Mubadala Energy discovered the enormous gas potential in the Layaran-1 oil well

 

Blogger Agus Purnomo

    The Andaman region has a charm for oil and natural gas company investors from the United Arab Emirates, Mubadala Energy. Having just discovered large amounts of gas potential in the Layaran-1 oil well, the company is immediately targeting the development of oil wells in Layaran-2 in the hope of getting bigger results.

Blogger Agus Purnomo in SKK Migas

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) revealed that Mubadala Energy immediately prepared plans for further exploration activities at other prospects in the South Andaman oil block. While waiting for the results of the post-drill evaluation of the Layaran-1 Well, which is located off the coast of Aceh, around 100 kilometers off the coast of northern Sumatra.

Drilling Worker

    Deputy Head of SKK Migas Nanang Abdul Manaf said Mubadala Energy is immediately preparing plans next year to drill the Layaran-2 block oil well and other prospects, such as in the Parang-Parang and Ramba oil blocks.

    The oil rig used for drilling the Layaran-L oil well is currently being moved to the Andaman II oil block so that it can be used by Harbor Energy which is working on the Halwa and Gayo Wells.

    In the Layaran-1 oil well, Mubadala Energy succeeded in discovering a large gas column with a thickness of more than 230 meters in the Oligocene sandstone reservoir. Complete data acquisition, including wireline, caring, sampling, and production test (DST) was carried out.

    The exploration well was successful in flowing excellent quality gas with a capacity of 30 million standard cubic feet per day (MMSCFD). Mubadala Energy reports that the Iayaran-1 oil well has the potential to reach 6 trillion cubic feet (TCF) of gas-in-place, higher than the potential of the Geng North-1 oil well in the Kutai basin, Kalimantan, and is in the top three in the world.

Drilling Worker

    Mubadala Energy CEO Mansoor Mohammed Al Hamed said that the discovery of potential gas in the Iayaran-1 oil well will bring good commercial opportunities for the company at the current momentum of the energy transition.

    The confirmed new discovery is also Mubadala Energi's second consecutive success in the Andaman oil field, after encouraging results at the Timpan-1 well in the Andaman II block.

    The Ministry of Energy and Resources, Energy and Mineral Resources (ESDM) is still waiting for the Post-Drilling Study of the South Andaman Block Layaran-1 oil well, which has reportedly succeeded in identifying the gas potential of up to 6 TCF.

    Director of Upstream Oil and Gas Business Development at the Ministry of Energy and Mineral Resources, Noor Afifin Muhammad, positively assessed the discovery of gas potential in the South Andaman Block carried out by Mubadala Energy.

    Noor said that Mubadala Energy should add the data that is still needed, as well as geological and chemical studies before arriving at the economic calculations of promising projects.

    Founder and advisor of the ReforMiner Institute, Pri Agung Rakhmanto, believes that the government must make it easier and facilitate further exploration efforts for world-class investors so that Mubadala Energy can prove gas reserves from the South Andaman Block.

Pri Agung said that the gas potential announced by Mubadala Energy still had to go through a series of studies and further well drilling to prove it and calculate its economics because it still needed further exploration with several more wells, then well testing, and then certification of the reserves. From this process, it will become more visible what field development and its economics are like.

    Further exploration must be carried out at very large costs and investments. Moreover, the position of the South Andaman Block is offshore at a distance of around 100 kilometers off the coast of northern Sumatra and Mubadala Energy is very experienced in working on offshore projects.

    STJ Budi Santoso, General Chair of the Association of Indonesian Geologists, said that the discovery of gas potential in the Layaran-1 Well brings new hope for gas exploration and development in Indonesia because the Timpan-1 Well and Layaran-1 Well have become play-openers for the Oligocene sandstone play. in this area, especially after the Arun Gas Field in the Special Region of Aceh Province, North Sumatra experienced a very large decline and became a regasification project.

    According to Budi Santoso, Mubadala Energy is still in the early stages of evaluating the size of these resources, and requires appraisal wells, as well as preparation for the development phase, POD, so that a more accurate reserve value can be obtained in the field to then proceed to the production stage.

    Even though it already holds concessions in South Andaman and Andaman I, Mubadala Energy is also reportedly interested in continuing to drill exploration wells in the Andaman III Block, whose ownership was released this year by Repsol Andaman B.V.

    Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Tutuka Ariadji, said that Mubadala Energy wanted to try to continue exploration of the Andaman III Block, which was considered unsatisfactory by Repsol.

