The Government Cuts Pertamina's Crude Oil Import Ration

The government reduced the allocation of crude oil imports proposed by PT Pertamina (Persero) to only around 50 million barrels this year. With this, Pertamina is encouraged to optimize the absorption of domestic oil production.

Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM) Djoko Siswanto said that the purchase of domestic crude oil must be continued by Pertamina. Therefore, it reduces the volume of Pertamina's crude oil imports.

"I reduced the import of Pertamina's crude oil by 8,000 barrels per day (BPD) during 2020. Around 30 million barrels a year [decreasing]," he said.

According to him, Pertamina initially proposed a volume of crude oil imports of around 80 million barrels by 2020. However, it only agreed to import about 50 million barrels of crude oil this year. The rest, Pertamina must buy domestic crude oil to cover its needs.

"Still [domestic oil purchases]. So from around 200 thousand BPD, 120 thousand BPD were bought by [Pertamina]. Around 80 thousand BPD have not been successfully purchased, "said Djoko.

Pertamina Corporate Secretary Tajudin Noor confirmed that the government encouraged the company to further maximize the use of domestic crude oil.

"And we have agreed with several companies to buy their entitlement (ration of oil)," he said.

Pertamina buys crude oil allotment in the cooperation contract contractor (KKKS) in the country after the issuance of the Minister of Energy and Mineral Resources Regulation Number 42 of 2018 concerning the priority of utilizing petroleum to meet domestic needs.

Until the beginning of August 2019, the total volume of crude oil the company had purchased reached 123.6 thousand BPD from 39 KKKS. The largest oil supply comes from the Rokan Block which is managed by PT Chevron Pacific Indonesia. The last time, Pertamina bought 650 thousand barrels of oil from ExxonMobil for the September 2019 period.

Previously, Pertamina Senior Vice President for Integrated Supply Chain Hasto Wibowo revealed that Pertamina's crude oil imports had reached 11 million barrels per month. However, after the domestic crude oil purchasing policy, the company's crude oil imports are now around 6-7 million barrels per month.

This year, the same as in 2019, the company's crude oil imports are projected to be around 6-7 million barrels per month. Most of this crude oil is imported from the Middle East because the company needs Arabian Light Crude oil, which is around 3 million barrels per month. The rest, the company is looking for light crude and medium crude oil from various sources.

Finally, at the end of last year, Pertamina imported 950 thousand barrels of crude oil per month from the United States for the February-June 2020 period. In 2019, the company has imported oil from Uncle Sam's country twice each, amounting to 650 thousand barrels per month. month in June and November.

IN INDONESIA

Pemerintah Pangkas Jatah Impor Minyak Mentah Pertamina

Pemerintah mengurangi alokasi impor minyak mentah yang diusulkan oleh PT Pertamina (Persero) menjadi hanya sekitar 50 juta barel pada tahun ini. Dengan ini, Pertamina didorong untuk mengoptimalkan penyerapan produksi minyak dalam negeri. 

Pelaksana Tugas Direktur Jenderal Minyak dan Gas Bumi Kementerian Energi dan Sumber Daya Mineral (ESDM) Djoko Siswanto mengatakan, pembelian minyak mentah dalam negeri harus dilanjutkan oleh Pertamina. Karenanya, pihaknya mengurangi volume impor minyak mentah Pertamina.

“Impor crude-nya Pertamina saya kurangi 8.000 barel per hari (bph) selama 2020. Sekitar 30 juta barel setahun [berkurangnya],” katanya.

Menurutnya, awalnya Pertamina mengusulkan volume impor minyak mentah sekitar 80 juta barel pada 2020 ini. Namun, pihaknya hanya menyetujui impor minyak mentah sekitar 50 juta barel untuk tahun ini. Sisanya, Pertamina harus membeli minyak mentah domestik untuk menutup kebutuhannya.

“Masih lanjut [pembelian minyak dalam negeri]. Jadi dari sekitar 200 ribu bph, sudah 120 ribu bph yang dibeli [Pertamina]. Sekitar 80 ribu bph belum berhasil dibeli,” tutur Djoko.

Sekretaris Perusahaan Pertamina Tajudin Noor membenarkan bahwa pemerintah mendorong perseroan untuk lebih memaksimalkan pemakaian minyak mentah dalam negeri.

“Dan kami sudah bersepakat dengan beberapa perusahaan untuk membeli entitlement (jatah minyak) mereka,” ujar dia.

Pertamina membeli minyak mentah jatah kontraktor kontrak kerja sama (KKKS) di dalam negeri setelah tebitnya Peraturan Menteri ESDM No 42 Tahun 2018 tentang prioritas pemanfaatan minyak bumi untuk pemenuhan kebutuhan dalam negeri. 

Hingga awal Agustus 2019 lalu, total volume minyak mentah yang telah dibeli perseroan mencapai 123,6 ribu bph dari 39 KKKS. Pasokan minyak terbesar berasal dari Blok Rokan yang dikelola PT Chevron Pacific Indonesia. Terakhir kalinya, Pertamina membeli minyak dari Exxon Mobil sebesar 650 ribu barel untuk periode September 2019. 

