The Merakes Project will be Operated in the Second Quarter of 2021

 

    The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) is optimistic that the Merakes Field development project, the East Sepinggan Block, will start operating in the second quarter of this year. This project will generate additional gas production of up to 368 million standard cubic feet per day / MMScfd.

Blogger Agus Purnomo in SKK Migas

    Deputy for Operations of SKK Migas Julius Wiratno said that the work on the Merakes Project which was undertaken by ENI East Sepinggan had been delayed due to the Covid-19 pandemic. The main obstacles faced were restrictions on the movement of goods and Human Resources (HR) required by the project. However, ENI and his party are trying to catch up with the delay in this project.

ENI

"Currently, the activities have been carried out smoothly, so that the project progress has reached 88.5% or only 1.5% slower than the target. We are trying to get the first gas project at the end of April 2021, "said Julius.

the Merakes Field

    This year, gas production from the Merakes Field is targeted to reach 345 MMScfd. This gas production will continue to be boosted so that it can reach peak production of up to 368 MMscfd in 2022.

"Gas from this field will be flowed to the Bontang LNG Refinery in East Kalimantan to fulfill existing market commitments," he added.

    The construction of the Merakes Project began in 2019 with an investment fund of US $ 1.3 billion. In the plan of development / POD for the Merakes Project, ENI plans to drill six underwater wells and build a submarine pipeline system that will be connected to the floating production unit / FPU of Jangkrik Field in the Muara Bakau Block. 

Jangkrik Field

    Later, the Merakes Field gas will be sent via the existing pipe from the Jangkrik Field FPU to the Bontang LNG Refinery operated by PT Badak NGL. Similar to the Jangkrik Field, the Merakes Field will also extend the operating life of the Bontang LNG Plant.

    ENI stated that Merakes Field is estimated to have gas reserves of 2 trillion cubic feet in its official statement. This oil and gas potential was discovered after ENI drilled the Merakes-1 well in 2014. Furthermore, in 2017, ENI drilled the Merakes-2 appraisal well. In January, two Projects Completed SKK Migas succeeded in completing two of the 12 oil and gas projects targeted to operate in 2021.

    The two projects are the KLD Project by PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ) with a capacity of 16 MMscfd and the project to divert gas supply from the South Mahakam Field to the Balikpapan Refinery by PT Pertamina Hulu Mahakam (PHM) 50 Mmscfd. According to Julius, these two projects were successfully completed on time, despite the Covid-19 pandemic.

"The timely implementation of these two projects gives confidence that the implementation of other projects that will be carried out in 2021 can be realized on time," said Julius.

    Together with the cooperation contract contractor (KKKS), they are trying to maximize the implementation of activities in the field. One of them is by accelerating the realization of projects that are supposed to be implemented next year to this year.

"I do not promise, but we are trying to accelerate the achievement of activities like last year. This acceleration requires a very large effort, "said Julius.

    Last year, SKK Migas succeeded in realizing the operation of 15 projects out of the targeted 12 projects, even though one project encountered obstacles.

    Julius hopes that acceleration efforts can be carried out considering that current oil prices are improving faster than world predictions so that they can also increase the economic calculation of upstream oil and gas business activities. After the average world oil price in January reached around the US $ 55 per barrel, the oil price reached US $ 63 per barrel this February. 

    Meanwhile, the oil price assumption in the APBN is the US $ 45 per barrel. The total investment for the 12 upstream oil and gas projects which are scheduled to operate this year reaches the US $ 1.7 billion. The 12 projects will provide additional oil production of 28,508 barrels per day (bpd) and gas of 484.2 MMScfd.

Investor Daily, Page-9, Saturday, Feb 20, 2021

Land Acquisition Completed, Pertamina Continues the Tuban Refinery

 

    PT Pertamina (Persero) through Subholding Refining and Petrochemical, PT Kilang Pertamina Internasional (KPI), is continuing to prepare land for the Tuban Refinery Project, East Java. This step follows the completion of land acquisition belonging to residents who are sure to comply with applicable regulations. KPI Corporate Secretary Ifki Sukarya said the land acquisition for the Tuban Refinery Project has been completed. Currently, his party is continuing to work on the Tuban Refinery Project which is now in the early work stage.

"The clearing of the land is still around 328 hectares and the restoration of abrasion (restoration) covering an area of ​​20 hectares has been completed," said Ifki.

