Additional Key Incentives to Reach the Target of 1 Million BPD

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated that the success of achieving the target of 1 million barrels per day (BPD) in 2030 depends on additional incentives from the government. 

Blogger Agus Purnomo in SKK Migas

    Without additional incentives, oil production will only be around 500 thousand BPD in 2030.

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said, referring to Wood Mackenzie, Indonesia's oil and gas prospectivity rating is still very good, although a bit low. However, based on IHS Markit's research, the country's risk rating and the national fiscal system are considered to continue to decline from year to year. With the potential for oil and gas, this fiscal improvement is the key for Indonesia to work on its oil and gas prospects. Moreover, oil production has continued to decline over the last 20 years.

"So far, it is known that we have 128 basins and only 20 basins are producing. "This should be our concern whether we will just accept the decline," he said in a meeting with Commission VII on the energy sector of the House of Representatives.

    He explained, according to the projections prepared by his party, oil production could be increased to 1 million BPD in 2030 if there were flexible and competitive incentives provided. On the other hand, without incentives, the projection results show that national oil production will only reach the range of 500 thousand BPD in 2030. The same thing he said applies to gas production, although the conditions are better. Without incentives, national gas production is relatively stable in the range of 6 billion standard cubic feet per day / BSCFD until 2030. However, if you want this gas production to increase, incentives are still needed.

"Providing flexible, competitive, and case-by-case incentives does not eliminate the obligation to seek massive potential, implement aggressive and efficient work programs, and run other enablers such as completing permits, land, and others," Dwi said.

    He added that the government is committed to improving the national oil and gas investment climate, including the provision of incentives for oil and gas companies. In fact, the meeting related to this matter was directly chaired by the Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif.

"There are currently intense discussions led by the Minister of Energy and Mineral Resources about this incentive and how to make Indonesia's upstream oil and gas investment increase or have a strong appeal higher than other countries, "he said.

    So far, several improvements have been made to encourage oil and gas exploration. In detail, the availability of subsurface data, data openness, promotion of potential areas through roadshow investors and virtual data rooms which are still in preparation, as well as exploration funding from a firm work commitment (COW) of US $ 1.7 billion and the transfer of the remaining KKP for open area exploration.

    Meanwhile, to maintain the economy of the oil and gas project, Dwi revealed, there are several incentives that have been implemented. First, the elimination of Liquefied natural gas / LNG State Revenue Tax according to Government Regulation number 48 of 2020. Furthermore, the elimination of the cost of utilizing state property in accordance with the Minister of Finance Regulation number 140 of 2020.

"Then fiscal flexibility through investment incentives such as full price DMO, accelerated depreciation and split changes, so far have been given to the Mahakam Block, South Natuna Sea B, and Sanga-Sanga," he explained.

    Meanwhile, the incentives that are still under discussion are postponement or reduction of indirect taxes of up to 100%, elimination of costs for utilization of the Badak LNG Plant, tax holidays for income tax (PPh), assume and discharge, and tax allowances, as well as support for upstream oil and gas supporting industries.

Strong Planning

    Member of Commission VII in the energy sector of the Indonesian House of Representatives, Maman Abdurrahman, stated that Commission VII fully supports SKK Migas, which has set a production target of 1 million BPD in 2030. However, his party reminded SKK Migas to seriously work on this target. Moreover, in the last four years, the national oil production has not increased.

"Our national oil production greatly affects our macro assumptions. I am only one, I see a downward trend in production, that the planning team must really pay attention to. We don't want to be just lip service. So, the planning team must be strengthened, "he said.

    According to the Deputy Chairperson of Commission VII in the energy sector of the Indonesian House of Representatives Ramson Siagian, in the last three years, the realization of national oil production has always missed planned by SKK Migas. In view of this, he assesses that the target of 1 million BPD seems unrealistic. For that, planning at SKK Migas must be strengthened.

"This is like wishful thinking, unrealistic. I see a reliable Enhanced Oil Recovery, not new exploration, ”said Ramson.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Tutuka Ariadji, previously said that a production target of 1 million BPD of oil and 12 BSCFD of gas is needed to ensure energy supply in the future. This target setting refers to national energy needs. Although at the same time the government is also encouraging the development of the electric vehicle ecosystem, this does not mean that the two targets are in conflict. Moreover, the transition to electric vehicles cannot occur significantly in a short period of time.