Sebelumnya, Senior Vice President Integrated Supply Chain Pertamina Hasto Wibowo mengungkapkan, impor minyak mentah Pertamina pernah mencapai 11 juta barel per bulan. Namun, setelah adanya kebijakan pembelian minyak mentah dalam negeri, impor minyak mentah perseroan kini sekitar 6-7 juta barel per bulan.

Pada tahun ini, sama dengan 2019 lalu, impor minyak mentah perseroan diproyeksikan sekitar 6-7 juta barel per bulan. Sebagian besar minyak mentah ini diimpor dari Timur Tengah lantaran perseroan membutuhkan minyak jenis Arabian Light Crude, yakni sekitar 3 juta barel per bulan. Sisanya, perseroan mencari minyak jenis light crude dan medium crude dari berbagai sumber. 

Terakhir, di akhir tahun lalu, Pertamina mengimpor minyak mentah sebesar 950 ribu barel per bulan dari Amerika Serikat untuk periode Februari-Juni 2020. Di tahun 2019, perseroan telah dua kali mengimpor minyak dari Negeri Paman Sam ini masing-masing sebesar 650 ribu barel per bulan pada Juni dan November.

Investor Daily, Page-9, Wednesday, Jan 15, 2020

Abu Dhabi Aims for Energy Sector Investment in Indonesia

Indonesia strengthens relations with the United Arab Emirates (UAE). The two countries agreed on a number of cooperation and investments. Of the 16 agreements, Indonesia and the UAE agreed on five agreements in the fields of religion, education, agriculture, health, and counter-terrorism. While there are 11 business agreements signed by the two countries, covering the fields of energy, oil, and gas, petrochemicals, ports, telecommunications, and research. The total estimated investment value obtained from these 11 agreements reached Rp 314.9 trillion or the US $ 22.89 billion.

The UAE has high confidence in the development of the energy sector business in Indonesia. A total of 11 business agreements have been signed-in part for the energy business, said the Head of the Public Information Services and Cooperation Biro Ministry of Energy and Mineral Resources, Agung Pribadi.

PT Pembangkit Jawa Bali investment (PJBI)

One of the agreements in the business sector is the construction of a floating solar power plant in Cirata Reservoir, West Java. Later, the Masdar renewable energy company (EBT) based in Abu Dhabi UAE, will partner with PT Pembangkit Jawa Bali investment (PJBI) to build Cirata Floating PLTS with a capacity of 145 megawatt peak (MWp).

The investment value in the plant is estimated to reach Rp 1.8 trillion. Cirata Floating PLTS will break the record of the largest solar power plant in the ASEAN region after PLTS in the Philippines, Cadiz Solar Powerplant of 132.5 MW.

In addition to developing EBT-based electricity, Indonesia and the UAE agreed on a number of oil and gas projects such as the development of the Balikpapan RUV V Refinery Development Master Plan (RDMP) between Pertamina and Mubadala.

Later, RDMP RU V Balikpapan will increase refinery processing capacity from 260,000 barrels per day (BPD) to 360,000 BPD and improve product quality from fuel equivalent to Euro II to Euro V. The other agreed cooperation is about developing the potential of crude oil in Balongan between Pertamina and the Abu Dhabi National Oil Company (ADNOC), to the supply of liquified natural gas (LPG) between the two companies.

In the mineral subsector, Indonesia and the UAE signed a collaboration involving Emirates Global Aluminum (EGA) and PT Indonesia Mahan Aluminum (Mind Id) in the context of increasing the production of ingot alloys and billets.

During the test period (oba, planned additional production is around 20,000 tons with a current normal production capacity of 250,000 tons. In fact, the Middle East investment record in Indonesia is less encouraging and the value is not significant.

For example, the promise of Saudi Aramco, the Saudi oil and gas giant to build a refinery in Cilacap, Central Java, with Pertamina. The plan is not clear because an agreement has not been established. The negotiations between Pertamina and Aramco began in 2014, or have been in vain for six years.

Then there was the Food and Energy Estate project in Merauke (MIFEE) in Papua in 2010. This 2.5 million hectare project is predicted to save IDR 4.7 trillion in foreign exchange through reducing food imports.

Saudi Binladin Group

Saudi Binladin Group, a construction conglomerate from Saudi Arabia, expressed interest in entering the project. There is even a mention of US $ 4 billion worth of investment interest. But until now there has been no continuation of the Bin Ladin Group investment plan.

During President Joko Widodo's visit to Saudi Arabia on 14 ~ 15 April 2019, Prince Muhammad bin Salman expressed interest in a $ 6 billion investment in the oil and gas sector and tourism in Indonesia. But until now there is also no clarity. 

       Previously, during the state visit of Saudi Arabia's King Salman bin Abdul Aziz AL Saud to Indonesia in 2017, the investment was the only US $ 6 billion or Rp 89 trillion. This figure is far from the value of Saudi Arabia's investment in China which reached the US $ 65 billion or Rp870 trillion.

