which is now Pertamina's Upstream Subholding, won several awards in a number of categories, including the Gold award for the Excellence in Provision for Literacy & Education Award category through the Minority Group Empowerment Program through Education at PHE Jambi Merang and JOB Pertamina- Medco E&P Tomori Sulawesi.

RIG PHE WMO near Labuhan Beach

    In the Best Community Category, PHE through the Community-Based Ecotourism Program from PHE WMO and PHE Siak also won a Bronze Award and a Bronze award in the Women Empowerment category by JOB Pertamina-Medco E&P Tomori Sulawesi with the Sinorang Herbal Village Program.

    The 2020 award was also won by Pertamina EP Tarakan Field from the Border School Program for Education Equity in Disadvantaged Areas in the Excellence in Provision for Literacy & Education Award Category with a Gold rating.

Monitoringoil.com, Thursday, Nov 18, 2021

Allotment of 10% BUMD shares in 26 Oil and Gas Blocks Processed

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted that as of April 2021, 26 oil and gas blocks were still in the process of transferring 10% participating rights to Regional Owned Enterprises (BUMD).

Blogger Agus Purnomo in SKK Migas

    Head of the Program and Communication Division of SKK Migas Susana Kurniasih revealed, in general, the process of transferring 10% participating shares to BUMDs does take time.

"Usually the governor has not determined which BUMD will represent or the Contractor of the Same Affected Contract (KKKS) has not offered PI to the regional government," he explained.

    In addition, the other process, namely BUMDs still has to complete data according to the provisions in the applicable regulations, namely the Minister of Energy and Mineral Resources Regulation Number 37 of 2016. The Indonesian Petroleum Engineering Expert Association (IATMI) considers that there needs to be a change in the 10% Participating Interest share allocation scheme for BUMDs.

    Hadi Ismoyo, Secretary-General of IATMI who is also the President Director of PT Petrogas Jatim Utama Cendana, said that the 10% PI governance for BUMDs contained in Government Regulation Number 37 of 2016 still faces many challenges, one of which is the reduced internal rate of return (IRR) of contractors oil and gas.

    Hadi said that previously BUMDs were allowed to cooperate with partners, but this time it is not allowed. He hopes that there is a middle ground that can be taken.

"It is a legal construction as it is now, but the articles that might become a negative list for investors are corrected," he said.

    In addition, under the current regulations, the contractor must first pay for the financing.

"From the perspective of BUMD, of course, it is very profitable, but in my opinion, it is not fair. Second, sometimes because everything is borne by the contractor first, it seems that our voice is lost," said Hadi.

    From an economic point of view, this has an impact on the reduction of the contractor's IRR, especially when the bailout funds are charged without interest. Referring to the Regulation of the Minister of Energy and Mineral Resources Number 37 of 2016 concerning Provisions for Offering 10% PI in Oil and Gas Working Areas Article 12 Paragraph 5 it is stated that the return on financing as referred to in paragraph (3) is taken from the share of BUMD or regional companies from oil production and or natural gas according to the cooperation contract without interest.

    Hadi also considered that a number of payment obligations should still be carried out by BUMD as part of investment and train BUMD to be professional in running a business. Hadi also confirmed that there needs to be a re-discussion regarding the current provisions.

“It takes professionals in the oil and gas sector to implement 10% PI governance. BUMD managers must be slim and agile and fast in making and processing strategic decisions," added Hadi.

    For the East Java Region, there are still five oil and gas blocks that are currently in the process of transferring the 10% PI to BUMD. The five oil and gas blocks are the Kangean Block, the Ketapang Block, the West Madura Offshore (WMO) Block, the Tuban Block, and the Brantas Block.

PHE-WMO

    There are a number of oil and gas blocks whose contracts have expired in 2020 and have officially changed their management. Thus, the transfer of 10% participation rights to BUMD will also be carried out in the oil and gas block.

    The blocks include Block B South Jambi. Then the Salawati Block where Petrogas Ltd through its subsidiary Petrogas (Island) Ltd officially manages the Bird's Head Salawati Block in Sorong Regency, West Papua as of April 23, 2020. On the other hand, there are three oil and gas blocks whose contracts expire this year, namely the Bentu Segat Block, Rokan Block, and Long Strait Block.

 Kontan, Page-12, Wednesday, July 28, 2021

Heavy Duty Runway Lifting

 

Improving the performance of upstream oil and gas is still homework that needs to be completed by industry players in the country, in line with the low lifting achievement by some contractors.

Blogger Agus Purnomo in SKK Migas

Based on data from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), out of 15 large cooperation contract (KKKS) contractors that produce oil and condensate, eight companies are unable to meet the production targets ready for a sale (lifting) in the work program and budget (work program and budget / WP & B) 2020.