    Mubadala Energy wants to try exploration because it has its own concept which is very different from the technique used by Repsoll, it has been drilled by Repsol, and the results are not good, but according to Mubadala Energy, the concept is very different.

    Tutuka said Mubadala Energy had only conveyed its commitment to drill one exploration well this year on the block released by Repsol, even though the company does not have participating shares in the gas field.

    Repsol Andaman B.V itself returned the management contract for the Andaman III Block to Indonesia after not extending additional exploration time which ends in June 2023. After withdrawing from the Andaman III Block, Repsol will focus on further developing its other portfolio in the Sakakemang Block, in the Banyuasin area, South Sumatra Province.

    This decision was taken after the initial deep sea drilling of the Rencong-lX Well at the end of last year did not identify any reserves of oil and gas or experience a dry hole. The offshore exploration well is located at a seawater depth of around 1,100 meters at a distance of around 42 kilometers from the North Aceh coastline.

    Drilling Well Rencong-1X is part of the definite commitment that Repsol helped complete in the Andaman III Block last year after the production-sharing contract (PSC)was first signed in November 2009. At that time, the block management shares were given to Talisman Energy Inc., a company from Canada.

Overcoming oil and gas BIG challenges in Indonesia

    The allure of upstream oil and gas investment in the country is increasingly attractive, as reflected in the commitment of a number of Cooperation Contract Contractors (KKKS) to continue investing in exploration activities.

    A number of global oil and gas giants have also agreed to achieve a large target of oil production of 1 million barrels per day (BPD) and gas of 12 billion standard cubic feet per day (BSCFD) by 2030.

    Through the signing of the Bali Commitment which was carried out at the CEO Forum at the 2023 International Convention on Indonesian Upstream Oil and Gas at the Bali Nusa Dua Convention Center, Badung Regency, Bali, Thursday, September 21. 

    The KKKS CEOs also promised to prepare a massive 2024 work program and budget, aggressive, and efficient. According to reviews by CEOs of international and national oil and gas companies, Indonesia is still an important portfolio. 

ENI ITALY

    Starting from oil and gas companies from Italy, namely ENI, ExxonMobil (United States), Petroliam Nasional Berhad or Petronas (Malaysia), Repsol SA (Spain), British Petroleum (England), to PT Medco Energi Internasional Tbk, and PT Pertamina ( Persero) invests more heavily in the oil and gas sector.

Roberto Daniele

    Director of ENI Muara Bakau BV, Roberto Daniele, said he was serious about investing more intensively in the exploration side of oil and gas fields. Currently, ENI together with PT Pertamina (Persero) have established strategic cooperation to carry out joint exploration in the Mahakam Block. 

the Mahakam Block

This collaboration is expected to increase oil and gas reserves. Roberto Daniele said ENI Muara Bakau BV is collaborating with Pertamina to explore the oil block in Mahakam to look for other oil and gas sources throughout Indonesia.

    Apart from that, ENI will also carry out more massive drilling for wells and exploration in the next 4 years. According to Roberto Daniele, this commitment shows Indonesia's important position in the company's portfolio. 

    Moreover, Indonesia still has large oil and gas reserves. Based on records from the Ministry of Energy and Mineral Resources, Indonesia's proven natural gas reserves even reach 41.62 trillion cubic feet (TCF). Apart from that, Indonesia still has 68 potential basins that have not been explored.

Carole Gall

    President of ExxonMobil Indonesia Carole Gall said that Indonesia has all the segments that ExxonMobil must offer. We have upstream and downstream such as fuel, lubricants, chemicals, and energy transition. Of all the Exxon affiliates in the world, it is rare to have all segments in one place together, but Indonesia has it all. 

    It is not surprising that ExxonMobil remains committed to continuing exploration investments in a number of fields and open areas. Carole Gall said ExxonMobil would drill again in Banyu Urip for 1.5 years.

    Nevertheless, a number of problems still confront the national upstream oil and gas industry, at least There are a number of crucial things that investors should note, including contract certainty, competitive and durable regulations, and ease of investing. 

    The Indonesian government is asked to increase the competitiveness of investment in upstream oil and gas by improving a number of fiscal and non-fiscal policies at a time of increasingly tight competition with a number of countries.