IN INDONESIA

Abu Dhabi Incar Investasi Sektor Energi di Indonesia

Indonesia mempererat hubungan dengan Uni Emirat Arab (UEA). Kedua negara menyepakati sejumlah kerjasama dan Investasi dengan. Dari 16 perjanjian, Indonesia dan UEA menyepakati lima perjanjian di bidang keagamaan, pendidikan, pertanian, kesehatan dan penanggulangan terorisme. Sementara ada 11 perjanjian bisnis yang ditandatangani oleh kedua negara, meliputi bidang energi, minyak dan gas, petrokimia, pelabuhan, telekomunikasi dan riset. Total estimasi nilai investasi yang diperoleh dari 11 perjanjian ini mencapai Rp 314,9 triliun atau US$ 22,89 miliar.

UEA menaruh kepercayaan tinggi terhadap pengembangan bisnis sektor energi di Indonesia. Sebanyak 11 perjanjian bisnis yang berhasil ditandatangani  sebagian untuk bisnis energi, kata Kepala Blro Komunkasi Layanan Informasi Publik dan Kerjasama Kementerian ESDM, Agung Pribadi.

Dari sejumlah kesepakatan di sektor bisnis itu salah satunya adalah pembangunan pembangkit Iistrik tenaga surya (PLTS) Terapung dl Waduk Cirata, Jawa Barat. Kelak, perusahaan energi baru terbarukan (EBT) Masdar yang berbasis di Abu Dhabi UEA, akan bermitra dengan PT Pembangkit Jawa Bali investasi (PJBI) membangun PLTS Terapung Cirata dengan kapasitas 145 mega watt peak (MWp).

Nilai investasi di pembangkit tersebut diperkirakan mencapai Rp 1,8 triliun. PLTS Terapung Cirata bakal memecahkan rekor pembangkit tenaga surya terbesar di kawasan ASEAN setelah PLTS di Filipina, Cadiz Solar Powerplant sebesar 132,5 MW.

Selain pengembangan listrik berbasis EBT, Indonesia dan UEA menyepakati sejumlah proyek migas seperti pengembangan Refinery Development Master Plan (RDMP) RU V Balikpapan antara Pertamina dan Mubadala. 

Kelak, RDMP RU V Balikpapan akan meningkatkan kapasitas pengolahan kilang dari 260.000 barel per hari (bph) menjadi 360.000 bph serta meningkatkan kualitas produk dari BBM setara Euro II menjadi setara Euro V. Adapun kerjasama Iainnya yang disepakati adalah mengenai pengembangan potensi minyak mentah di Balongan antara Pertamina dan Abu Dhabi National Oil Company (ADNOC), hingga penyediaan liquified natural gas (LPG) antara kedua perusahaan.

Pada subsektor mineral, Indonesia dan UEA menandatangani kerjasama yang melibatkan Emirates Global Aluminium (EGA) dan PT Indonesia Mahan Aluminium (Mind Id) dalam rangka penambahan produksi ingot alloy dan billet. 

Pada masa uji (oba, penambahan produksi direncanakan sekitar 20.000 ton dengan kapasitas produksi normal saat ini 250.000 ton. Sejatinya, catatan investasi TimurTengah di Indonesia kurang begitu menggembirakan dan nilainya belum signifikan. 

Contohnya janji Saudi Aramco, raksasa migas Arab Saudi untuk membangun kilang di CiIacap, Jawa Tengah, bersama Pertamina. Rencana tersebut tidak jelas karena belum terjalin kesepakatan. Negosiasi Pertamina dan Aramco dimulai sejak tahun 2014 alias sudah enam tahun Ialu sia-sia.

Kemudian ada proyek Food and Energy Estate di Merauke (MIFEE) Papua pada tahun 2010 silam. Proyek seluas 2,5 juta hektare ini digadang-gadang bisa menghemat devisa Rp 4,7 triliun melalui Pengurangan impor pangan. 

Saudi Binladin Group, konglomerasi konstruksi asal Arab Saudi, sempat menyatakan ketertarikan untuk masuk ke proyek ini. Bahkan disebut-sebut ada minat Investasi senilai US$ 4 miliar. Tapi hingga kini tidak ada kelanjutan atas rencana investasi Bin ladin Group tersebut. 

Dalam kunjungan Presiden Joko Widodo ke Arab Saudi pada 14~15 April 2019, Pangeran Muhammad bin Salman menyatakan minat Investasi senilal US$ 6 miliar di bidang minyak dan gas serta pariwisata di Indonesia. Namun hingga kini juga belum ada kejelasan. 

King Salman and Jokowi

    Sebelumnya, dalam lawatan kenegaraan Raja Arab Saudi Salman bin Abdul Aziz Al Saud ke Indonesia pada 2017, investasi yang masuk hanya USS 6 miliar atau Rp 89 triliun. Angka ini terpaut jauh dari nilai investasi Arab Saudi ke China yang mencapai US$ 65 miliar atau Rp 870 triliun.