PT Pertamina EP

PT Pertamina EP, for example, realized lifting reached 93.5% of the WP&B. A similar condition occurred in Conocophillips (Grissik) Ltd with a lifting achievement of 92.2% from WP&B. 

Blogger Agus Purnomo In Petronas Carigali Ketapang

    Meanwhile, Petronas Carigali (Ketapang) Ltd was only able to record a lifting of 76.8% of the target. On the other hand, the KKKS with the largest oil production and lifting, ExxonMobil Cepu Limited (EMCL), is still able to meet the target in 2020 with the realization of lifting reaching 217,637 barrels per day (bpd) from the Cepu Block.

the Cepu Block and Banyu urip Field

This achievement came from the Banyu Urip field production which had reached a peak production of 230,000 bpd. In gas lifting, out of 15 large KKKS, there are also eight companies that are unable to meet the target according to WP&B, namely Conocophillips (Grissik) Ltd, Pertamina EP, Eni Muara Bakau B.V, and Medco E&P Natuna. 

Blogger Agus Purnomo In PHE-WMO

    Then, other contractors who failed to reach the target were Pertamina Hulu Energi West Madura Offshore (PHE-WMO), PT Pertamina Hulu Energi Jambi Merang, Husky-CNOOC Madura Ltd (HCML), and Pearl Oil (Sebuku) Ltd.

Deputy for Operations of SKK Migas, Julius Wiratno explained that his party was preparing a warning or warning for KKKS that did not reach the target in accordance with the deal.

"For the 2020 performance, a 'love letter' is currently being drafted, this week it is [sent]," he said.

He emphasized that the KKKS could get sanctions for not being able to achieve the target. Sanctions can be in the form of tightening KKKS spending until the KKKS work plans and budgets are not approved.

"There are also those whose cost recovery is not approved if it is not in accordance with the initial agreement," he said.

He also highlighted a number of subsidiaries of PT Pertamina (Persero) that have not been able to meet the lifting target last year. Julius assessed that this was due to economic problems in the field. However, SKK Migas and Pertamina have made an agreement to improve performance this year. 

    Previously, the President Director of PT Pertamina Hulu Energi, Budiman Parhusip, said that Pertamina has challenges with a high decline rate due to managing old fields. However, his party has prepared a number of contracts related to the drilling program to optimize lifting.

"We hope that the full cooperation will run smoothly," he said.

Meanwhile, Pertamina is planned to manage around 60% of the oil and gas fields in Indonesia. Currently, about 40% are still managed by this state-owned company. With this projection, the government also has high hopes for Pertamina in achieving the oil lifting target of 1 million BPD. Meanwhile, the government is deemed necessary to intervene in the decline in Pertamina's performance in the national upstream oil and gas sector.

Trisakti University lecturer Pri Agung Rakhmanto explained that the main factor for Pertamina's decline in production last year was due to the economy in the field plus the pressure of the Covid-19 pandemic. According to him, old fields have an effect on the decline in investment and Pertamina's business activities. Meanwhile, the Covid-19 pandemic has resulted in limited operational activities.

"Pertamina is now the backbone of national production with more and more blocks being transferred to it by mistake. The government should be able to provide more support, "he said.

He suggested that the cooperation contract should include fiscal aspects affected by the latest economic conditions. Meanwhile, Executive Director of the National Oil and Gas Companies Association (Aspermigas) Moshe Rizal said that the fall in oil prices coupled with a decrease in demand due to the Covid-19 pandemic has indeed put heavy pressure on KKKS financially. 

    In addition, operational activities are hampered by large-scale social restrictions (PSBB) even though the budget is available. As a result, project execution is hampered, including maintenance operations, workovers, and other activities that can help maintain production levels.

"For this year, everything depends on how fast we recover economically and how fast the distribution of vaccines is so that it can reduce the infection rate," he said.

The President Joko Widodo

PRICE OF POWER PLANT GAS

President Joko Widodo has set the price of natural gas for power plants at a maximum of US $ 6 per MMBtu. The regulation is in Presidential Regulation Number 121 of 2020 concerning Amendments to Presidential Regulation Number 40 of 2016 concerning Natural Gas Pricing which was promulgated on December 29, 2020. In Article 4 Paragraph 3 it is stated that the determination of certain natural gas prices can be given to natural gas users. engaged in the supply of electricity for the public interest. 