    In accordance with the above, Carole Gall asked the Indonesian government to improve the terms and conditions of upstream oil and gas, especially related to the terms and procedures for procurement of goods and services and auctions for oil and gas projects after approval of the Plan of Development/PoD for oil and gas fields have been obtained by the contractor. 

    According to Carole Gall, the process of procuring goods or auctioning oil and gas projects that is too long makes the return on investment and sustainability of the project unattractive for investors.

    Similar complaints were also made by other KKKS, including Petronas. This oil and gas company from Malaysia highlights the issue of certainty in contracts and fiscal terms in the oil and gas industry. 

Yuzaini Bin Md Yusof

    Petronas will support the Indonesian government to produce 1 million barrels of oil. Petronas Indonesia CEO Yuzaini Bin Md Yusof said Petronas would explore new areas in Indonesia.

INVESTMENT OPPORTUNITIES

Blogger Agus Purnomo in SKK MIGAS

    Meanwhile, Dwi Soetjipto, Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK MIGAS), emphasized that Indonesia continues to Offer investment opportunities in the oil and gas sector and is ready to improve fiscal policy and provide various incentives. 

    Dwi Soetjipto said that in overcoming the energy trilemma, a broader collaborative effort is needed between the government, IOC, NOC, and policymakers, namely the Indonesian government. In line with this, investment support is needed so that exploration and development activities for oil and gas fields can be carried out on a massive scale.

    Responding to various input and complaints submitted by energy observer investors and founder of the ReforMiner Institute, Pri Agung Rakhmanto assessed the need for regulations regarding the latest time limit from processing to reaching the PoD approval decision. Pri Agung Rakhmanto said that the longer it takes, the relative economic value will decrease, and also increase the uncertainty factor if there is no decision immediately.

    Meanwhile, based on SKK MIGAS calculations, the oil and gas sector requires a very large investment of more than US$ 20 billion per year to support the 2030 oil and gas production target. Overall, the funding requirement reaches at least US$ 186.7 billion. to be able to achieve the oil production target of 1 million BOPD and natural gas 12 BCSFD by 2030.

Bisnis Indonesia ,Page-4-Saturday, Sept 23, 2023

Pertamina Strengthen Brand in Global Market

    PT Pertamina through its subsidiaries is increasingly strengthening its Brand in the global market. This is evidenced by a number of collaborations carried out within the scope of several activities, namely upstream oil, and gas, export and sale of products, to shipping cooperation.

    The latest is the signing of a new hydrocarbon contract by Pertamina through its Sub Holding Upstream subsidiary, PT Pertamina Internasional EP (PIEP) which operates in Algiers under PT Pertamina Algiers EP (PAEP), at Menzel Lejmat Nord (MLN), Block 405. Investment funds amounting to US$ 800 million are ready to be released to fund the project.

    PIEP and its partners Sonatrach and Repsol Exploracion 405a SA continue to demonstrate their ability to operate onshore oil and gas blocks. With this trust, the production sharing contract signed is a continuation of the memorandum of understanding agreed between the three companies on September 28, 2022. 

    The joint operation under the contract mentioned above is the MLN field and nine other fields which include the unitization of Ourhoud and El Merk.

    The work program specifically includes the drilling of 12 oil wells and water injection wells, the connection of new development wells, the construction of an LPG extraction unit, and a 3D WAG (Water Alternating Gas) seismic acquisition project, as well as a solar energy production project. 

    The total investment amount planned for the implementation of this development is estimated at more than US$ 800 million and the total resources are almost 150 million barrels of oil equivalent.

    The signing of this contract is in accordance with the wishes of the three partners to realize it within the MLN contractual scope and to strengthen the work in the field of exploration and production of hydrocarbons.

Nicke Widyawati

    The signing of this contract was witnessed by the President Director of PT Pertamina Nicke Widyawati, the Main Director of PT Pertamina Hulu Energi Wiko Migantoro, The President Director of PT Pertamina Internasional EP Jaffee A. Suardin, Group CEO Sonatrach Toufik Hakkar, and other partners Repsol Algiers and Algiers authorities. During the signing ceremony, Nicke Widyawati expressed her appreciation.

Repsol

"After perfect contract preparations, Pertamina and its partners have finally agreed on a new journey for oil and gas operations in Algiers. Our commitment for the long term will be a new and exciting journey, reaffirming Pertamina's global footprint together with Sonatrach, and Repsol," said Nicke Widyawati.

    Nicke Widyawati said the oil and gas block in Algeria is one of the mainstays of oil and gas production from abroad for Pertamina.

