Environmental Audit Completed, Rokan Block's Fate in the Hands of the Ministry of Energy and Mineral Resources

The fate of the continued development of the Rokan Block is now in the hands of the Ministry of Energy and Mineral Resources (ESDM) after the Environmental audit was completed in August 2020.

the Rokan Block by Chevron

Deputy for Maritime Sovereignty and Energy Coordination at the Coordinating Ministry for Maritime Affairs and Investment Purbaya Yudhi Sadewa said the recommendations given by the Environmental audit team had reached the Coordinating Ministry for Maritime Affairs and Investment.

"It is still in line with the plan so far. There are almost no obstacles," he said

Purbaya said, currently the finalization stage is in the hands of the Ministry of Energy and Mineral Resources, especially to ensure the implementation of the head of agreement (HoA). However, it is a bit difficult to ensure that the HoA can be signed this week. Although he did not specify, he said Chevron's drilling plan for next November had not changed.

Blogger Agus Purnomo in SKK Migas

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) confirmed that the Rokan Block Environmental audit process was completed in August this year. Acting Head of Program and Communication Division of SKK Migas Susana Kurniasih said PT Chevron Pacific Indonesia (CPI) is considered to carry out management in accordance with environmental management laws and regulations.

"The results of the audit have been reported to the Coordinating Minister for Marves and then SKK Migas and Chevron will sign ahead of the agreement for the management of the Rokan Block during the transition period," said Susana.

The HoA that will be signed includes a commitment to drilling activities in November 2020 and drilling in 2021. Not only that, but HoA will also include the post-mining recovery fund reserve, whose activities will be carried out by Pertamina Hulu Rokan (PHR). Susana ensured that this would not interfere with PHR's operating costs.

"The finalization process is being carried out, all parties hope it will be completed this September," said Susana.

Kontan, Page-13, Monday, Sept 7, 2020

Inpex considers a targeted review of the Abadi LNG project's EIA

Inpex Corporation, the operator of the Masela Block, is considering a review of the schedule for completing the Environmental Impact Analysis (EIA/Amdal) for the Abadi Liquefied Natural Gas (LNG) Project. Even though it continued to roll, the work on the Amdal for this gas project was hampered by the Covid-19 pandemic.

Acting Corporate Communication Manager of Inpex Masela Ltd Moch N Kurniawan said that the EIA study plan for the Abadi LNG Project is carried out in accordance with the work plan schedule that has been approved by the government in the development plan / POD of the Abadi Field, Masela Block. However because it happened the Covid-19 pandemic, his party is considering reviewing the EIA work plan schedule with government approval.

Masela Block

"We are currently discussing with relevant government agencies to take the best steps in mitigating the EIA schedule due to the Covid-19 pandemic," he said.

Kurniawan explained that his party had completed several important activities related to the preparation of the EIA document for the Abadi LNG Project, namely announcements and public consultations, as well as government approval for the Environmental Impact Analysis Terms of Reference (KA ANDAL) document. 

    Currently, the EIA process is in the environmental baseline data collection stage, including environmental baseline surveys in the dry season which has been completed 100% and the wet season which still reaches 60%.

"This is in the framework of the environmental impact analysis and modeling process," said Kurniawan.

To complete the environmental baseline survey for the rainy season, his party will carry out several activities including taking surface water samples, measuring river discharge, and observing marine mammals. To complete the remaining 40% of the wet season environmental baseline, further sampling and/or other methodologies will be carried out which will be consulted with the relevant government authorities.

Kurniawan continued that the next important step was completing the preparation of the Environmental Impact Analysis (ANDAL) document, Environmental Management Plan (RKL), and Environmental Monitoring Plan (RPL).

"After that, the final stage is the assessment and approval of the ANDAL, RKL and RPL documents by the Central Amdal Assessment Commission," he said.