This Presidential Regulation is in line with the Minister of Energy and Mineral Resources Regulation Number 10 of 2020 concerning Amendments to the Regulation of the Minister of Energy and Mineral Resources Number 45 of 2017 concerning Utilization of Natural Gas for Power Plants. This regulation confirms the adjustment of the gas price for PT PLN (Persero) 's needs to be the US $ 6 per MMBtu.

Bisnis Indonesia, Page-4, Thursday, Jan 7, 2021

11 Agreement on Changes in Gas Prices Signed

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated 11 letters of agreement (LoA) to adjust industrial gas prices and electricity to the US $ 6 per million British thermal units / MMBTU re-signed.

SKK Migas recorded total gas volume according to the LoA of 231.18 billion British thermal units per day / BBTUD. Thus, the total volume of gas sold at US $ 6 per MMBTU according to government policy has now reached 564.63 BBTUD or 47.53% of the total volume of 1,188 BBTUD in the Minister of Energy and Mineral Resources Decree No. 89K / 2020 concerning Procedures for User Determination and Natural Gas Prices Certain in the Field of Industry.

The LoA was signed by six national gas producers, namely PT Pertamina EP, Kangean Energy Indonesia Ltd., PT Pertamina Hulu Energi (PHE) Jambi Merang, PT PHE Ogan Komering, PT PHE North Sumatra Offshore (NSO), and PT PHE West Madura Offshore (WMO) and partners.

Blogger Agus Purnomo in PHE-WMO

While buyers who signed this agreement were PT Pertamina Gas (Pertagas), PT Sumber Petrindo Perksana, PT Petrokimia Gresik, PT Bayu Buana Gemilang, PT Inti Alasindo Dwiguna, and PT PGN Tbk, PT Pertagas Niaga. Not only LoA, nine oil and gas producers have also signed a Side Letter of Production Sharing Contract (PSC). 

   These nine companies are PT Pertamina EP, PT PHE NSO, PT PHE Ogan Komering, PT PHE Jambi Merang, PT PHE Offshore South East Sumatra (OSES), EMP Bentu Limited, Kangean Energy Indonesia Ltd., PT Pertamina Hulu Mahakam, and Minarak Brantas Gas Inc.

"This signing was carried out in order to provide legal certainty and investment related to the adjustment of gas prices after the issuance of a number of regulations from the Ministry of Energy and Mineral Resources," Head of SKK Migas Dwi Soetjipto.

The Side Letter of PSC explains the profit-sharing adjustment between SKK Migas and oil and gas producers by using a provisional entitlement to the application of natural gas prices determined by the Minister of Energy and Mineral Resources. This calculation is carried out through a mechanism to reduce the share of the country on a monthly basis to maintain the revenue share of oil and gas companies.

Whereas the LoA is a continuation of a previously signed agreement between the seller and buyer of natural gas. The essence of the agreement stipulated in the LoA includes volume, initial gas price, gas price adjustment, and implementation period.

"By signing this side letter of PSC and LoA, we hope that oil and gas producers can continue to increase their investment in Indonesia and maintain the national gas production target," Dwi said.

Chalid Said Salim

PT Pertamina EP President Director Chalid Said Salim appreciated SKK Migas for providing investment certainty in the upstream oil and gas sector through the signing of the Side Letter of PSC and LoA.

"We certainly appreciate this step because it will encourage increased investment in upstream oil and gas in the future. In the short term, Pertamina EP and SKK Migas will optimize the program this year so that it is efficient as the capital stepped up in the following year, "Chalid said.  

 Investor Daily, Page-10, Friday, June 5, 2020

SKK Migas Speeds Up Operation Schedule of the Upstream Oil and Gas Project

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) accelerates the operational schedule of the upstream oil and gas project which is estimated to be completed this year. 

   For example, the Meliwis project managed by Ophir Indonesia (Madura Offshore). The project, which will produce 20 mmscfd of gas production, is targeted to be completed in July this year.

Then the construction of the Bambu Besar project by PT Pertamina EP and reactivation of the PHE-12 Platform by PHE-WMO and the construction of the Sembakung gas compressor facility by Pertamina EP.

Blogger Agus Purnomo in PHE-WMO

The implementation of these projects was originally targeted to be completed in 2021, but this project is claimed to be able to be completed this year. The Bambu Besar project will produce 3 mmscfd of gas (non-asso) now in the EPC process and will be streamed in the third quarter of 2020.

While Reactivation Platform-12 is an activity to improve the platform which had tilted in 2017, to produce oil production of 3,000 barrels per day (BOPD). It is expected that the project can be realized by the end of 2020. Likewise, the Sembakung compressor project will be completed by the end of 2020, and produce 2 mmscfd of gas.