"The acquisition of oil and gas blocks abroad with the concept of "bring the barrel home" is a strategic step for Pertamina to maintain national energy security," said Nicke Widyawati.

    Nicke added, in this new contract, apart from crude oil production, Pertamina was also given a permit to build an LPG factory with a capacity of 1 million metric tons per year, where the product will be brought to Indonesia.

"With this new innovation, it is hoped that it can reduce LPG imports and strengthen Indonesia's trade balance," said Nicke Widyawati.

    At the same time, the Algiers oil and gas block also has the potential in developing renewable energy, especially Solar PV which will be utilized as a green electricity supply for oil and gas block operations.

"This is a form of Pertamina's very strong commitment to reducing carbon emissions in all of its business activities in line with the application of ESG," said Nicke Widyawati.

    Jafee said PIEP has the potential to produce peak production in block 405a of 36,000 BOEPD and open up new development opportunities in the surrounding area in the next 25 years, and the potential for an additional 10 years of a contract extension.

"This reflects Pertamina's strong projection going forward in line with Pertamina's main strategy to become a world-class energy company," said Jaffee.

    Menzel Ledjmet Nord (MLN) Oil Field Algiers is one of the oil and gas fields in the Sahara Desert, Algiers which has been fully operational by PT Pertamina since May 2014, through the Upstream Subholding.

    This block has an oil capacity of 35,000 barrels of oil per day (BOPD) and has 58 solar panels that produce 1,141 kilowatt hours (kWh) per year, resulting in reduced emissions of up to 7,507 tons of C02 per year.

    Pertamina as a leader in the field of energy transition, is committed to supporting the Net Zero Emissions 2060 target by continuing to encourage programs that have a direct impact on the achievement of the Sustainable Development Goals (SDGs). 

    All of these efforts are in line with the implementation of Environmental, Social & Governance (ESG) in all of Pertamina's business lines and operations.

    Pertamina Internasional Exploration and Production (PIEP) was established based on the need for international asset management which focuses on managing PT Pertamina's foreign assets. 

    Until now, Pertamina has foreign oil and gas field assets spread across 13 countries, namely Algiers, Malaysia, Iraq, Canada, France, Italy, Namibia, Tanzania, Gabon, Niger, Colombia, Angola, and Venezuela. 

    From 2014 to 2021, PIEP contributed as much as 51 million barrels of oil, or around US$ 2.8 billion to be shipped domestically.

    Another subsidiary is PT Pertamina International Shipping (PIS) through Pertamina International Shipping Pte Ltd which is domiciled in Singapore. This company continues to develop its business wings in the Asia Pacific region so that it transforms into PIS Asia Pacific (PIS AP). 

    The establishment of PIS AP is focused on serving export and import cargo transportation in the international market. PIS is also increasingly aggressively expanding in the global market and has successfully traveled as many as 22 international routes until early 2023.

    Meanwhile, PT Pertamina Lubricants (PTPL), a Subholding Commercial & Trading subsidiary of Pertamina, has owned the Lubricants Technology Center (LTC), the largest lubricants research and innovation center in Indonesia, located in Plumpang, North Jakarta. 

    With an area of 12,500 mz, LTC is equipped with modern facilities and professional human resources to meet the needs of lubricants in the Indonesian market and 14 countries in the world including Australia, Thailand, and South Africa.

Investor Daily, Page-13, Monday, June 19, 2023

Pertamina Builds LPG Factory in Algiers

 

    PT Pertamina has confirmed that it will build a Liquefied Petroleum Gas or LPG factory with a capacity of 1 million metric tons per year in Algiers.

Nicke Widyawati

    The Main Director of Pertamina, Nicke Widyawati, said that her party had obtained a permit to build an LPG factory from the Algerian authorities, because it was part of the management contract for the Menzel Ledjmet Nord Block. Later, products produced from these factories will be brought to Indonesia with the aim of reducing imports of these commodities.

"With this new innovation, it is hoped that it can reduce LPG imports and strengthen Indonesia's trade balance," said Nicke Widyawati.

    In Algeria, Pertamina through PT Pertamina Algiers EP has just received a contract extension for the Menzel Ledjmet Nord Block for the next 35 years.

Repsol

    The Algerian authorities granted the contract extension because they assessed that Pertamina, Sonatrach, and Repsol Exploration 405a SA were capable of managing the onshore oil and gas block well. The block is also one of the mainstays of Pertamina's oil production from abroad.