Dwi Soetjipto

Previously, the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that the completion of the Amdal was a requirement so that the Abadi LNG Project could continue to the next stage, including land acquisition. He said that the Amdal survey had stopped due to the Covid-19 pandemic, but is now taking place again.

Meanwhile, regarding land acquisition, Maluku Governor Murad Ismail is committed to facilitating it. The Abadi LNG project is a major project whose development plan was directly witnessed by President Joko Widodo so that the local government will fully support the completion of this project. Moreover, this project is related to the interests of the Maluku people.

Based on SKK Migas data, in addition to Amdal, Inpex is still processing auctions for the work on the front end engineering design / FEED of the LNG plant land facilities, floating production, storage, and offloading / FPSO facilities, gas pipelines, as well as subsea umbilical, riser, and flowline (SURF) facilities

Investor Daily, Page-10, Monday, August 24, 2020

The fate of the tuna block is unclear

The news about the departure of oil and gas contractors continues to emerge. It is a partner of Premier Oil Tuna BV in the Tuna Block, namely Vietnam Oil and Gas Group (Petrovietnam), which is reportedly out. In exchange, a Russian company is exploring the block.

Petrovietnam

Acting Head of Program and Communication Division of SKK Migas, Susana Kurniasih, revealed that his party is still waiting for the assurance of Premier Oil, especially regarding the planned drilling agenda for this year.

Premier Oil

"Premier Oil already has a proposal for drilling two wells in 2020, but Premier said he would look for a partner before drilling," said Susana Kurniasih.

the Tuna Block by Premier Oil

The continuation of the Tuna Block depends on the seriousness of Premier Oil to complete its commitments. Susana explained that the exploration period for cooperation contract contractors (KKKS) is given for six years. An extension of the exploration period can be granted for a maximum of three years. The Tuna Working Area (WK) has received an extension period twice since it was first signed on March 21, 2007.

"The government has given two extension periods of exploration time and now this is the last year of the second extension," Susana explained.

Deputy Head of SKK Migas, Fatar Yani Abdurrahman, stated that it was true that there was news about the plans of foreign companies to become Premier Oil partners in the Tuna Block.

"So far there is no official information from Premier Oil, we are still waiting. It's just that the partner's plan has just arrived," said Susana Kurniasih.

It is an oil and Rosneft gas company from Russia that plans to join Premier Oil after news of the departure of one of the partners in the block. However, Fatar has not specified the participation rights that will be acquired by the new Russian partner.

The operator of the Tuna Block is Premier Oil Tuna BV with a participating interest of 65%. Fatar said that the Covid-19 pandemic had an impact on the drilling plan by Premier Oil, even though drilling was needed to ensure the Tuna Block Plan of Development (PoD). Not only that, but this is also considered to have an impact on the certainty of partners in the block.

As a flashback, in 2014 Premier Oil discovered potential reserves of 100 million barrels of oil equivalent (mmboe). Even Premier Oil said that currently, the potential for the Tuna Block could reach 100 million cubic feet to 150 million standard cubic feet per day (mmscfd). In 2017, Premier Oil and Petrovietnam signed a memorandum of understanding (MoU) for the sale of gas from the Tuna Block in the North Natuna Sea to Vietnam.

The signing of the MoU was carried out on the sidelines of the 2017 Asia Pacific Economic Cooperation Summit (APEC Summit) in Da Nang, Vietnam. The government has also provided guarantees for investment certainty in Natuna waters, especially the location of the Tuna Block which is directly adjacent to Vietnam.

Kontan, Page-12, Friday, August 14, 2020

Change of ownership of IDD projects must be completed this year

 

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the change in ownership of Participating Shares (participating interest / PI) for the Indonesia Deepwater Development (IDD) project must be completed this year. Otherwise, the deep-sea gas project will not start immediately.

Dwi Soetjipto

Head of SKK Migas Dwi Soetjipto said that Chevron Indonesia as the operator of the IDD Project is still looking for an oil and gas company to work on the project. If indeed there will be a change in PI ownership, his party emphasizes that it can be completed this year. Because if it takes too long the IDD project may not be developed immediately.