Kontan, Page-14, Tuesday, Jan 14, 2020

Java FSRU 1 Ship Construction Progress Reaches 65%

The progress of the construction of the floating storage Regasification unit (FSRU) as part of the Java 1 Steam Gas Power Plant project has reached 62.5%. Upstream Director of PT Pertamina (Persero) Dharmawan H Samsu welcomed positively and appreciated all those who had contributed to the construction process of the Java 1 FSRU project, including the shipbuilding contractor, Samsung Heavy Industries (SHI).

This release is an important stage for completing the scope of the Java project 1. We hope that the success of the achievement can continue so that the entire project is completed on target, "he said.

The release of the Java 1 FSRU Ship took place at the SHI shipyard in Geoje-si, South Korea, last Saturday (11/1).

Floating Storage Regasification Unit (FSRU)

Dharmawan revealed, Pertamina hopes that SHI can complete the construction of the Java 1 FSRU ship on time, on quality, on budget and according to requirements. Later, the FSRU will become the main supporting facility for Java PLTGU 1. The construction of the Java 1 FSRU ship is projected to be completed in November 2020 and enter Indonesian waters in mid-January 2021.

The commissioning of FSRU vessel regasification is targeted for March 2021. The FSRU will rationalize the LNG, which originates from BP Tangguh, Papua, then supplies the gas produced to the Java 1 PLTGU plant. Meanwhile, the PLTGU's commercial operation target is December 2021.

Kontan, Page-14, Tuesday, Jan 14, 2020

Upstream situation is increasingly critical

In addition to production which continues to fall, upstream oil and gas investment has also not been able to answer the production problem. Investors need contract certainty for investment stability.

The situation in the upstream oil and gas sector in Indonesia is considered increasingly critical. Because production is ready to sell or [lifting both types of primary energy sources continues to fall from year to year. Therefore, improvements need to be made as soon as possible to increase production and attract maximum investment in the country.

Based on data from the Ministry of Energy and Mineral Resources, [oil lifting in 2019 recorded 746,000 barrels per day or below the target of 775,000 barrels per day. The realization of lifting natural gas is only 1,060 barrels of oil equivalent per day and still below the target of 1,250 barrels of oil equivalent per day. The decline in oil lifting has occurred since 2016, while natural gas lifting has continued to decline since 2014.

According to Pri Agung Rakhmanto, a lecturer at the Faculty of Earth and Energy Technology at Trisakti University, Jakarta, the upstream oil and gas situation in Indonesia can be said to be in crisis. In addition to declining production, upstream oil and gas investment in Indonesia is also in a crisis situation. If the situation is not improved enough, the condition of Indonesia's upstream oil and gas will sink even deeper.

"Crisis and critical. That is the condition of upstream oil and gas in Indonesia. Called a crisis because existing investments have not been able to answer the problem of production which continues to decline. It is called critical if this situation continues, "said Pri Agung.

In terms of upstream oil and gas investment, during 2019 it collected 12.5 billion US dollars or lower than the target set, which was 13.4 billion US dollars. In 2018 the realization of upstream oil and gas investment will reach 12.6 billion US dollars. In the last five years, the highest investment was recorded in 2015, amounting to 17.9 billion US dollars.

"Indonesia has not been able to attract enough investment from world-class upstream oil and gas actors, both for new oil and gas reserve discovery projects and development projects to increase production. Upstream oil and gas investment has been around 60-70 percent, only for existing routine operational costs, "Said Pri Agung.

Not a Commodity

Pri Agung added, improvements in upstream oil and gas investment should start from the perspective of the state managing its natural resources. According to him, oil and gas resources should be used as capital for development in the country, not as an export commodity to collect foreign exchange In addition, policy improvements in taxation, fiscal and oil and gas revenue sharing are also urgent. Indonesia's oil and gas production has not been able to meet domestic needs.

The consumption of national oil will reach 1.5 million barrels per day, while domestic oil production is less than 800,000 barrels per day. LPG consumption is around 7 million tons per year, half of which must be imported. This condition causes Indonesia to often experience a deficit in its oil and gas trade balance.

Last weekend, in Jakarta, Energy and Mineral Resources Minister Arifin Tasrif said the government would no longer require gross profit-sharing schemes in the auction of new oil and gas working areas.

The contractor is given freedom of choice, namely a gross split and cost recovery that can be recovered (cost recovery). Previously, for new oil and gas working areas, the revenue sharing that the government imposed on contractors was gross split.

"There are already two schemes (gross split or cost recovery), but the cost recovery scheme will be fixed first," Arifin said when asked for a profit-sharing scheme at the upcoming oil and gas working area auction.

Previously, at the annual general meeting of the Indonesian Petroleum Association (IPA), IPA Vice President Ronald Gunawan alluded that investors needed contract certainty for investment stability. Because upstream oil and gas investment is a capital-intensive and high-risk investment. The stability of the contract is believed to increase the attractiveness of Indonesia's upstream oil and gas investment in the eyes of investors.

"To simplify the bureaucracy, in the last two or three years there have been positive signals. We hope that there will be continuous improvements in the future, "said Ronald.