"The acquisition of oil and gas blocks abroad with the concept of "bring the barrel home" is Pertamina's strategic move to maintain national energy security," said Nicke Widyawati.

    Menzel Ledjmet Nord Oil Field is an oil and gas block located in the Sahara Desert, approximately 1,000 kilometers southeast of Algiers, the capital city of Algiers. Pertamina Algiers EP has fully managed Menzel Ledjmet Nord Oil Field operations since 2014 with a total Participating Interest (PI) of 65%.

    The block has an oil capacity of 35,000 barrels of oil per day (BOPD), with an average oil production from January to May 2023 reaching 14,875 bpd.

    Not only producing oil, the operator of the Menzel Ledjmet Nord Block also installed S8 solar panels which generate 1.141 kWh of electricity per year, and can reduce carbon emissions by up to 7,507 tons of CO2 equivalent per year.

Bisnis Indonesia, Page-4, Monday, June 19, 2023

Pertamina is back in the Fortune Global 500

    PT Pertamina (Persero) re-registered its name as the only Indonesian company to be included in the 2021 Fortune Global 500 list. With a company revenue value of US$ 41.47 billion in the 2020 financial year, Pertamina is in position 287.

"We would like to thank all stakeholders because Pertamina's achievements cannot be separated from the positive support from various parties, both the directors, the board of commissioners and all Pertamina Group employees, as well as shareholders, the government, and the community. This is also an international recognition that Pertamina is equal to other world-class companies," said Pertamina's President Director, Nicke Widyawati.

Nicke Widyawati

    Nicke said, in the challenges of the pandemic since last year, Pertamina faced a triple shock so that it suffered a significant decline in revenue. However, with innovations and business breakthroughs carried out in all business lines and the ongoing organizational transformation, Pertamina was able to increase the company's revenue to US$ 41.47 billion and make a profit of US$ 1.05 billion in 2020. As a BUMN, Pertamina is also consistent. 

Pertamina

    Ensure the supply of energy for the country through various programs, including One Price Fuel, Conversion of Oil to Gas for Fishermen and Farmers, construction of Natural Gas Transmission & Distribution Networks, as well as other downstream infrastructure.

    Through the achievement of Pertamina's operational and financial performance, the total government revenue in 2020 contributed by Pertamina almost reached Rp 200 trillion, namely through tax payments, dividends, Non-Tax State Revenue (PNBP) worth Rp 126.7 trillion, as well as state revenues from oil. The State Shares of Crude and Condensate (MMKBN) from Pertamina's oil and gas blocks amounted to Rp 73.1 trillion.

    With an energy ecosystem that continues from upstream to downstream, Pertamina maintains the survival of 1.2 million direct workers and the multiplier effect on around 20 million workers indirectly. Pertamina's support for the wider community for the recovery of the pandemic also continues to be felt. 

    Starting from the construction of several Covid-19 hospitals, transportation assistance for oxygen distribution, to Pertamina's attention to more than 13,000 MSMEs affected by the pandemic to be able to survive and even upgrade to class.

“The challenges of the Covid-19 pandemic are not light. In addition to strengthening steps to achieve the target market value of US$ 100 billion by 2024, all levels of management and employees remain focused on providing services to the community. We are optimistic that it will continue to grow and continue to provide the widest possible benefits for the community and the country,” said Nicke.

    The Fortune Global 500 ranking is an annual event conducted by Fortune magazine since 1955. The main benchmark is the amount of revenue, including consolidated gross revenue. Other indicators are shareholder equity participation, market capitalization, profits, number of employees, and since 1990 the company's country of origin indicator has also been considered in the Fortune Global 500. Several names of international oil companies are also listed in the 2021 Fortune Global 500 ranking.

    Although financially managed to achieve significant revenues, the company suffered losses. Among them are BP (ranked 18), Royal Dutch Shell (19), ExxonMobil (23), Chevron (75), and Petronas (277). Below Pertamina's ranking, Repsol is in position 381, while from other industries there are Coca-Cola (370), Tesla (392), and Danone (454).

Erick Thohir

Erick: The Form of Hard Work

    Meanwhile, SOE Minister Erick Thohir considered Pertamina's entry into Fortune's list of the world's 500 largest companies as a form of hard work from all elements of the company.