“Actually, the real timeline [change of PI owner] depends on the deal. But I want to be this year. If it doesn't start immediately, the project won't take place, ”he said.

the IDD project  by Chevron

According to him, the urgency of completing the change in shareholders in the IDD Project is different from the Abadi LNG Project, the Masela Block. 

the Masela Block.

    This is because until now, the revised Plan of Development / PoD for the IDD project has not yet been completed. So that if the change of PI owner is not completed immediately, the project cannot operate.

ENI

Regarding the opportunity for ENI to replace Chevron, Dwi explained that the Italian oil and gas company currently also holds shares in the IDD Project. Not only that, but ENI also manages two oil and gas projects which are located adjacent to the Chevron project. Even ENI already has production facilities because the project has been operating since 2017.

Chevron

"Apart from the agreement between the two parties, ENI has a good positioning to be able to develop the IDD project. ENI has facilities and can be integrated, and if possible, the investment can be reduced so that the economy is better, "he explained.

However, the government is not in a position to suggest who will replace Chevron in the IDD Project. The government will look at who will enter and consider the experiences of oil and gas companies wishing to enter the gas project in the Makassar Strait.

"So our consideration is for this project to start, be able to produce, and become the supporting capacity to achieve the target of 1 million barrels per day (bpd)," said Dwi.

On the other hand, he said the government supports the extension of the Production Sharing Contract / PSC block of oil and gas that is included in the IDD Project, namely the Meeting oil and gas block and the Ganal oil and gas block. 

    This is because the Rapak oil and gas block contract will expire in 2027 and the Ganal oil and gas block will be completed in 2028. Without the extension, he admits that oil and gas companies will find it difficult to develop the IDD project.

"Although later asking for approval from the government regarding the extension of the PSC. But the government will support the extension if the contractor is serious about carrying out the project, "he said.

In the IDD Project, Chevron is the operator and majority shareholder of 63%. Chevron is working on this deep-sea oil and gas project with other joint venture partners, namely Eni, Tip Top, PT Pertamina Hulu Energi (PHE), and partners in Muara Bakau.

Referring to SKK Migas data, until last June, the IDD Project was still in the process of evaluating the approval of the POD revision. In addition, this project is still in the process of evaluating the proposed extension of the Rapak and Ganal Block PSCs.

The IDD project combines two oil and gas fields, namely Gendalo Field, Ganal Block, and Gehem, Rapak Block. Still based on SKK Migas data, this project is targeted to reach a peak gas production of 844 million standard cubic feet per day / MMscfd and 27 thousand BPD of oil. The US $ 6.98 billion projects is planned to start operating in the fourth quarter of 2025.

Investor Daily, Page-10, Tuesday, August 11, 2020

Pertamina EP Receives Additional Production

PT Pertamina EP as a subsidiary of PT Pertamina (Persero) as well as a Cooperation Contract Contractor under the supervision of SKK Migas, has succeeded in obtaining additional oil and gas production. 

Pertamina EP Asset 2

    The production was obtained from two of its business units, namely in the work area of ​​Pertamina EP Asset 2 and Pertamina EP Asset 3. Through Pertamina EP Asset 2 Prabumulih Field in Sumatra has succeeded in drilling the LBK-INF-2 or LBK-15 well in the Lembak Structure, which is drilled on 24 June 2020 and conducted a Well Intervention on the PMB-33 well.

Pertamina EP Asset 3

The drilling of the LBK-15 well reached a depth at the end of 1630 mMD with a production test result of 1186 barrels of oil per day (BOPD, having successfully exceeded the target of 400% from the initial plan of 250 BOPD.

This well has been successfully produced in the Talang Akar Formation (TAF) -E layer, which is a virgin layer, in addition to exceeding the target production, it will also increase Asset 2 oil and gas reserves and open new opportunities for TAF layer development wells in the soft structure. 