Kompas, Page-13, Tuesday, Jan 14, 2020

2020, Gas Marketing will be More Aggressive

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said it would be more proactive in marketing national gas, both to the domestic and foreign markets.

Referring to the data of SKK Migas, lifting or gas distribution last year was recorded at 5,934 million cubic feet per day / mmscfd, below the target set in the 7,000 mmscd state budget. One of the causes of low gas lifting is the reduction in gas production following the cancellation of liquid / LNG natural gas supply by the buyer.

In 2020, Deputy Finance and Monetization of SKK Migas Arief S Handoko, his party does not want the gas production reduction or curtailment to happen again. For this reason, he will be more proactive in marketing domestic LNG production.

"Try to avoid curtail and try to sell as soon as possible," he said.

However, it will not necessarily sell LNG production to the spot market. He said he would still aim for a mid-term LNG purchase contract to obtain a very good price. This is to ensure that state revenues from LNG sales remain high. Therefore, the export market is not the only target of SKK Migas.

"If it cannot be sold abroad, it is offered to domestic partners, such as PT PGN Tbk and PT PLN (Persero)," explained Arief.

So far, all planned LNG production volumes have been contracted, aka no remaining cargo (uncommitted cargo). However, the projected amount of LNG production still has the potential to rise so that the possibility of uncommitted cargo in 2020 is still present.

This follows the plan of PT Pertamina (Persero) to boost gas production in the Mahakam Block. This oil and gas block is a supplier of the Bontang LNG Plant. Because when making the annual LNG delivery plan (annual delivery program), it does not accommodate the increased production from the Mahakam Block.

the Mahakam Block

"What is uncommitted is that there are about five cargoes because Mahakam has more production and has not entered the plan, because they [Pertamina] are also not confident," explained Arief.

In 2020, the company targets LNG production to reach 211.9 cargo standards, namely from Tangguh Refinery 122.3 cargo standards and Bontang 89.6 cargo standards. This production target is lower than last year which reached 252 cargo standards, of which Tangguh Refinery 120 cargo standards and 132 Bontang cargo standards.

Unfortunately, due to the fall in LNG prices on the spot market that pushed buyers to cancel cargo orders, the purchase of LNG in 2019 did not reach the target. As of December, LNG purchases were recorded at only 229.1 cargo standards, with details from the 117.4 Tangguh cargo standard and 111.4 cargo standard Bontang.

This LNG distribution did not reach the target either for domestic or export. In 2019, the target for LNG distribution into the country is 67 cargo standards and 185 cargo exports. While the distribution realization for the domestic market is only 60.5 cargo standards and 168.6 cargo exports. 

    Not only LNG, Arief added, his party would also strive for pipeline gas distribution according to the contract. The reason is, although domestic gas distribution is increasing, some of them are still under contract.

"If there is an allocation but a little absorption, it will be relocated to another buyer," he said.

Western Buyer

According to Arief, he also must find a buyer to replace the Western Buyer Extension (WBX). This is because the LNG buyer on Japan's west coast will probably not renew his LNG purchase contract from the Bontang refinery, which expires at the end of 2020. 

     He explained that negotiations with the WBX had been going on since 2019 and had not yet reached an agreement. Because the contract expires in late 2020, it will also look for other buyers.

"We are looking for a replacement for WBX if it is not renewed. WBX does not want to extend, but we are trying to find other buyers, "he said.

However, in 2020, he will still open negotiations with the WBX. Although he admitted, not all WBX members would agree to extend their contracts with Indonesia. Negotiations carried out last year were stopped because of the LNG price problem.

"We are still trying to be extended. Although not all members of the consortium will extend the contract. At this time, we will start renegotiating after getting the price reference from the sale at the end of 2019 yesterday, "explained Arif.

One option is that LNG, which is usually sold to WBX, can be sold to domestic buyers even at low prices. This is considered far better than selling the LNG to the international spot market at a low price.

For information, this LNG sales contract to Japan is with five companies on Japan's west coast or commonly called Western Buyers. This LNG supply is brought from the Bontang LNG Plant which is operated by Badak LNG. These five companies are Chubu Electric Co., Kansai Electric Power Co, Kyushu Electric Power Co, Nippon Steel Corp dan Osaka Gas Co Ltd

Investor Daily, Page-9, Tuesday, Jan 14, 2020

Pertamina Is Ready to Integrate TPPI with GRR Tuban

After controlling 51% of Tuban Petro's majority shares, Pertamina is ready to integrate PT Trans-Pacific Petrochemical Indotama (TPPI) Refinery which is a subsidiary of Tuban Petro with the Grass Root Refinery (GRR) Tuban mega project.

Nicke Widyawati

Pertamina President Director Nicke Widyawati explained that the restructuring of Tuban Petro is part of Pertamina's refinery which prioritizes flexibility, in which the refinery mode can switch to either petrochemical or mogas modes. This makes the refinery production can adjust to the demand at the time of operation.

Then with the integrated supply of raw materials between one refinery and other refineries, it is hoped that it can also improve efficiency in terms of both operational expenses and capital expenditures, so as to achieve maximum profitability. With a maximum level of profitability, Pertamina refinery projects will be able to become sustainable businesses in the future.