SKK Migas and KKIG continue to conduct intensive coordination to ensure that the upstream oil and gas project can run well according to the schedule, said the Head of SKK Migas, Dwi Soetjipto.

According to him, the acceleration of a number of projects is a form of SKK Migas 'commitment to upstream activities and the success of SKK Migas' transformation. But certainly, the completion of a number of oil and gas projects will have an impact on increasing national oil and gas production and lifting.

Kontan, Page-12, Thursday, June 4, 2020

PGN Group Signs LoA Phase Two

PT Perusahaan Gas Negara Tbk (PGN) signed the second phase of the Letter of Agreement (LoA) held by SKK Migas on Wednesday (3/6). This was done as a form of implementation of the Decree of the Minister of Energy and Mineral Resources number 89 of 2020 concerning Users and Prices of Natural Gas in the Industrial Field and the Decree of the Minister of Energy and Mineral Resources 91.K / 2020 concerning the Price of Natural Gas in Power Plants (Plant Gate). In this agenda also witnessed ESDM Minister Arifin Tasrif, SKK Migas Head, KKKS representative, and Buyer's representative.

The PGN Group includes Pertamina Gas (Pertagas) and Pertagas Niaga (PTGN) which are affiliates of the gas holding sub-sector as one of the buyers signing an LoA with PT Pertamina Hulu Energi (PHE) which acts as a seller on 4 contracts.

The contract includes LOA from the Ogan Komering Work Area in South Sumatra with the volume in accordance with Ministerial Decree number 89.K of 1.43 - 1.44 MMSCFD for utilization in the South Sumatra industry. The price of upstream adjustment from the initial price of US $ 8.27 / MMBTU to US $ 4.62 / MMBTU. 

    LoA from the Jambi Merang Region, with a volume in accordance with Minister of Energy and Mineral Resources Decree number 91.K / 2020 of 35 BBTUD for utilization in the electricity sector of western Java and Batam. The price of gas adjustments upstream is US $ 4.00-4.06 / MMBTU.

LoA from the North Sumatra Offshore Working Area for Industry and electricity in Aceh and North Sumatra. The volume distributed according to the Decree of the Minister of Energy and Mineral Resources number 89.K / 2020 is 8.5 BBTUD. The price of upstream adjustment from the initial price of USD 6.25 / MMBTU to USD 4-4.5 / MMBTU.

Blogger Agus Purnomo in PHE-WMO

Furthermore LoA from the West Madura Offshore Working Area (PHE-WMO) with volume according to Ministerial Decree number 89.K / 20 of 19 BBTUD for utilization in the industrial sector in East Java. During the period up to December 2021, the upstream gas adjustment price was USD 5.33 per MMBTU. Furthermore, until 31 December 2022, the upstream gas price adjustment was USD 4.5 per MMBTU.

In addition to the signing of the LoA with PT PHE, the PGN Group through PT Pertagas also carried out the signing of the LoA with PT Pertamina EP from the Pondok Tengah, Tambun and Pondok Makmur fields with a volume of 0.9 BBTUD with an upstream gas price of USD 4.5 / MMBTU. US $ 7.17 / MMBTU.

The price of natural gas is valid until the end of the time of the price adjustment of Natural Gas in the Decree of the Minister of Energy and Mineral Resources number 89K / 2020. The period for adjusting natural gas prices can be extended, if there is a further decision from the Minister of Energy and Mineral Resources.

"As a midstream businessman who distributes gas from upstream oil and gas to the gas user industry, the signing of the LOA agreement is a sign that we have bought at a lower gas price as stipulated in the Minister of Energy and Mineral Resources Regulation so that the price of gas in the industry is at the US $ 6 per MMBTU.

We believe that selling prices to industrial gas users lower than before will have a positive impact on increasing competitiveness for the national industry, "said PGN President Director Suko Hartono as the buyer's representative.

Furthermore, Suko explained that PGN projects that gas demand will increase so that it will encourage PGN to increase the capacity and reach of gas infrastructure. In addition, it will also have multiple impacts on industrial growth, growth of new economic points, downstream gas industry, and other positive impacts on the national economy. PGN has also prepared various technical provisions for the implementation of the Minister of Gas Price Decree which will be agreed with the customer.

Investor Daily, Page-10, Thursday, June 4, 2020

SKK Migas Accelerates Three Oil and Gas Projects

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) accelerated the operational schedule of the three national upstream oil and gas projects to this year at the time of mobility restrictions due to Covid-19. The three projects will increase oil production by 3,000 barrels per day and gas by 5 million cubic feet per day / MMSCFD.