"Currently, our oil needs are around 1.6 million BPD, production 700 thousand BPD. We even produce up to 1 million BPD, still not a lot. Even electric cars cannot suddenly develop a large amount, "he said.

Investor Daily, Page-10, Monday, Feb 8, 2021

SKK Migas Records EOR Commitment of US $ 446 Million

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted a commitment to implementing Enhanced Oil Recovery (EOR) activities of up to the US $ 446 million. 

Blogger Agus Purnomo in SKK Migas

    EOR activities, especially in the Rokan Block, will support the achievement of the oil production target of 1 million barrels per day (BPD) by 2030.

    EOR is an advanced oil recovery method by adding energy in the form of special material or fluid that is not contained in an oil reservoir. Generally, EOR is applied to fields that have long been produced (mature fields) with the aim of extracting remaining oil that cannot be produced by primary and secondary recovery methods (water flooding).

    Some of the most widely known EOR techniques today are injection steam flooding, chemical flooding, and gas flooding. 

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said the EOR activities to be carried out were water injection and chemical injection. To date, his party has recorded 23 EOR projects using polymers or surfactants which will operate until 2030.

"The firm work commitment (KKP) for EOR to date totals the US $ 466 million," he said.

    Of the 23 EOR projects, his party will focus on its implementation in the Rokan Block. 

the Rokan Block Chevron

    In blocks whose management will shift to Pertamina in August 2021, his party will re-evaluate the existing plan of development / POD and steam injection projects such as in North Duri Development (NDD) 14, Duri Ring, and others. In addition, his party will encourage the completion of Chemical EOR Phase-1 at Minas Field in early 2022.

"The Minas field is the main support for the EOR strategy with an additional production of around 52 thousand BPD in 2030," said Dwi.

    Regarding the progress of EOR implementation, 23 fields are still in the study stage. Meanwhile, one field is currently working on field trials and one field is being discussed on POD. Of the 23 EOR projects, most of them were Pertamina Group projects.

    In details, PT Pertamina Hulu Rokan (PHR) will carry out 7 EOR projects, PT Pertamina EP 2 projects, PT Pertamina Ogan Komering 2 projects, PT Pertamina Hulu Energi Noth West Java (ONWJ) 2 projects, PT Pertamina Hulu Offshore South East Sumatra (OSES) 2 projects , PT Pertamina Hulu Energi Siak 1 project, PT Pertamina Hulu Mahakam 1 project, and PT Pertamina Hulu Energi Tuban 1 project. In addition, BOB Bumi Siak Pusako will work on 1 EOR project, PT Energi Mega Persada (EMP) 1 project, Medco EP Indonesia 1 project, and 1 Petrogas project.

    Referring to SKK Migas data, the schedule for implementing one field (full field) for these EOR projects is Minas and Batang in 2024, Bekasap and E-main in 2025, Zulu in 2026, Tanjung, Rama, and Handil in 2027, Pedada, Sukowati, Gemah, Melibur, and Walio in 2028, Duri Ring, Bekasap, Kulin, Balam South, Bangko, and Kaji Harapan in 2029, as well as Air Serdang, Guruh, Krisna, and Mudi in 2030.

    Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Tutuka Ariadji, said that the application of EOR technology is not easy. In order for this EOR project to run smoothly in the long term, a strong research and development institution is needed to support it.

"Backing up research and development is absolute. If there are strong research and development, we can monitor oil and gas production. The oil and gas industry needs technology and competent people. There is no compromise on that, "he said.

    Meanwhile, Ronald Gunawan, Director of the Indonesia Petroleum Association (IPA), said that EOR activities are difficult to carry out under current conditions. This is because, with the current oil price conditions, the project is not economical when referring to the current fiscal scheme in Indonesia. If it is economical, oil and gas companies will certainly do it and boost oil production as much as possible.

Investor Daily, Page-9, Saturday, Feb 6, 2021

Mudi-26 Field Increases PHE TEJ Production in Tuban

    Pertamina Hulu Energi Tuban East Java (PHE TEJ), continues to carry out its commitment to maintaining the country's energy security. One of them is the successful implementation of the Mudi-26 Well Drilling. 

Pertamina Hulu Energi Tuban East Java (PHE TEJ)

    The Mudi-26 Well Drilling was able to record production test results of 531 Barrel Oil Per Day (BOPD) This figure exceeds the initial target of 200 BOPD, thus increasing the production increase from the Mudi field in Tuban Block.