"So it is clear that our ongoing refinery project will become a sustainable business because it can adapt to market needs and be supported by integration between our refineries and other Pertamina infrastructure," Nicke said.

Nicke said that Pertamina is currently developing refineries in 6 locations, the construction of which is integrated with the construction of a petrochemical plant. One of them is the Tuban GRR which will later be integrated with TPPI, with a 7 km connecting pipeline being built.

Nicke added, the petrochemical business market opportunity is currently around Rp 40-50 trillion per year. In addition, the petrochemical business also has a higher margin than fuel oil.

Nicke said the move to integrate the TPPI refinery with GRR in Tuban was carried out by Pertamina by carrying out a corporate action to purchase Rp. 3.2 trillion in the Tuban Petro series B shares, so that Pertamina currently controls a 51 percent majority stake. By controlling majority shares, Pertamina has controlling shares in order to develop TPPI.

Nicke explained, starting in 2020 according to the RKAP, Pertamina will increase the aromatic production of TPPI refineries from currently 46 thousand tons to 55 thousand tons. In the long term, Pertamina will also build an Olefin Center, so that later the TPPI will produce petrochemicals of 700 thousand tons per year.

At the same time, the Tuban GRR megaproject will have a petrochemical production facility with 1,205 ktpa of polypropylene products, 1,317 ktpa of paraxylene and 750 ktpa of polyethylene.

Investor Daily, Page-9, Tuesday, Jan 14, 2020

SKK Migas Spurs LNG Sales

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) will take aggressive steps in selling liquefied natural gas (LNG) while at the same time reducing production or curtailment in 2020.

Deputy of Finance and Monetization of SKK Migas Arief Setiawan Handoko hopes that the reduction in gas production (curtailment) will no longer be repeated in 2020. Because, one of the impacts of the curtailment in 2019 is the production performance of ready to sell (lifting) recorded only 5,934 million cubic feet per day (MMscfd), below the state budget target of 7,000 MMscfd.

"This year we are trying to avoid curtailment and sell the products as soon as possible," he said.

Last year, global LNG price pressures caused national LNG producers to cancel some of their production to avoid losses. Throughout 2019, SKK Migas successfully marketed 229.1 LNG cargo standards spread out with details of 168.6 cargoes to the export market and 60.5 cargoes to the domestic market. The LNG supply comes from 111.7 cargo Bontang refinery and 117.4 cargo Tangguh refineries.

Meanwhile, SKK Migas targets LNG production to reach 211.9 cargo standards, namely from Tangguh Refinery 122.35 cargo standards and Bontang 89.6 cargo standards by 2020.

This LNG production target is lower and the realization of production or last year's target. Arief added that the entire planned LNG production volume had been contracted or there were no remaining cargo (uncommitted cargo).

In addition to marketing LNG, SKK Migas also encourages pipeline gas distribution in accordance with the contract. Admittedly, domestic gas distribution is increasing, but some of them are still under contract. For example, such as the use of natural gas for the industrial sector, a contract of 1,910.58 BBTud was recorded, while only those that were realized.

A total of 1,600.12 BBTud, in addition, the electricity sector with contracts 1,151.22 BBTud, while 849.44 BBtud were realized. Likewise, for the fertilizer sector, gas contracts are recorded.

A total of 830.27 BBTud, while 748 BBTud was channeled, the export of piped gas was also recorded under the contract awarded with 723.99 BBTud from the contract of 809.85 BBTud. On the other hand, SKK Migas Head Dwi Soetjipto hopes that world LNG prices continue to improve. According to him in the last tender in 2019, the prices recorded had gone up by around 11.6%, with Brent valued at the US $ 8 per MMBTU.

"Indeed, sometimes prices are very low because of the situation. So the warming of Iran - the United States has caused prices to rise, "he said.

Meanwhile, SKK Migas also prioritized the domestic market after the contract with Westem Buyer Extension (WBX) ended in 2020. Arief Setiawan Handoko said that his party would offer it to domestic buyers before marketing it overseas. According to him, the step was taken to provide added value to the domestic industry.

"Domestic only. For example, selling cheap is okay, enjoying the local industry. "Instead of being sold on the cheap spot market abroad, it's better to sell cheap in the country," he said.

At present, SKK Migas continues to look for buyers to replace WBX. This was taken after LNG buyers on Japan's west coast were not expected to renew their LNG purchase contracts from the Bontang refinery, which expires at the end of 2019.

Actually, SKK Migas has made offers to WBX since last year, but until now there has been no agreement with these buyers. The WBX is a sales contract represented by five companies on the west coast of Japan. These five companies are Chubu Electric Co., Kansai Electric Power Co., Kyushu Electric Power Co., Nippon Steel Corp., and Osaka Gas Co. Ltd.

The LNG supply is brought from the Bontang LNG Plant which is operated by Badak LNG. Difficult negotiations with the WBX occurred regarding the LNG price agreement. Arief admitted that not all WBX members would agree to extend their contracts with Indonesia.