    Astri Pujianto, General Manager of Asset 2, said that the success of the LBK-15 drilling was the result of good cooperation between functions implementing operational excellence.

"Thank God, even though the pandemic is not over yet, the spirit of transformation and cooperation among Asset 2 workers is maintained. By implementing operation excellence, drilling will be completed with zero fatality, ”said Astri.

In addition to the success of the LBK-15 drilling, the Well Intervention program applied to the PMB-33 well located in Sukaraja Village, Prambumulih City also succeeded in providing additional reserves of 314.79 BOPD from the initial target of 50 BOPD.

Meanwhile, Ndirga Andri Sisworo, Prabumulih Field Manager, explained that with the addition of the two wells, Prabumulih Field's current production is around 8,200 BOPD or 102% of the target. The success of drilling the LBK-15 well provided an additional 1186 bopd and the PMB-33 well intervention added 314.79 BOPD. Prabumulih Field's current production is in the range of 9514 BOPD.

Furthermore, in the work areas of Pertamina EP Asset 3 Jatibarang Field and Subang Field, West Java, they succeeded in trying to increase production through the Well Intervention program at ABG-02 and BBS-04 wells. Sumur ABG-02 which is the working area of ​​Pertamina EP Aset 3 Jatibarang Field in Jatimunggul Village, Trisi District, Indramayu Regency, provides an additional oil production of 346 BOPD.

In addition, Jatibarang Field also drilled CMT-20 wells in Muntur Village, Losarang District, Indramayu Regency in early 2020 which succeeded in achieving 582 BOPD production.

Hari Widodo, FM Jatibarang Field, said that at a time of high production declination, Jatibarang Field tried hard to maintain and increase production, one of which was through a Well Intervention and drilling program. This was evident from the Well intervention carried out in the ABG-02 well which succeeded in achieving the oil production of 346 BOPD.

"Meanwhile, for drilling in CMT-20, the production reached 582 BOPD for oil and 2 MMSCFD for gas. With the above successes, in the future we will conduct more massive well intervention and drilling, "he said.

Meanwhile, the Well intervention program carried out at BBS-04 well, which is the Pertamina EP Asset 3 Subang Field working area in Tegalsawah Village, Karawang Timur District, Karawang Regency, West Java, also succeeded in adding production of 700 BOPD and gas of 1 MMSCFD.

Investor Daily, Page-10, Tuesday, August 11, 2020

ENI has the potential to replace Chevron in working on the IDD project

 

The Ministry of Energy and Mineral Resources (ESDM) said Chevron Indonesia would withdraw from the Indonesia Deepwater Development (IDD) Project. The oil and gas company from the United States is offering management rights to ENI.

the Indonesia Deepwater Development (IDD) By Chevron

The Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Ego Syahrial, said that Chevron is interested in working on the IDD project because it is still managing the Rokan Block. Once the management rights were transferred after the production sharing contract / PSC for the Rokan Block ended, Chevron also intended to withdraw from the IDD project.

"Chevron is an IDD package with Rokan. If Chevron leaves the Rokan block, that means Chevron is also out of the IDD project, ”he said.

Chevron is currently still looking for a replacement who will work on the IDD project. One of the candidates being offered by Chevron is an Italian oil and gas company, ENI.

"Now offered by ENI, I think so. The point is they are offering themselves to each other, which I know Chevron is offering. We'll just wait, "explained Ego.

Regarding Eni, the oil and gas company recently signed a contract with the government for the West Ganal Block. This block was previously part of the Makassar Strait Block, which contains the West Seno Field which has been developed by Chevron. Eni also manages the Muara Bakau and East Sepinggan Blocks which are located near the IDD Project.

the Muara Bakau and East Sepinggan Blocks

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said that his party is still waiting for a report from Chevron regarding the follow-up of the IDD Project. His party has even been chasing the oil and gas company from the United States to immediately make a decision whether to continue this project or not.