"I am optimistic that Pertamina's performance can be even better. And the frame for Pertamina is to compete with competitors at the world level. Because Pertamina has all the requirements, both quality and capability, to support it as one of the world's big companies," said SOE Minister Erick Thohir.

    Erick views the world's recognition of Pertamina's existence as evidence of ongoing organizational reforms. One of the changes that he considered important as implementing the company's core values ​​that we're trustworthy, competent, loyal, adaptive, and collaborative. So far, Pertamina has never lacked qualified resources.

“But resources without the appropriate value will certainly not be in line with performance. We certainly strive together, so that values ​​that uphold good corporate governance can be the basis. With that, I'm sure performance will follow. Because the results will not betray the process," said Erick Thohir.

    He also highlighted Pertamina's performance from a business and non-business perspective in the midst of the Covid-19 pandemic that is sweeping the world. In the midst of a pandemic that affected the slowdown in the business sector, Pertamina was still able to become one of the driving forces of the economy. Not only that, but Pertamina also plays an active role in efforts to recover from the pandemic from a health perspective.

"Not only performance from the business side, in the current pandemic era we can see the central role of Pertamina through several business lines to support public health. Starting from hospitals, hotels which have been converted as places of isolation and rest for health workers, to actively participating in ensuring the availability of oxygen, "said Erick Thohir.

    Erick hopes that all positive performances, both on the business and non-business sides, can continue to be improved. As a business-oriented company as well as providing services to the public, Pertamina should not be satisfied.

“Our benchmark must be high. So it's not enough just to be in the top 500, we can do even better. Our dream is that Pertamina can become the 50 largest companies in the world and our other SOEs will also enter the top 500," said Erick Thohir.

Investor Daily, Page-1, Wednesday, Aug 4, 2021

Selling Oil and Gas Blocks, Owners Are Still Looking For Strategic Partners

    Sales of oil and gas blocks during the Covid-19 pandemic created challenges. Oil and gas investors who will leave continue to look for buyers who are currently still waiting and see.

    There are four oil and gas blocks that will be sold this year. Namely, Chevron's IDD Block, ConocoPhilips' Corridor Block, Inpex's Masela Block, and Pertamina's Rokan Block on August 9, 2021.

Blogger Agus Purnomo in SKK Migas 

    Head of Program and Communication of SKK Migas Susana Kurniasih revealed, the process of selling oil and gas blocks is still long. The latest update is a notification by ConocoPhilips for a permit request to the Directorate General of Oil and Gas, Ministry of Energy, and Mineral Resources (ESDM) to disclose data. So the process is still early, so far there has been no update on whether there is a follow-up process," said Susana.

    Although the process is ongoing, Susana ensures that activities in Field will continue as usual. Quoted from the official ConocoPhilips website, the participating shares in the Corridor Block are 54% owned by the USA company, the remaining 36% by Talisman, and 10% by Pertamina.

    In 2019, ConocoPhilips signed a gross split cooperation contract to continue the contract in the Corridor Block for 3 years from the end of the contract in 2023. This means that management will continue until 2026 before being continued by Pertamina.

Repsol

    In the new contract, there is a change in the number of participating shares with the composition of ConocoPhillips (Grissik) Ltd. (46%), Talisman Corridor Ltd. (Repsol) (24%), and PHE Corridor (30%). Participating Interest owned by the holders of interest includes 10% PI which will be offered to Regional Owned Enterprises.

    In addition to the Corridor Block, the oil and gas block divestment action is now taking place in two other blocks, namely Masela and Indonesia Deepwater Development. Of the three, only Block IDD will soon find a replacement partner. Chevron is said to be holding final point discussions with the Italian oil company, Eni.

Eni

    Meanwhile, the Rokan Block will also be sold. Pertamina is looking for a strategic partner. Executive Director of the National Oil and Gas Company Association (Aspermigas) Moshe Rizal said that the search for existing partners would likely affect operations. The current condition is not easy to find a replacement partner.

"Hopefully, after conditions improve, it can increase investment interest from outside, because I see that there are many incentives being prepared," said Moshe.

Kontan, Page-12, Thursday, July 22, 2021

SKK Migas Encourages Production of the Sakakemang Block Starting in 2023

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the development of the Sakakemang Block can be accelerated so that it can start production (onstream) in 2023. This target is faster than the Repsol proposal in 2024.