SKK Migas Deputy for Operations Julius Wiratno said the three oil and gas projects were the development of the Big Bamboo Project and the construction of the Sembakung gas compressor facility by PT Pertamina EP, and the reactivation of the PHE-12 platform by PT Pertamina Hulu Energi West Madura Offshore (PHE-WMO). These three projects should only be completed next year.

Blogger Agus Purnomo in PHE-WMO

"But these projects can be completed by 2020," he said.

He explained the Big Bamboo Block Project would produce gas of 3 mmscfd. At present, the project is still in the stage of working on the engineering, procurement, and construction / EPC package and will go on stream in the third quarter of this year. While reactivation of the PHE-12 platform is an improvement activity that was skewed in 2017 ago.

This project is targeted to be realized later this year and can produce oil of 3,000 BPD. Furthermore, the Sembakung compressor project is also scheduled to be completed by the end of 2020 and will produce 2 MMSCFD of gas.

"The success in accelerating the realization of the upstream oil and gas project when the mobility restrictions in the context of Covid-19 mitigation shows the determination and enthusiasm of the upstream oil and gas people to be able to implement the program agreed in the Work Program and Budget (WP&B) 2020 optimally and efficiently," said Julius.

Julius also revealed that the Meliwis Block Project undertaken by Ophir Indonesia (Madura Offshore) will be completed and start operating this July. This project will produce a gas of 20 MMSCFD.

Dwi Soetjipto

The Head of SKK Migas, Dwi Soetjipto appreciated the innovations made by his ranks with the cooperation contract contractors (KKKS) so as to produce an acceleration of projects in the field. He continues to coordinate with KKKS to ensure that the upstream oil and gas project can run well according to schedule.

"During the Covid-19 outbreak, SKK Migas was able to accelerate the implementation of the completion of three projects," he said.

According to him, if the upstream oil and gas project can run well, there will be an increase in the production and production of oil and gas lifting. In addition, the oil and gas project is also able to move the regional economy and create jobs, especially the community around the project site.

"This is in line with the Government's focus on being able to encourage the economy to move during the Covid-19 outbreak," he added.

Dwi acknowledged the Covid-19 outbreak and the still low oil prices were a real test for efforts to realize the oil production target of 1 million BPD in 2030. One of the important keys to achieving the target was how to keep the project going well on schedule.

The success in accelerating the project was due to the successful implementation of the 2 pillars of the SKK Migas transformation, namely the Integrated Operation Center (IOC) and One Door Service Policy (ODSP).

Previously, four oil and gas projects were operating. First, the Grati Pressure Lowering Project in East Java was undertaken by Ophir Indonesia (Sampang) Pty and produced 30 MMSCFD of gas. Then, the development of the Randugunting Field by PT Pertamina Hulu Energi (PHE) Randugunting in Central Java provided additional production of 5 MMSCFD.

Furthermore, the Buntal-5 Field by Medco E&P Natuna Ltd provides additional gas production of 45 MMSCFD. Finally, Sembakung Power Plant by PT Pertamina EP with a capacity of 4 MW to support upstream oil and gas operations in the East Kalimantan region.

Blogger Agus Purnomo in Petronas Carigali Ketapang II Ltd.

In 2020, SKK Migas targets 11 upstream oil and gas projects to be onstream. Another project scheduled to operate this year is Bukit Tua Phase-3 with an estimated production of 31.5 MMSCFD by Petronas Carigali Ketapang II Ltd. planned to begin operations in the first quarter of last year.

Blogger Agus Purnomo in Petronas Carigali Ketapang II Ltd.

Furthermore, besides Meliwis, two projects will operate in the second quarter, namely the 15 MMSCFD Betung Compressor by PT Pertamina EP, Malacca Strait Phase-1 3,000 BPH by EMP Malacca Strait.

In the third quarter of 2020, there were three oil and gas projects scheduled to operate. These three projects are the 2.4 mmscfd Beauty Project by PT Sele Raya Belida, the LP-MP SKG-19 150 MMSCFD Compressor by PT Pertamina EP, and Peciko 8A 8 MMSCFD by PT Pertamina Hulu Mahakam.

Finally, the Merakes Project by ENI Indonesia is scheduled to begin production in the fourth quarter of 2020. The peak production of the Merakes Field is estimated to reach 60,305 barrels of oil equivalent per day / BOEPD. In 2020, national oil and gas lifting was set at 1.95 million BOEPD, up slightly from last year's 1.8 million boepd realization. 

the Merakes Project by ENI Indonesia

    Specifically, oil production rose to 755 thousand BPH from the realization of 746 thousand BPH, and gas to 1.19 million BOEPD from the realization of 1.06 million BOEPD.

Investor Daily, Page-10, Thursday, June 4, 2020