Dwi Soetjipto

"The letter from SKK Migas has not been replied to. We are still discussing it. We'll just wait, "he said.

In the IDD Project, Chevron is the operator and majority shareholder of 63%. Chevron is working on this deep-sea oil and gas project with other joint venture partners, namely Eni, Tip Top, PT Pertamina Hulu Energi (PHE), and partners in Muara Bakau. 

SKK MIGAS

      Referring to SKK Migas data, until last June, the IDD Project was still in the process of evaluating the approval of the plan of development / POD revision. In addition, this project is still in the process of evaluating the proposed extension of the Rapak and Ganal Block PSCs.

The IDD project combines two oil and gas fields, namely Gendalo Field, Ganal Block, and Gehem, Rapak Block. Still based on SKK Migas data, this project is targeted to reach a peak gas production of 844 million cubic feet per day (million standard cubic feet per day / MMscfd) and 27 thousand barrels of oil per day (bpd).

     The US $ 6.98 billion projects are planned to start operating in the fourth quarter of 2025. If Chevron releases the IDD project, there will be no more oil and gas projects in Indonesia that the oil and gas company will undertake. 

        The reason is, the management of the Rokan Block has been decided to be transferred to PT Pertamina (Persero) starting in 2021. However, Ego said, this does not mean Chevron will leave Indonesia.

"We don't know, later in the middle, there could be a project," he said.

PT Chevron Pacific Indonesia (CPI)

PT Chevron Pacific Indonesia (CPI) Corporate Communication Manager Sonitha Poernomo said, although the Kutei Basin is an attractive hydrocarbon area, the IDD Project cannot compete for capital in Chevron's global portfolio.

Sonitha Poernomo

Chevron Rapak Ltd (CRL) opened a data room to facilitate discussions on identifying potential partners for the project earlier this year. According to company policy, it was unable to provide detailed information on commercial negotiations. However, his party will continue to work with SKK Migas and potential partners to help realize the potential development of the IDD Project.

"We believe this project will have value for other operators and the Kutei Basin can continue to be developed safely," said Sonitha Poernomo.

 Investor Daily, Page-10, Friday, August 7, 2020

Uncertainty of Sakakemang Gas Price

Repsol's continued development of the Sakakemang Block is constrained by the gas price which has not been agreed upon. The government and the oil and gas company from Spain still have not agreed on the price that Repsol from Iapangan will sell, which has gas reserves of up to 1 trillion cubic feet or trillion cubic feet (TCF).

Repsol

Deputy for Finance and Monetization of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Arief Setiawan Handoko, admitted that currently discussing gas prices from the Sakakemang Block is somewhat difficult. To date, Repsol has set gas prices above the US $ 7 per MMBtu. The price is claimed to be in accordance with the economics of the project.

the Sakakemang Block Sumatera Selatan

"Currently there are still difficult discussions about the sustainability of Repsol. Currently, we from the Commercial Division are involved in determining whether to continue or not because the economic price of Repsol is different from the price we are trying to sell in Indonesia, "said Arief.

He continued, referring to the latest regulation regarding gas prices, namely Presidential Regulation Number 40 of 2016 concerning Natural Gas Pricing for the industrial sector at a maximum of US $ 6 per MMBtu. With this regulation, SKK Migas also cannot simply emphasize the investment rate return (IRR) of Cooperation Contract Contractors (KKKS). The reason is, this will have an impact on state revenues from oil and gas.

SKK Migas.

"So we have to balance the economy and state revenues not to change," said Arief.

Blogger Agus Purnomo in SKK Migas

Sakakemang Block is one of the largest oil and gas discoveries in the world during the 2018-2019 period. With proven natural gas reserves of up to 2 trillion cubic feet, this Repsol finding is the largest in Indonesia for the last 18 years.

Dwi Soetjipto

Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto said, in the initial certification, the amount of reserves included was only 1 TCF of the potential proven reserves of around 2 TCF.