"When we will start renegotiating again after getting the price reference from the sale at the end of 2019," he added.

On the other hand, Wood Mackenzie, a global energy consultant, said market liberalization and low spot LNG prices had given birth to new players.

Principal Analyst WoodMac Asti Asra said lower spot LNG prices have made buyers look for ways to get cheaper access.

   According to him, in 2020, many companies will directly seek LNG directly to the spot market with short and medium-term agreements. On the other hand, gas demand growth in China has slowed by around 9% in 2019 compared to the previous year of 17%. The trade war is said to have a domino effect on the Chinese economy.

Woodmac Senior Manager Miaoni Huang said that with the power of the Siberian pipeline operating and having the first gas flowing from Russia to northern China, the need for winter LNG could be cut.

"In addition, domestic gas production is still increasing at a faster pace than in previous years. If this continues in 2020, gas imports will face slower growth. "

Bisnis Indonesia, Page-20, Tuesday, Jan 14, 2020

Pertamina Continues to Work on Rokan

Oil production from the Rokan Block in Indonesia continues to decline by 20,000 barrels per day due to the absence of well drilling activities since 2018. To withstand the natural decline, PT Pertamina will drill 20 wells in the Rokan Block in 2020.

the Rokan Block

Pertamina Corporate Communication Vice President Fajriyah Usman said the target for drilling 20 wells in the Rokan Block was an initial assumption set by the state-owned oil and gas company.

Fajriyah Usman

"As an initial assumption to withstand the rapid rate of natural decline (natural decline), said Fajriyah.

Fajriyah explained that, despite having an initial assumption of the number of drilling wells in the Rokan Block, the true number of development wells was still under technical study by Pertamina's management. 

    Previously, Pertamina targeted the development well drilling to be carried out at the end of 2020. Now, so that the target could be realized faster, Pertamina continued to make the transition process between Pertamina as the operator of the Rokan Block after the Chevron Pacific Indonesia (CPI) contract which expires in 2021 could be immediately resolved.

Fajriyah explained, to date both Pertamina and Chevron continue to discuss finalization of the Rokan Block transition. According to him, there are still a number of important points that must be resolved as soon as possible by both parties. But Fajriyah was still not willing to explain in detail about these points.

"(In addition) we have also prepared investments," explained Fajriyah without being willing to disclose the value of the investment prepared.

Deputy of the Special Keqa Planning Unit Implementing the Upstream Oil and Gas Business Activities (SKK Migas) Jafee Suardin Arizon said the transition to the management of the Rokan Block depends on the results of talks between Pertamina and Chevron.

"We only help set up a joint program with Pertamina. Later we will see what business to business results will be like," he said

Jafee said, if the B to B discussions between the two parties were completed, Pertamina could immediately start the drilling and investment plan in the Rokan Block. The drilling of wells in this block is targeted to start in the third quarter of 2020 and will be carried out in stages. The transition process over the management of the Rokan Block has become one of the focuses of the government in 2020.

Arifin Tasrif

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif emphasized that the transition process from Chevron Pacific Indonesia to Pertamina could be completed in 2020. Arifin said he was pushing for accelerated implementation of the oil and gas drilling process in the block located in Riau Province. Of the 72 drilling well targets in the Rokan Block, at least Pertamina has been able to do 20 drilling this year. Thus, it is expected that the rate of decline will not deepen.

IN INDONESIA

Pertamina Terus Upayakan Garap Rokan

Produksi minyak dari Blok Rokan di RIau terus merosot 20.000 barel per hari akibat tidak adanya kegiatan pemboran sumur sejak tahun 2018. Untuk menahan laju penurunan alamiah atau natural decline tersebut, PT Pertamina akan melakukan pemboran 20 sumur di Blok Rokan pada tahun 2020 ini. 

    Vice President Corporate Communication Pertamina Fajriyah Usman mengatakan, target pemboran 20 sumur di Blok Rokan merupakan asumsi awal yang dipasang oleh perusahaan migas milik negara ini. 

"Sebagai asumsi awal untuk menahan deras laju penurunan alamiah (natural decline), kata Fajriyah.

Fajriyah menjelaskan, meskipun telah memiliki asumsi awal jumlah pengeboran sumur di Blok Rokan, sejatinya jumlah sumur pengembangan masih dalam kajian teknis oleh manajemen Pertamina. Sebelumnya, Pertamina menargetkan pemboran sumur pengembangan dilakukan di akhir tahun 2020. 

    Nah, supaya target tersebut bisa Iebih cepat terealisasi, Pertamina terus mengupayakan agar proses transisi antara Pertamina sebagai operator Blok Rokan setelah kontrak Chevron Pacific Indonesia (CPI) yang habis di tahun 2021 bisa segera diselesaikan. 

Fajriyah menjelaskan, hingga saat ini baik Pertamina dan Chevron masih terus melakukan diskusi finalisasi mengenai transisi Blok Rokan. Menurut dia, masih ada sejumlah poin penting yang harus diselesaikan sesegera mungkin oleh kedua pihak. Namun Fajriyah masih belum bersedia menjelaskan secara rinci seputar poin-poin tersebut. 