"The success of drilling the Mudi-26 well is one of the fulfillment of a definite commitment, the Mudi-26 infill well was drilled with a depth of 3,005 meters. This drilling takes 73 days of drilling and 12 days of completion, "said the acting General Manager of TEJ's PHE Riko Meidiya Putra.

    Riko explained that the Mudi-26 well was successfully produced in the Tuban Carbonate Formation layer. Apart from exceeding the production target, this well will also increase the oil and gas reserves of the Tuban Block in East Java and open up new opportunities for wells in the Mudi field.

"We express our deepest gratitude to all parties who have supported the success of drilling the Mudi-26 well. I hope that in the future PHE TEJ production will continue to increase so that it can participate in supporting the target of achieving national energy production," said Riko.

PetroChina

    Riko conveyed that the success of drilling the Mudi-26 well proves PHE Tuban East Java officers' ability to increase Mudi field production after the transition from the previous operator, namely, Joint Operating Body Pertamina PetroChina East Java (JOB-PPEJ). Additional production from Mudi-26 well is 531 BOPD brings the total production of PHE Tuban East Java oil to 1731 BOPD.

"This success is due to solid teamwork and prayers and support from all internal and external parties. Meanwhile, the Field Manager of PHE TEJ Taryono said that the Mudi-26 well drilling was successfully carried out by applying superior HSSE with zero LTI, zero TRIR, and no environmental issue results.

"PHE TEJ is a subsidiary of PT Pertamina Hulu Energi (PHE) which is engaged in the upstream oil and gas business in the Tuban Work Area (WA). PHE TEJ is officially 100 percent managed by PHE using a production sharing contract or gross split covering 4 Field Areas, namely Mudi, Lengowangi, South Bungoh, and Bogomiring Field Areas, "he said.

Harian Bangsa, Page-9, Friday, Feb 5, 2021

Pertamina Hulu Mahakam-Apexindo Signed US $ 68 Million Contract

 

PT Pertamina Hulu Mahakam (PHM) as the operator in the Mahakam Working Area (WA), with the support of SKK Migas and PT Pertamina Hulu Indonesia (PHI), announced the award of the Drilling Submersible Swamp Barge Services (Swamp Rig) contract to PT Apexindo Pratama Duta, Tbk, valued at the US $ 68 million.

Chalid Said Salim

    The signing of the swamp rig procurement contract was carried out online in Jakarta, on Thursday (4/2) by the Managing Director of PHI as the Proxy of the Managing Director of PHM Chalid Said Salim and the President Director of PT Apexindo Pratama Duta Tbk Zainal Abidinsyah Siregar. Also watching SKK Migas' Head of Goods and Services Procurement Management Division Erwin Suryadi, PHM General Manager Agus Amperianto, along with PHI and PHM management ranks.

Agus Amperianto

PHM General Manager, Agus Amperianto explained, Rig Yani will be brought to Mahakam Working Area to replace Rig Raisis in the second quarter of 2021 and support drilling operations in the Tambora, Tunu, and Handil fields. Agus hopes that Apexindo will take an active role in proposing efficiency programs.

"The development of various innovations for the optimization of operations will greatly support the Locomotive-8 program, for the continued production and development of the Mahakam Working Area," he said.

the Mahakam Work Area 

Through the Locomotive-8 program (Low Operation Cost of Mahakam to Achieve Effectiveness and Efficiencies - 8), PHM launched an integrated effort to optimize costs in all operating activities based on innovation and synergy, the goal is to maintain economics and sustainability in the Mahakam Working Area fields. who is already in the natural decline phase?

In his speech, Chalid Said Salim said that the signing of this contract is a form of Pertamina's commitment to maintaining production levels in the Mahakam Working Area.

"This signing is a manifestation of Pertamina's efforts to maintain national energy security, considering that this contract is an important part of oil and gas production activities at Mahakam Work Area," he said.

The contract value reaches US $ 68 million, has a duration of 1.5 years (with an option to extend 1 + 1 year), and has a commitment to the Domestic Content Level (TKDN) of 60.01%. 

    

Blogger Agus Purnomo in SKK Migas

    Head of the SKK Migas Goods and Services Procurement Management Division, Erwin Suryadi, said that SKK Migas welcomed the signing of this rig procurement contract.