Repsol also has the opportunity to submit a plan of development (PoD) this year with the hope of carrying out the production of the Sakakemang Block in 2021. Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Ego Syahrial said there are still many fields that have not yet entered the POD stage. Therefore, continuous activities are needed in order to accelerate the development of the oil and gas field.

Kontan, Page-12, Friday, August 7, 2020

Chevron sells IDD blocks

 

PT Chevron Pacific Indonesia's plan to exit the second phase of the development of the second phase of the Indonesia Deepwater Development (| DD) Block is very serious. Chevron has even offered the deep-sea gas block to its partner, Eni, an Italian oil and gas company.

the Indonesia Deepwater Development (| DD) Block

Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources Ego Syahrial confirmed the news that Chevron was offering to develop the block to Eni.

"Chevron has already proclaimed it, now it is being offered to Eni, we'll just wait. Chevron is the one making the bid to Eni," he explained.

However, Ego was reluctant to reveal what the block release scheme would be like and the bid value. Currently, in the Deep Sea project, Chevron acts as the operator and the majority shareholder, which is 63%.

Chevron is working on this oil and gas project in Iaut with other partners, namely Eni, Tip Top, PT Pertamina Hulu Energi, and partners in Muara Bakau. IDD is a deep-sea gas project carried out by Chevron Indonesia Company (Cico) in the Kutai Basin, East Kalimantan through four production sharing contracts, namely PSC Ganal, Rapak, Makassar Strait and Muara Bakau.

The second phase development in the IDD Block includes the development of the Gendalo field and the Gehem field. There are plans to develop two separate hubs where Gendalo and Gehem will have a Floating Production Unit (FPU) for each field (see table). 

    Ego assessed that Chevron's plan to leave the IDD Block was inseparable from Chevron's not being extended to other oil and gas blocks in Indonesia, namely the Rokan Block. Later, in the year 2021. PT Pertamina (Persero) will continue the block located in Riau. "so one package," he said.

Dwi Soetjipto

Meanwhile, Dwi Soetjipto, Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), said that his party had asked Chevron's assurance for the continued management of the IDD Block. However, until now the letter sent by SKK Migas to Chevron has not been immediately responded to.

"Not yet replied, we are still discussing it," he said.

SKK Migas needs to be certain about the current condition of the IDD Block. This is because there are already oil and gas companies that are interested in continuing the project. Chevron also has not yet sent the IDD Block management work plan or plan of development (PoD), which has been requested since January 2020. 

Sonitha Poernomo

    Manager of Corporate Communications of PT Chevron Pacific Indonesia, Sonitha Poernomo said that his party had opened a data room to facilitate discussions on identifying potential partners for IDD Block earlier this year.

"At this time, there is no final decision regarding the discussion," She said.

Regarding the plan to leave the IDD Phase 2 project, Sonitha explained that his party could not compete for capital in the global Chevron Group portfolio. Therefore, he believes this project will have value for other operators.

"We will continue to work closely with SKK Migas and potential partners to help realize the potential of this project. However, according to policy, we cannot provide detailed information about commercial negotiations, "She said.

Kontan, Page-12, Friday, August 7, 2020

32 Companies Interested in Shell Shares in Masela Block

The Ministry of Energy and Mineral Resources (ESDM) stated that there are 32 oil and gas companies that have been allowed to open data (open data) of the Masela Block. The data will be opened after Shell has released its participating interest (PI) in the Masela Block.

Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Ego Syahrial, confirmed that Shell would indeed release PI ownership in the Abadi LNG Project, the Masela Block. The opening of data for oil and gas companies interested in taking Shell's PI has also been approved.

the Masela Block

"There are 32 oil and gas company candidates who are in the process of opening this data. The government is certainly looking for the best competence, "he said.

According to him, 32 oil and gas companies that are currently disclosing this data are large oil and gas companies. Not only that, but foreign companies interested in taking Shell shares have also been given permission to view the data.