Blogger Agus Purnomo in SKK Migas

    SKK Migas Deputy Operations Julius Wiratno said Repsol as the operator of the Sakakemang Block, had completed the Front End Engineering Design/FEED. In its proposal, Repsol proposed the block to start operating in 2024. However, it sees an opportunity to accelerate the development of this block.

"We see that there are several opportunities that can be accelerated so that they can be onstream in 2023," he said.

Repsol

    One of them is that Repsol projected auction duration will take 9 months. After his party carried out an evaluation, it turned out that the auction period could be shortened, as well as the project execution period. In addition, optimization can also be done by procuring long lid items earlier.

    Currently, Repsol is working on an engineering, procurement, and construction package / EPC for the Sakakemang Block. So far, Repsol is still working on this oil and gas block according to the approved Plan Of Development/POD plan.

"They indicated a bit of a retreat, but we seized the opportunity to be brought forward again. It is currently under intense discussion and being monitored," he added.

    Separately, in the earnings call for Q1 2021, Repsol SA CEO and Executive Director Josu Jon Imaz San Miguel said that the POD approval allowed his party to start the monetization stage of the Sakakemang Block. His party targets the Final Investment Decision / FID for this project to be carried out at the end of 2021 or early 2022.

"With first gas two years later," he said.

    If the FID is completed by the end of this year, the Sakakemang Block can enter the production stage in 2023. However, if the FID is delayed until next year, the project operation could shift to 2024. Imaz added that his party also plans to work on a CO2 injection project in the Sakakemang Block. However, the plan is still under negotiation with the government.

“We are negotiating the terms of this injection plan. If it is agreed, we will be able to launch the project,” he said.

Sakakemang Block Repsol

    The first POD of the Kaliberau Field, Sakakemang Block was approved by the government on December 29, 2020. According to this POD, gas reserves produced amounted to 445.10 billion cubic feet (gross) until the project's economic deadline in 2038 or equivalent to gas sales of 287.7 billion feet. cubic feet with a peak production rate of 85 million standard cubic feet per day/MMScfd. 

    Meanwhile, the cumulative condensate production is 0.17 million barrels with a peak production rate of 34 barrels per day (BPD). Furthermore, the investment cost for the development of the field is estimated at US$ 359 million.

    This project includes the re-entry of the KBD-2XST1 well into a production well, drilling and completion of 1 infill well as a production well, construction of a Wellpad facility, as well as the construction of a number of production support facilities such as a flowline from the Wellpad to the existing Grissik Central Gas Plant (GCGP) in the Corridor Block. , through part of Right of Way (ROW) in Jambi Merang Block and modification of existing equipment and installation of new equipment at GCGP.

    Repsol SA discovered gas reserves in the Sakakemang Block, South Sumatra with an estimated reserve of at least 2 trillion cubic feet through drilling the KBD-2X Well in early 2019. In the Sakakemang Block, Repsol has a 45% Participating interest/PI as well as an oil block operator. Meanwhile, its partner, Petronas, has a 45% participating interest and 10% MOECO.

Investor Daily, Page-10, Wednesday, July 21, 2021

Maintain Production of Rokan Block Pertamina Agrees on 65 BBTUD Gas Supply

    PT Pertamina Hulu Rokan (PHR), a subsidiary of PT Pertamina Hulu Energi, signed two memorandums of understanding/MoU on gas supply of 65 billion British thermal units per day/BBTUD for the Rokan Block. The gas supply will be used in operations to maintain the production stability of the block.

The Tokan Block By Chevron

    The first MoU signed was with PetroChina International Jabung Ltd (PIJL) for gas supply for steam flood operations in the Rokan Block of 50 BBTUD, estimated to start flowing in 2023. The steam flood operation is an enhanced oil recovery/EOR activity for oil production in the Duri Field, Rokan Block.

Repsol 

    The second agreement with Repsol Sakakemang BV is 15 BBTUD. This supply is to fulfill gas needs for the operational needs of the Rokan Block after the handover of operations from PT Chevron Pacific Indonesia (CPI) on August 9, 2021.

PT Chevron Pacific Indonesia (CPI)

    Regarding the MoU with Repsol, Pertamina Hulu Energi President Director Budiman Parhusip said it would be valid for two years. This agreement will be the basis to conduct discussions and studies on the possibility of utilizing the potential supply of gas from the Sakakemang Block to fulfill gas needs in the Rokan Block.

"This gas sale and purchase activity can be carried out after PHR and Repsol Sakakemang BV have obtained an approval letter for gas allocation from the Government of the Republic of Indonesia," said Budiman.