"The signing of this contract shows PHM's determination to continue to maintain production levels in the Mahakam Working Area, this effort is also part of the efforts of SKK Migas and Cooperation Contract Contractors (KKKS) to achieve the production target of 1 million barrels of oil per day (BOPD) and gas. billion standard cubic feet per day (BSCFD) by 2030, "he said.

"To keep 2021 production from decreasing, SKK Migas and KKKS will increase the number of development well drilling activities by 616 wells, or an increase.

144 percent compared to 2020's realization of 252 wells. Mahakam Working Area is one of the backbones of the national upstream oil and gas production in 2021 and towards the 2030 target, "said Erwin.

"SKK Migas encourages that in implementing this contract PHM uses domestic labor and raw materials so that local content can exceed the target set.

It is hoped that this contract will have multiple effects on service providers and national workers, including the empowerment and fostering of local SMEs around the area of ​​operation, "said Erwin.

As is known, to restrain the rate of decline in production in the Mahakam Working Area, which is already in a natural decline phase, throughout 2021 PHM will drill 73 development wells and 2 exploration wells and work on 4,150 wells intervention/service jobs. 

    PHM targets production in 2021, as follows: gas 485 mmscfd (wellhead) and liquid (oil and condensate) 22 KBOD. In 2020 PHM produces gas as much as 605.76 mmscfd (wellhead) or 3% higher than the 2020 WP&B target, which is 590.35 mmscfd, and liquid as much as 29.51 KBOD or 4% higher than the WP&B 2020 target of 28.43 KBPD

Investor Daily, Page-10, Friday, Feb 5, 2021

Government Prepares 50 Oil and Gas Blocks for Auction

To increase national oil production, the government has prepared 50 oil and gas blocks to be auctioned in the period 2021-2024. This is because the national demand for crude oil will increase to 1.49 million barrels per day (BPD) in 2030.

Secretary-General of the National Energy Council (DEN) Djoko Siswanto said that an auction of oil and gas blocks is necessary to increase national oil production. This is because once all fuel oil (BBM) refinery projects are completed, the refinery's raw material requirement for crude oil will increase to 1.4 million BPD.

"So to increase oil production, the government will auction off new working areas in 2021 to 2024," he said.

In 2021, there will be 10 oil and gas blocks which are a diversion from the planned auction in 2020, and 10 oil and gas blocks resulting from a joint study that was completed last year as well. Furthermore, 10 oil and gas blocks each will be offered in 2022-2024.

"In 2024, there are also 10 working areas that can be auctioned off to increase oil production as raw material for refineries," he said.

Referring to DEN's Grand National Energy Strategy (GSEN), a total of 50 oil and gas blocks are prepared for auction. In 2021, the oil and gas blocks prepared are the West Palmerah, Rangkas, Liman, Bose, Maratua II, Merangin III, Sekayu, North Kangean, Mamberamo, and Cendrawasih VIII blocks.

In addition, there are also blocks from the joint study, namely the Arakundo Block, Offshore Northwest Aceh, Offshore Southwest Aceh, South CPP, Bertak Pijar Puyuh, Sumbagsel, Serunai, Deep Water Bali, Bali Strait, and Karaeng. In 2022, the blocks to be prepared are the Barakuda Block, Peri Mahakam, North Ketapang, East Gebang, Ranau, East Muriah, Buton, Off Pulau Moa Selatan, Ogar, and West Papua III.

Next, the blocks that will be auctioned off in 2023 are the South Barito, North West Ganal, Budong-Budong, Malunda, East Bula, Semai IV, Kei, Papeda, Warim, and Asmar blocks. The last 10 blocks planned to be offered in 2024 are East Gebang, Baronang, Sokang, Kuningan, South Matindok, Enrekang, Bukat, Bulungan, Bone, and East Sokang.

However, for 2021, the Ministry of Energy and Mineral Resources (ESDM) has only confirmed the auction of 10 oil and gas blocks, which is a diversion from the planned auction in 2020.

ESDM Ministry's Upstream Oil and Gas Business Development Director Mustafid Gunawan said five oil and gas blocks would be offered through regular auctions, namely Merangi III, Sekayu, North Kangean, Cendrawasih Offshore, and Mamberamo Blocks. Furthermore, five other blocks were auctioned through direct bidding, namely West Palmerah, Liman, Rangkas, Bose, and Maratua II.