    Ifki explained the majority of affected residents had received reimbursement of funds from Pertamina for land acquisition for the Tuban Refinery Project. The land that has been acquired has been reached 99% of the target area of ​​377 hectares of residents' land. This procurement has gone through all the mechanisms stipulated by Law Number 2 of 2012 concerning Land Acquisition for Development for Public Interest.

    The law has regulated the procedures for land acquisition for refinery construction, namely planning, preparing, implementing, then releasing agency land. In the preparation stage, based on the results of the inventory and identification of land tenure, Pertamina has followed the procedures for assessing compensation in accordance with the provisions by appointing a Public Appraisal Service Office (KJPP) which is then determined through the local National Land Agency.

"KJPP is the one that assesses the land to be taken over," said Ifki.

    Ifki added, Pertamina could not intervene in the land appraisal process carried out by KJPP and other parties. Pertamina also has the principle that this land acquisition process does not harm the residents whose land is affected. In fact, Pertamina also provides education to residents so that they can manage the money from land replacement as well as possible.

"On average, residents own a large area of ​​land. The bigger the land area, the bigger the replacement money will be automatically received, ”he explained.

    Pertamina had stated that the land requirement for the refinery project and petrochemical facilities in Tuban reached around 800 hectares, where part of the land belongs to the community and partly under the Ministry of Environment and Forestry (KLHK). In May last year, the company completed the land acquisition belonging to the Ministry of Environment and Forestry. The Tuban Refinery Project is one of the National Strategic Projects mandated by the Government to Pertamina.

    With the existence of a refinery in Tuban, future fuel needs can be met from domestic refineries, thereby reducing imports. This project is expected to increase the oil processing capacity by 300 thousand barrels per day (BPD) and will produce Euro V standard fuel in the form of gasoline (gasoline) 80 thousand bpd, diesel oil  100 thousand BPD, and Avtur 30 thousand BPD. The Tuban refinery is integrated with a petrochemical refinery with a production capacity of 3,750 kilotons per year.

Rosneft 

    The Tuban Refinery project was carried out by PT Pertamina Rosneft Processing and Petrochemicals (PRPP) which is a joint venture formed by Pertamina and Rosneft Oil Company since October 2016. This joint venture company will work on and manage the Tubang Refinery with 55% share ownership of Pertamina and Rosneft 45 %. The construction of the refinery will also absorb 35% of the domestic component level (TKDN), 20 thousand workers during construction, and 2,500 workers during operation. In addition, in the early stages of development, Pertamina absorbed 271 local Tuban workers.

Investor Daily, Page-10, Thursday, Feb 19, 2021

Without Incentives, Mahakam Block Production has the Potential to Drop

 

    Additional incentives from the government are considered crucial to boost oil and gas production from the Mahakam and Sanga-Sanga blocks. The reason is, without incentives that are able to open new potential, the production of the two oil and gas blocks in East Kalimantan has the potential to drop drastically in the next three years.

Sanga-Sanga blocks

    Head of the Exploration Planning Division of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Shinta Damayanti said that providing additional incentives is very important to boost existing oil and gas production and encourage exploration activities. So far, incentives have been provided for two subsidiaries of PT Pertamina Hulu Energi (PHE), namely PT Pertamina Hulu Sanga-Sanga (PHSS) and PT Pertamina Hulu Mahakam (PHM).

Blogger Agus Purnomo in SKK Migas

"If they are not given incentives, their oil and gas production will decline significantly in 2024," said Shinta Damayanti.

    Deputy for Operations of SKK Migas Julius Wiratno revealed that the government through the Ministry of Energy and Mineral Resources has approved a number of incentives for the Mahakam Block.

"There has been a letter from the Minister of Energy and Mineral Resources dated January 6, 2021, regarding the change of FTP from 20% to 5% and incentives for upstream oil and gas in the form of accelerated depreciation at the cost of capital," he said.

    Apart from this upstream incentive, SKK Migas has also proposed a number of fiscal incentives for the Mahakam Block. These fiscal incentives include exemption from a number of taxes, LMAN tariff fees, and utilization of state-owned goods from the termination block, as well as domestic market obligation (DMO) holidays. This tax exemption includes Value Added Tax (VAT/PPN) and Land and Building Tax (PBB) for the exploitation stage, Income Tax (PPh), and VAT for joint facility operating costs, Income Tax (PPH) and, VAT for the allocation of indirect head office costs, as well as PDRI and import duties.