"That means if there are companies from within the country, maybe just a few companies. Who is the biggest company in the country, most importantly Pertamina, Medco, ”said Ego.

Despite the change in shareholders in the Masela Block, Ego emphasized that the Abadi LNG Project must continue.

"Of course, the government's goal is how the Eternal LNG Project will continue and in 2027 the gas can [operate]. That's all, "said Ego.

Dwi Soetjipto

Previously, the Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto revealed that the process of transferring ownership of PI is likely to be completed next year if Shell has obtained a potential buyer.

"I think it will last up to 1-1.5 years. If the divestment will continue, no later than 2021 it must be completed, ”he said.

The Abadi project is targeted to start operating in the second quarter of 2027. The US $ 19.8 billion projects undertaken by Inpex Masela Ltd is projected to produce 150 mmscfd of piped gas and 9.5 million tons of LNG per year.

Currently, Shell holds 35% PI in the Masela Block, while the rest is owned by Inpex. Based on data from SKK Migas, until last March, the work on the Abadi Project's environmental impact analysis (Amdal) approval was still 43.41% of the target of 47.27%.

In addition, the auction process for front end engineering design / FEED onshore liquefied natural gas / LNG refinery facilities, production and floating production facilities, storage and offloading / FPSO, gas pipelines, as well as subsea umbilical, riser, and flowline (SURF) facilities are still taking place.

Oil and Gas Investment

Meanwhile, the Ministry of Energy and Mineral Resources noted the realization of national oil and gas investment in the first half of 2020 amounting to the US $ 5.6 billion or only 38.6% of the target of US $ 14.5 billion. However, with the starting to increase in oil prices, oil and gas investment in the future will improve. 

    Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Ego Syahrial, said that his party continues to strive for optimal oil and gas investment climate.

However, the Covid-19 pandemic, which depressed global crude oil prices, he admitted had an impact on national oil and gas investment. This is because the drop in oil prices was followed by cuts in investment budgets by major world oil and gas companies.

"We had targeted oil and gas investment at the US $ 14.5 billion, but the realization still reached the US $ 5.6 billion. So it is still far away, still a third, "he said.

Of the US $ 5.6 billion investment, the US $ 4.85 billion came from the upstream oil and gas sector and the US $ 712.26 million from the downstream oil and gas sector. When compared with the Performance Report (Lakin) of the Directorate General (Ditjen) of Oil and Gas 2019, the realization of downstream oil and gas investment in the first semester of 2020 is quite good.

This is because, in the one year period in 2019, the realization of downstream oil and gas investment was the only US $ 1.06 billion. In detail, the realization of downstream oil and gas investment until last June, namely investment in processing infrastructure of the US $ 299.17 million, transportation of US $ 346.44 million, storage of US $ 21.67 million, and trade of US $ 44.98 million.

ESDM Ministry's Oil and Gas Program Development Director Soerjaningsih revealed that the downstream oil and gas project investment includes a refinery project undertaken by PT Pertamina (Persero).

"The downstream investment comes from the Balikpapan and Tuban refinery projects, as well as the BBM (fuel oil) and BBG (gas fuel) transportation projects," he said.

For the performance of the upstream oil and gas sector, Ego said that the realization of oil lifting as of last June had approached the change target of 705 thousand barrels per day (BPD). Even if compared to the initial target of 755 thousand bpd it is indeed very far away.

“Like it or not, the upstream oil and gas performance is affected by low investment. This is the impact of all major oil and gas companies in the world to cut investment, "he said.

Oil and Gas Block Auction

To increase oil and gas investment in the future, Ego added that the government will auction off 10 conventional oil and gas blocks this year. Along with the preparation for the oil and gas block auction, his party has communicated with potential investors regarding the schedule for opening this oil and gas block auction. Several investors asked for the auction to be postponed for the rest of the year in the hope that oil prices would improve.

"The announcement option in the near future will be decided whether it is the end of the third quarter or the beginning of the fourth quarter of this year," he said.