"This work area is expected to be offered in the first quarter to the first semester of 2021. This offer is the first implementation of the contract scheme flexibility Permen, "he said.

With the flexibility of the contract scheme, he hopes that the auction will remain in demand even though the Covid-19 pandemic is still ongoing.

Still Import

Djoko explained that the government has targeted oil production to be increased to 1 million BPD in 2030 after the refinery needs raw materials. This is because, without any effort, crude oil imports will be huge in the future. In fact, with a target of 1 as well as BPD alone, crude oil imports still have to be done.

"If the oil production target of 1 million BPD is successful, we still need to import 324 thousand BPD later in 2026-2027, the peak of operational refineries, both existing and built refineries," explained Djoko.

Based on GSEN DEN data, domestic crude oil demand will increase from 909 thousand BPD in 2020 to 993 thousand in 2025, and reach 1.49 million BPD in 2030. While domestic oil production is projected to increase from a range of 742 thousand in 2020 to 2025 to 1 million BPD in 2030. However, oil imports of 338 thousand BPD are estimated to be needed in 2030 and 441 thousand BPD in 2040.

In fact, the increase in domestic oil production has already taken into account additional projects from enhanced oil recovery / EOR and exploration. Oil production from EOR activities are targeted at 18 thousand BPD in 2025, up to 106 thousand BPD in 2030, and reaching 261 thousand BPD in 2040. 

    Meanwhile, additional production from exploration is 109 thousand BPD in 2030 and 220 thousand BPD in 2040. Additional production is also derived from the acquisition of 122 thousand BPD in 2025, 150 thousand in 2030, and 170 thousand in 2040.

Investor Daily, Page-10, Tuesday, Jan 26, 2021

Pertamina Hulu Energi Completes KLD Project

 

PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ), a subsidiary of PT Pertamina Hulu Energi (PHE), has completed the KLD Project in the ONWJ Block. This project provides an additional gas supply of 16 million standard cubic feet per day / MMscfd. 

    PHE Development and Production Director Taufik Aditiyawarman said the KLD project was successfully completed three months earlier than the set schedule and without any accidents (zero-incident). This is due to hard work and coordination with various parties, including the project contractor, PT Meindo Elang Indah.

"Gas production from the KLD Field will be used entirely for domestic interests so that it will drive the industrial economy around our working area," he said.

He explained, the KLD Field off the north coast of West Java began construction in April 2019. The KLD project has gone through several stages, including fabrication in the Handil Field, load out and sail away in mid-July 2020, off-monitoring installation, drilling activities, hook up, commissioning, and start-up. According to Taufik, the KLD Field has started distributing gas since December 2020. In early January, PHE ONWJ has completed a performance test period according to production operation parameters.

"From the KLD Field, it is targeted that gas production is 16 MMscfd in the peak production period," said Taufik.

Blogger Agus Purnomo in SKK Migas

Meanwhile, Julius Wiratno, Deputy for Operations of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), appreciated PHE ONWJ for successfully completing the Project in the midst of difficult conditions. The reason is, last year was a very challenging year where world oil prices were relatively low and the Covid-19 pandemic had an impact on the dynamics of the upstream oil and gas industry and its supporting sectors.

His party will continue to strive to increase supervision and control of field development projects, as well as coordinate with oil and gas companies and other stakeholders to minimize the impact of the pandemic. The success in the KLD Project is expected to be able to encourage PHE to carry out various upstream activities so that it can have an impact on national oil and gas production, including having a chain effect on the economy and employment.

"And in the long term it will support efforts to achieve oil production of 1 million barrels per day and gas of 12 BSCFD (billion standard cubic feet per day) in 2030 to realize national energy security," said Julius.

Referring to SKK Migas data, the KLD Project is included in 12 projects that are planned to start operating this year. The entire project will provide additional oil production of 28,508 bpd and gas of 484.2 MMscfd. The 12 projects are expected to support the achievement of this year's oil production target of 705 thousand BPD and gas 5,638 MMscfd.

Investor Daily, Page-10, Monday, Jan 25, 2021

Government Assesses Continuation of Bontang Refinery Project

 

The Ministry of Energy and Mineral Resources (ESDM) said the project to build a new fuel oil (BBM) refinery in Bontang, East Kalimantan was being reviewed again. In fact, this refinery project is still listed in the list of National Strategic Projects in accordance with Presidential Regulation Number 109 of 2020.