"Regarding fiscal incentives, SKK Migas was asked to send another letter to be forwarded to the Minister of Finance," explained Julius.

Dwi Soetjipto

    In fact, the Head of SKK Migas Dwi Soetjipto previously stated that all upstream and fiscal incentive instruments were needed to provide a reasonable economy for the Mahakam Block. This is based on the economic study of his party and the Cooperation Contract Contractor (KKKS). SKK Migas has recorded a number of field development plans, including work plans to keep Mahakam Block production from falling.

    For existing production, there is already a plan of development / POD with gas reserves of around 1 trillion cubic feet and 36 million barrels of oil. Later, there are 8 projects that will produce 64.4 billion cubic feet of gas and 6.4 million barrels of oil. For development, there is OPLL 2A which includes the development of South Mahakam, Sisinubi, Handil, and Bekapai which can produce additional gas reserves of 8.6 trillion cubic feet and oil of 5.1 million barrels.

    Next is OPLL 2B in the same fields with projections of additional gas reserves of 38.6 trillion cubic feet and oil of 3.3 million barrels. Then, OPLL 2C includes the construction of a new platform on Sisi Nubi and other activities that are expected to produce 215 billion cubic feet of gas and 0.6 million barrels of oil with 176 wells.

Investor Daily, Page-10, Wednesday, Feb 18, 2021

Pertagas Ensures Smooth Rokan Pipe Project

 

    In the framework of the National Occupational Safety and Health (K3) month of 2021, PT Pertamina Gas (Pertagas) ensures that all aspects of work safety run smoothly in the Rokan Work Area Oil Pipe Replacement Project in Riau. 

    In carrying out this Management Walk Through (MWT), the Technical and Operation Director of PT Pertamina Gas (Pertagas) Rosa Permata Sari visited several project locations including Dumai Metering Station, Batang Station, Duri Stockyard, and Duri Station. Rosa listened to input from project workers and advised all workers to always prioritize safety aspects.

"The important points are Obey, Intervene and Care. These three things must be the values ​​that workers carry out in every role," said Rosa in Dumai, Riau.

    Even though it took place during the Covid 19 pandemic, the Rokan oil pipeline replacement project has successfully passed 783,648 safe working hours. It is hoped that this condition can continue to be maintained until the project is completed by the end of 2021. 

    Rosa stated, this is in line with the commitment of Pertagas as an affiliate company of PT PGN Tbk's gas sub-holding so that in every project implemented, it must be able to prevent incidents by mitigating hazards in the work environment.

    The Rokan oil pipeline replacement project is a national strategic project to maintain the resilience of energy production after the transfer of management of the Rokan block from PT Chevron Pacific Indonesia (CPI) to Pertamina. 

PT Chevron Pacific Indonesia (CPI)

    It is hoped that the resilience of oil production in the Rokan Block can maintain and improve the performance of national oil lifting as primary energy in an effort to advance the national economy.

Investor Daily, Page-10, Wednesday, Feb 18, 2021

Pertamina-Chevron Intensively Discuss the Rokan Block

 

    PT Pertamina (Persero) continues to strengthen its business strategy by preparing for the transfer of management of the Rokan Block which will start operating PT Pertamina Hulu Rokan (PHR) on August 9, 2021. Pertamina continues to coordinate intensively with PT Chevron Pacific Indonesia (CPI) to discuss the Rokan Block.

PT Chevron Pacific Indonesia (CPI)

"We coordinate intensively with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) and CPI, especially regarding the transition to nine main areas in order to ensure the continuity of all operations and routine activities after the Rokan Block is operated by PHR," said PHR's Managing Director. RP Yudantoro.

Blogger Agus Purnomo In SKK Migas

    Yudantoro said that the nine main areas of the Rokan Block transition include drilling workover, electricity and steam supply, contracts and SCM, IT and Petrotechnics, data transfer, human capital, SOPs and permits, chemical EOR and the environment, and abandonment and site restoration (ASR). 

the Rokan Block by Chevron

    Yudantoro said Pertamina's upstream sub-holding through PHR had also prepared a long-term program to maintain production and curb the rate of decline in oil. According to him, the Rokan Block is a block that naturally has experienced a decline in production from year to year condition, Yudantoro continued, efforts to contain the rate of decline and increase production are the most crucial things in the Rokan Block. At least, there will be 44 development wells that will be drilled in 2021 after the Rokan Block is transferred to Pertamina.