The oil and gas block auction is also planned not to be held simultaneously. Ego explained that currently the final evaluation of the 10 oil and gas block candidates is being carried out. This evaluation is more attractive terms and conditions and the implementation of production sharing contract / PSC gross split or cost recovery.

"We evaluate it for maximum results by considering input from stakeholders which we do pro-actively," he said.

Based on ESDM Ministry data, the total potential oil resources of the 10 oil and gas blocks are 3.44 billion barrels and 5 trillion cubic feet of gas. The five oil and gas blocks that are regularly auctioned are Merangin III Block in South Sumatra & Jambi (Onshore), Sekayu in South Sumatra (Onshore), North Kangean in East Java (Offshore), Cendrawasih VII in Papua (Offshore), and Mamberamo in Papua ( Onshore and Offshore).

Meanwhile, the five oil and gas blocks being auctioned with a direct bid mechanism are the West Palmerah Block in South Sumatra and Jambi (Onshore), Rangkas in West Java and Banten (Onshore), Liman in East Java (Onshore), Bose in East Nusa Tenggara (Onshore and Offshore). ), as well as Maratua II in Kaltara (Onshore and Offshore).

Investor Daily, Page-12, Thursday, August 6, 2020

PHE Jambi Merang Complete 2D Survey Without Accident

PT Pertamina Hulu Energi (PHE) Jambi Merang, a subsidiary of PHE, made a new history by completing the implementation of a two-dimensional (2D) Seismic Survey of a Firm Work Commitment (FWP) for the 31,140 km Jambi Merang Working Area on Monday (3 August) at 15.45 WIB. The success of completing this seismic exceeded the target of 30,000 km or 103.8% with no work accidents or zero incidents.

"Thank God, we are grateful PHE Jambi Merang was able to complete the 2D survey in less than a year during the Covid-19 pandemic," said Pertamina Hulu Energi Exploration Director Medy Kurniawan.

PT Elnusa Tbk (ELSA) Ship

A 2D seismic survey of the Jambi Merang KKP is the first implementation in an open area that began on November 20, 2019. It is hoped that Pertamina can continue to support the increase in national oil and gas production and reserves, especially to get a giant discovery.

According to Medy, the 2D PHE Jambi Merang survey was not only carried out in the Jambi Merang block area. Because it is open, the survey was also conducted outside the Jambi Merang area. 

    In this activity PHE Jambi Merang appointed PT Elnusa Tbk (ELSA), an affiliated company of PT Pertamina (Persero), to conduct a 2D survey starting from western waters to eastern Indonesia.

This 2D offshore seismic survey is the largest exploration activity over the past decade because it passes through Bangka waters to Seram Island in Maluku. In addition, this 2D seismic uses 2D seismic marine broadband technology and is carried out by a single operator, Elnusa's Elsa Regent Ship.

Elnusa's Elsa Regent Ship

Apart from the offshore 2D Seismic survey, a 3D seismic survey was also carried out in the Jambi Merang working area covering an area of ​​237 km2 covering two provinces, namely South Sumatra and Jambi, as well as three districts namely Musi Banyuasin, Banyuasin, and Muaro Jambi.

For information, this 2D seismic survey is part of the Jambi Merang Firm Work Commitment (FWP) until 2024 with an investment value of US $ 239.3 million. Specifically for exploration activities, in the Firm Work Commitment (FWP) US $ 196.5 million has been allocated to increase the discovery of reserves so that other exploration activities will be carried out in the future. 

    Medy said PHE will process and evaluate the 2D survey results. It is hoped that the results of the evaluation can be completed in December 2020.

"We are grateful to the government for giving the confidence to carry out the mandate of this work. Even though it was full of challenges, finally the 2D survey work was completed even earlier than the target. This is of course due to the support of all parties, the Ministry of Energy and Mineral Resources, SKK Migas, and other stakeholders, "he said.

Investor Daily, Page-12, Thursday, August 6, 2020