PetroChina

    The same applies to the MoU with PetroChina Jabung. President Director of PT Pertamina Hulu Energi Jabung Taufik Adityawarman said that the gas supply would be used starting February 27, 2023, and was valid for one year. However, the realization of this gas supply is still waiting for the government's decision regarding the production sharing contract/PSC of the Jabung Block which ends on February 26, 2023.

"But that was after the seller signed the new Jabung Block cooperation contract with the Government of the Republic of Indonesia," explained Taufik.

    At the same time, the process of managing the Rokan Block continues. One of them is the existing contract mirroring process, which currently has reached 95% or 276 contracts out of a total of 290 contracts.

"The process of procuring goods and services at PHR for the Rokan block is carried out using several methods, namely mirroring for existing contracts at CPI and new procurement for contracts that do not yet exist in CPI or mirroring," said Pertamina Hulu President Director Rokan Jaffee. A Suardin.

    In addition, the procurement of PT Pertamina Hulu Rokan (PHR) is also through the Local Business Development (LBD) program. Currently, 260 LBD contracts will be processed separately involving around 690 LBD partners. The first stage of LBD socialization was carried out at the end of May and is in the process of contracting for the remainder of this month. PHR continues to seek to expand the involvement of the surrounding community.

Investor Daily, Page-9, Saturday, June 19, 2021

Sakakemang Gas Project Development Plan Approved Soon

 

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the Sakakemang Block's plan of development (POD) will be approved in the near future.

Blogger Agus Purnomo in SKK Migas

Head of SKK Migas Dwi Soetjipto said that his party and Repsol had agreed on the gas price for the Sakakemang Project in line with the gas price policy set by the government. Not only that, but the gas project internal rate of return (IRR) has also been agreed upon. 

Sakakemang Block

    Thus, the POD of Sakakemang Block has been discussed by Repsol with his party and submitted to the Ministry of Energy and Mineral Resources (ESDM).

"The current situation, the proposal [POD] is already in the Ministry of Energy and Mineral Resources. We hope it will be approved in the next 1-2 weeks, "he said.

Dwi Soetjipto

The preparation of POD for Sakakemang Block was hampered by the proposed gas price of US $ 7 per million British thermal units (million British thermal unit / MMBTU) by the developer. 

    Meanwhile, on the other hand, the government has issued Decrees of the Minister of Energy and Mineral Resources, ESDM Minister Regulation number 89K / 2020 and 91K / 2020. This regulation limits the gas selling price to a maximum of US $ 6 per MMBTU for certain industries and power plants. This policy is valid for the next three years and can be re-evaluated.

"We have done a study, and we are also following government rules and regulations for domestic gas prices," said Dwi.

Regarding the POD being prepared, he explained, not all gas reserves in the Sakakemang Block will be developed. For Phase, I development, the gas reserves being developed are only around 0.5 trillion cubic feet (trillion cubic feet / TCF) of the total initial findings of 2 TCF. Meanwhile, the gas production plan is 85 million cubic feet per day (million standard cubic feet per day / MMscfd).

Repsol

Previously, Repsol Group through its affiliate, Talisman Sakakemang BV, had signed a memorandum of understanding (MoU) with PT Perusahaan Gas Negara (PGN) Tbk for gas supply from the Sakakemang Block. This MoU has been in effect since July 12, 2019, and will be followed up with the signing of the Gas Sales Agreement (GSA) by the parties. Repsol SA discovered gas reserves in Sakakemang Block, South Sumatra with an estimated reserve of at least 2 trillion cubic feet through drilling the KBD-2X well at the beginning of last year.

In order to accelerate gas production, the development of this block will be carried out in stages with a reserve certification of 1 trillion cubic feet first. The government hopes that the Sakakemang Block can operate next year. However, in the 2019 second-quarter performance earning call, Repsol SA CEO and Executive Director Josu Jon Imaz San Miguel said he was optimistic that the Sakakemang Block production could be accelerated in 2022. 

    However, in a conference call for the performance of the first quarter of 2020, Imaz admitted that there were delays in the development of the Sakakemang Block. In the Sakakemang Block, Repsol holds a participating interest (PI) of 45% as well as the block operator. Meanwhile, its partners, Petronas, have a participating interest of 45% and MOECO 10%.

Investor Daily, Page-10, Saturday, Nov 21, 2020