    Pertamina Hulu Energi (PHE) Corporate Secretary Whisnu Bahriansyah said the readiness to transfer the management of the Rokan Block was not only carried out in the operational aspect but also fostering good relations with stakeholders. The Rokan Block is a production contributor block as much as 24 percent of national production. 

    Currently, the PT Chevron Pacific Indonesia (CPI) operates with an average production of around 165 thousand barrels per day. The Rokan Block has five large fields, namely Duri, Minas, Bangko, Balam South, and Petapahan which are scattered in five districts in Riau Province.

PT Perusahaan Listrik Negara

    The development of the Rokan Block involves a number of State-Owned Enterprises (BUMN). Apart from Pertamina, PT Perusahaan Listrik Negara (Persero) will meet the demand for electricity and steam in the Rokan Block working area. PLN has signed a power and steam power purchase agreement (SPJBTLU) with PHR.

    PLN will optimize the three-year transition period by constructing the Sumatra system interconnection to replace the transitional supply and increase the supply capacity to PHR. In 2024, it is estimated that the Sumatra system's power reserve will be 3,811 megawatts (MW) or 46.1 percent, so it is certain that it is ready to meet the electricity needs of the Rokan Block.

Investor Daily, Page-10, Tuesday, Feb 17, 2021

Pertamina Prepares 9 Main Areas for Transfer of Management of the Rokan Block

 

    PT Pertamina (Persero) continues to strengthen its business strategy by preparing for the transfer of management of the Rokan Block, which Pertamina will start operating through its subsidiary PT Pertamina Hulu Rokan (PHR) on August 9, 2021. For the transition, 9 main areas were prepared to ensure the continuity of all operational activities and routine activities after the block was operated by PHR.

PT Chevron Pacific Indonesia (CPI)

"We coordinate intensively with SKK Migas and PT Chevron Pacific Indonesia (CPI), especially for the transition to 9 main areas in order to ensure the continuity of all operational activities and routine activities after the block is operated by PHR," said the President Director of PT Pertamina Hulu Rokan (PHR). RP Yudantoro.

    The nine main areas of the Rokan transition include Drilling Work Over, Electricity and Steam Supply, Contracts and SCM, IT and Petrotechnical, Data Transfer, Human Capital, SOP and Licensing, Chemical EOR, and Environment and ASR (Abandonment and Site Restoration). 

    Sub holding Upstream Pertamina through PHR has also prepared a long-term program to maintain production and curb the rate of decline in oil. The Rokan Block is a block that has experienced a natural decline in production from year to year. For this reason, efforts to contain the rate of decline and increase production are the most crucial things.

    There will be at least 44 development wells that will be drilled in 2021 after the block is transferred to Pertamina. And another 40 additional development wells are planned, according to discussions with SKK Migas. 

Blogger Agus Purnomo in SKK Migas

    Yudantoro explained that apart from drilling development wells, in the long term other programs have also been prepared in the form of Infill Drilling, exploration well drilling, workover/well intervention, optimization of waterflood and steam flood programs, CEOR, and other programs to increase reserves.

"In accordance with the period of the production sharing contract with the Government, the Rokan Block will be operated until 2041 by PHR. At that time, we had to ensure that the Rokan Block would continue to contribute optimally to national production through the various programs we implemented, "said Yudantoro.

    Whisnu Bahriansyah, Corporate Secretary of Pertamina Hulu Energi (PHE), added that readiness for management transfer is not only carried out in the operational aspect but also in fostering good relations with stakeholders.

"Subholding Upstream Pertamina through PHR also prepares community programs, so that after the transfer of management it is not only the operational side that will run sustainably but also on the social, community and environmental side," concluded Whisnu.

    The Rokan Block is a production contributor block as much as 24% of national production. Currently operated by PT Chevron Pacific Indonesia with an average production of around 165 thousand barrels per day. The Rokan Block has five large fields, namely Duri, Minas, Bangko, Balam South, and Petapahan, which are spread across five districts in Riau Province.