Since PT Pertamina ended its contract with a partner in 2019, the Bontang Refinery is still being studied, "the Director of Development of the Oil and Gas Program as well as the Acting Director of Downstream Oil and Gas Business Development at the Ministry of Energy and Mineral Resources Soerjaningsih.

The contract in question is the frame work agreement / FWA agreement between Pertamina and its partner Overseas Oil and Gas LLC (OOG), an oil and gas company from Oman. Pertamina stated that it had not continued the agreement that became the basis for forming the joint venture company for the Bontang Refinery Project since February 2020.

 the Bontang Refinery Project

Soerjaningsih said that the continuation of the Bontang Refinery Project was also hampered by land problems. Originally the refinery would be built on government-owned land in Bontang.

"There is a problem that the location in Bontang which is owned by the government is insufficient and this is still a special study related to capital expenditure," he explained.

Nicke Widyawati

Pertamina has stated that it has not continued with the Bontang Refinery Project since the middle of last year. At that time, Pertamina's President Director Nicke Widyawati revealed that his party would re-evaluate the refinery projects being undertaken, namely the Bontang Refinery. This also means that the company will no longer continue the process of finding new partners for this refinery project.

"The Bontang refinery hasn't been built yet," said Nicke.

Nicke briefly explained that this step was taken after the demand for fuel oil decreased after the Covid-19 pandemic. The company sees that although it will still grow, the increase in fuel oil (BBM) consumption is not likely to be as high so far. Apart from that, the Company's partners in the Bontang Refinery Project declared their resignation.

"So we will count the refinery project again. Previously there were six refinery projects, four refinery upgrading projects, and two building new refineries, we are correcting this. We only built one new refinery and upgraded four existing ones, ”explained Nicke Widyawati.

On the other hand, in Presidential Regulation number 109 of 2020, the Bontang Refinery Project is still included in the list of National Strategic Projects. Referring to this regulation, refinery projects that are included in the National Strategic Project are the Tuban Refinery Project, repair and upgrading of existing refineries in Central Java, East Kalimantan, Riau, and South Sumatra, upgrading and development of the petrochemical industry in Balongan, West Java, and construction of green refineries in Cilacap, Central Java and in Plaju, South Sumatra.

Soerjaningsih continued, the review of the Bontang Refinery Project would not interfere with the security of fuel supply in the future. For diesel, he said that almost all national needs can be met from domestic refinery production. In fact, for avtur, national production in 2020 can then be exported. The potential for avtur exports will be even greater with the completion of refinery projects.

"Meanwhile, imports of gasoline (gasoline) are still very high. However, with the onstream (operation) of the Balikpapan refinery in 2022 and several other refineries, it still imports [gasoline] but it is not too big, ”he explained.

The Bontang refinery, which was designed to have a capacity of 300 thousand barrels per day (BPD), was scheduled to operate in 2026. Now, without the Bontang Refinery, Pertamina projects that its processing capacity will increase from 1 million bpd to 1.8 million BPD. In addition, fuel production capacity will also increase from 600 thousand bpd to 1.5 million bpd and petrochemical products from 44 thousand bpd to 258 thousand bpd. All refineries will also be able to process crude oil with a sulfur content of up to 2% and produce Euro V quality fuel oil (BBM).

Investor Daily, Page-10, Thursday, Jan 21, 2021

Pertamina EP Adera Field Adds Production 751 BOPD

PT Pertamina EP, a cooperation contract contractor under the supervision of SKK Migas and a subsidiary of Pertamina Persero, has succeeded in increasing oil production by 751 barrels per day / BOPD from the BNG-A1 well at Adera Field. The amount of production is 500% of the initial target of 150 BOPD. The equivalent of oil and gas production from the BNG-A1 well reached 819 BOEPD or 145% of the target of 565 BOEPD, even though gas production reached 0.4 million standard cubic feet per day / MMSCFD.

General Manager of Pertamina EP (PEP) Asset 2 Astri Pujianto said the drilling program needed adjustments given the very strict health protocol for preventing the transmission of Covid-19. This requires regular health screenings to be carried out and of course limiting some activity.

"However, Alhamdulillah, the activities can be carried out, even faster than the specified target time," said Astri.

This drilling program using Rig PDSI D1500-E / 53 1500HP which was initially implemented with a target of 52 calendar days can be completed in 48 calendar days. This results in significant cost and time efficiencies.