"(Selaln itu) investasi juga telah kami siapkan," terang Fajriyah tanpa bersedia membeberkan nilai investasi yang disiapkan.

Deputi Perencanaan Satuan Keqa Khusus Pelaksana kegiatan Usaha Hulu Minyak dan gas Bumi (SKK Migas) Jafee Suardin Arizon mengatakan, transisi alih kelola Blok Rokan bergantung pada hasil pembicaraan antara Pertamina dan Chevron. 

"Kami hanya membantu menyiapkan program bersama dengan Pertamina. Nanti kami lihat hasil business to business seperti apa," ujar dia.

Jafee menuturkan, jika pembahasan B to B kedua belah pihak rampung, maka Pertamina dapat segera memulai rencana pengeboran dan investasi pada Blok Rokan. Adapun pengeboran sumur di blok ini ditargetkan mulai kuartal III-2020 dan dilakukan secara bertahap. Proses transisi alih kelola Blok Rokan menjadi salah satu fokus pemerintah tahun 2020 ini. 

Menteri Energi dan Sumber Daya Mineral (ESDM) Arifin Tasrif menekankan, agar proses transisi dari Chevron Pacific Indonesia ke Pertamina bisa selesai tahun 2020. Arifin mengatakan, pihaknya mendorong percepatan pelaksanaan proses pemboran migas di blok yang terletak di Provinsi Riau itu. 

     Dari target pengeboran 72 sumur di Blok Rokan, paling tidak Pertamina sudah bisa melakukan 20 pengeboran pada tahun ini. Dengan demikian, diharapkan laju penurunan tidak semakin dalam.

Kontan, Page-14, Monday, Jan 13, 2020

Minister of EMR Finalizes Collaboration with UAE

Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif held a working visit to Abu Dhabi, United Arab Emirates (UAE) on Saturday (11/1) to Tuesday (1/14). The work visit precedes the planned visit of President Joko Widodo (Jokowi) on Sunday (12/1) to witness the signing of several business cooperation agreements in the energy and mineral resources sector.

According to the Head of the Communication, Public Information Service and Cooperation Bureau of the Ministry of Energy and Mineral Resources, Agung, the signed business cooperation document will be exchanged at the United Arab Emirates Presidential Office, Qasr Alwatan and witnessed by the two heads of state. 

    During his visit, Minister Arifin had a meeting with the Minister of State of the United Arab Emirates, as well as the CEO of the Abu Dhabi National Oil Company (Adnoc). The meeting also discussed the exploration of cooperation between PT Pertamina with Adnoc and Mubadala.

"At present, all documents are brought by Adnoc and Mubadala. If both parties agree, a 12 January 2020 cooperation agreement will be signed in Abu Dhabi," Agung said.

In addition, the Minister of Energy and Mineral Resources has also witnessed the signing of the Addendum of Memorandum of Understanding (MoU) between Emirates Global Aluminum (EGA) and PT Indonesia Asahan Aluminum (lnalum) regarding technology transfer that will be beneficial in increasing mining production.

IN INDONESIA

Menteri ESDM Finaslisasi Kerjasama dengan UEA

Menteri Energi dan Sumber Daya Mineral (ESDM) Arifin Tasrif menggelar kunjungan kerja ke Abu Dhabi, Uni Emirat Arab (UEA) pada Sabtu (11/1) hingga Selasa (14/1). Adapun kunjungan kerja tersebut mendahului rencana kunjungan kenegaraan Presiden Joko Widodo (Jokowi) pada Minggu (12/1) untuk menyaksikan beberapa penandatanganan kerjasama bisnis di sektor energi dan Sumber daya mineral.

Menurut Kepala Biro Komunikasi, Layanan Informasi Publik, dan Kerjasama Kementerian ESDM Agung Pribadi, dokumen kerjasama bisnis yang telah ditandatangani itu akan dipertukarkan di lstana Kepresidenan Uni Emirat Arab, Qasr Alwatan dan disaksikan kedua kepala negara. 

    Dalam kunjungannya, Menteri Arifin sempat melakukan pertemuan dengan Minister of State Persatuan Emirat Arab, sekaligus CEO Abu Dhabi National Oil Company (Adnoc). Dalam pertemuan itu juga dibahas mengenai penjajakan kerjasama antara PT Pertamina dengan Adnoc dan Mubadala. 

"Saat ini semua dokumen dibawa oleh Adnoc dan Mubadala. Bila kedua pihak sepakat, akan dilakukan penandatangan kerjasama 12 Januari 2020 di Abu Dhabi," kata Agung.

Selain itu, Menteri ESDM juga telah menyaksikan penandatangan Addendum of Memorandum of Understanding (MoU) antara Emirates Global Aluminium (EGA) dan PT Indonesia Asahan Aluminium (lnalum) mengenai transfer teknologi yang akan bermanfaat dalam meningkatkan produksi pertambangan.

Kontan, Page-14, Monday, Jan 13, 2020