Doctor Nirwan Abidin, Medical Supervisor of PEP Asset 2, said that adjustments to health protocols occurred with crew change and personnel operations while in the field. There are differences when carrying out drilling operations in normal times and during a pandemic, such as medical test screening when engineers and operators enter the location.

All personnel is obliged to carry out quarantine for four days and then carry out a PCR test, once the results are negative and they are declared fit to go to the location, after that the personnel is allowed to enter the work location.

"Conversely, if the results are positive and not fit, the person concerned are not allowed to enter the location or work," said Dr. Nirwan.

Nirwan added that although drilling activities were carried out with adjustments to health protocols during the COVID-19 pandemic, drilling activities could be carried out safely, smoothly, and safely. The Well drilling activity was successfully carried out after the completion of drilling in the K1 layer of the Talang Akar Formation (TAF) West Block Benuang Structure which has never been produced in the surrounding wells. As for the drilling in the West Block, the last Benuang Structure was carried out in 1986, so this success would certainly be a new potential and open up opportunities for increased production in the Adera Field.

PEP Asset 2 Exploitation Senior Manager Adang Sukmatiawan said that the success of drilling in BNG-A1 in early 2021 has encouraged the EPT Asset 2 Team to look for new oil reservoirs or reserves that have never been produced and to evaluate the potential for subsurface inter-field.

"We are also working with the Drilling and Workover team to mitigate the potential risks of drilling hazards that may be encountered," said Adang.

    Adera Field currently produces oil of 1,933 bopd and gas of 9.9 mmscfd. Based on SKK Migas' Integrated Operating System (SOT) data at the end of January 2021 year-to-date, PEP Asset 2 crude oil production stood at 17,730 bopd, while natural gas production was around 335 mmscfd. Asset 2's oil and gas production comes from the Prabumulih, Limau, Adera and Pendopo fields.

Investor Daily, Page-9, Saturday, Jan 16, 2021

Aramco Trading Honors Nicke Widyawati Top CEO 2020

 

The Aramco Trading, a global energy company based in Saudi Arabia, named Pertamina President Director Nicke Widyawati as Top CEO 2020. In this award titled The Aramco Trading New Silk Road CEO of the Year in 2020, Nicke Widyawati was named the best CEO for the Energy Refining category.

Nicke Widyawati

Nicke's crowning as Top CEO 2020 is based on the assessment and performance of Nicke who has outstanding achievements in the national oil and gas processing industry at the time of the Covid-19 challenges that hit the world. Nicke is also considered to have an outstanding record in building the progress of the oil and gas industry and interconnecting energy from the Middle East to Asia.

Nicke Widyawati revealed that this award was the result of the hard work of all Pertamina employees. This year, Pertamina experienced triple shocks as a result of the Covid-19 pandemic, namely, the world crude oil price dropped dramatically, decreased demand for fuel oil, and depreciated the rupiah exchange rate against the dollar. However, all Pertamina's business lines will continue to meet the 2020 target.

“Our aspiration is to become a leading global energy company with a market value of US $ 100 billion. The existing refineries and development programs are our commitment to fulfill the tasks mandated by the Government and focus on encouraging the development of refineries that are integrated with petrochemicals, "said Nicke Widyawati.

According to Nicke Widyawati, Pertamina also focuses on developing green refineries and new and renewable energy in order to fully implement the environmental, social, and government framework (ESG Framework). This step is taken so that Pertamina is more agile, adaptive, and sustainable in facing the challenges of the energy transition era which is in line with Pertamina's vision to become a world-class oil and gas company with a market value of US $ 100 billion.

"Within the framework of developing renewable energy, Pertamina will continue to optimize the use of domestic energy sources. The construction of the RDMP (Refinery Development Master Plan) and NGRR (New Grass Root Refinery) megaprojects continues to be completed to achieve national energy independence and sovereignty, "said Nicke Widyawati.

Investor Daily, Page-10, Friday, Jan 15, 2021

Heavy Duty Runway Lifting

 

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

Blogger Agus Purnomo in SKK Migas

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

PT Pertamina EP

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

Blogger Agus Purnomo In Petronas Carigali Ketapang

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

the Cepu Block and Banyu urip Field

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

Blogger Agus Purnomo In PHE-WMO

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The President Joko Widodo

PRICE OF POWER PLANT GAS

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

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

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