Investor Daily, Page-10, Tuesday, Feb 17, 2021

2021, Domestic LNG Sales are Projected to Decrease

    PT Pertamina (Persero) projects domestic sales of Liquefied Natural Gas / LNG) this year to drop to 17.6 cargoes compared to last year's 23.5 cargoes. This is because the domestic market is still affected by the Covid-19 pandemic.

President Director of Pertamina Nicke Widyawati

    President Director of Pertamina Nicke Widyawati said that the Covid-19 pandemic has suppressed domestic gas demand this year when compared to 2020. The fall

    The main demand for LNG is from PT PLN (Persero) after the drop in electricity consumption has prompted the company to prioritize electricity production from the PLTU.

"In total national LNG demand this year is 17.6 cargoes from 23.5 cargoes in 2020," he said in a meeting with Commission VII in the energy sector of the Indonesian House of Representatives.

    LNG sales also dropped significantly from the realization in 2019 which reached 38.3 cargoes. Referring to Pertamina's data, of last year's total LNG sales of 23.5 cargoes or 68.35 trillion British thermal units (TBTU), supply to PLN reached 22.5 cargoes. In detail, the supply to PLN is through FSRU Lampung with 18 cargoes, Benoa 3.2 cargoes, Amurang 0.4 cargoes, and Samberah 0.9 cargoes. 

    Meanwhile this year, the projected sales of 17.6 cargoes are entirely for PLN, namely through FSRU Lampung with 13 cargoes, Benoa and Amurang 3 cargoes, and Samberah 1.6 cargoes. Even though in 2019, LNG demand from PLN reached 37.2 cargoes, namely through FSRU Lampung 3.2 cargoes, Benoa 3.2 cargoes, and Samberah 0.6 cargoes.

    Apart from PLN, domestic LNG sales are also to PT Pupuk Iskandar Muda (PIM) and PT Pertamina Niaga. However, PIM only needs LNG when it supplies gas through pipeline insufficient, while Pertagas Niaga has no need in 2020 and 2021. In detail, LNG sales to Pertagas Niaga are 1.1 cargoes in 2019 and PIM 1.1 cargoes in 2020. Seeing this condition, exports need to be made to market the company's LNG production. 

    Although, the global gas market is also constrained by the impact of the Covid-19 pandemic, even demand from Japan and China, which are the largest markets, also fell.

"However, we are still maintaining the foreign market so that the projection in 2021 overseas demand is 68.3 cargoes, a slight increase from 2020," he said.

    The company's LNG export realization last year, according to data, reached 60.6 cargoes, namely to China 22.1 cargoes, Japan 21 cargoes, South Korea 10 cargoes, Taiwan 3.2 cargoes, Pakistan 1.1 cargoes, Singapore 0.4 cargoes, and Thailand 2.7 cargo. 

    Meanwhile, in 2019, the company's LNG exports reached 72.2 cargoes with the aim of China 18.6 cargoes, Japan 41 cargoes, South Korea 4.2 cargoes, Taiwan 3.4 cargoes, Pakistan 1.1 cargoes, Singapore 1.3 cargoes, and Thailand 2.6 cargo.

   

Blogger Agus Purnomo in SKK Migas

 Deputy for Finance and Monetization of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Arief S Handoko revealed that competition for LNG sales in the global market will be tighter after the Covid-19 pandemic which continues this year.

"The price of LNG has become a new normal because there are more LNG suppliers, so the price competition is getting tighter," said Arief.

Refinery Needs

    In the future, Pertamina is optimistic that domestic gas demand will increase. According to Nicke, the increase in gas demand is one of the reasons for the completion of the improvement and capacity-building project (upgrading) of existing refineries and the construction of new refineries. Gas demand for refineries is estimated at 1.5 million tons per year and will increase to 6.4 million tons per year in 2025. The company plans to replace the fuel at the refineries with gas.

"So that gasification occurs and will reduce the cost of energy for the Pertamina Group as a whole," said Nicke.

    However, referring to Pertamina's data citing Indonesia's 2018-2027 Gas Balance Sheet, the national gas supply will experience a deficit of up to 8.25 million tons per year starting 2025. This is in accordance with Pertamina's gas supply-demand analysis and supported by international publications related to the forecast of global LNG supply-demand. also will be a deficit from 2023-2024.

"With the commitment of the domestic market and industry, we must make future projections so that gas supply will continue for generation and other industries," said Nicke.

    In addition, the development of gas infrastructure, both midstream and downstream, must be carried out. Even the gas needs for refineries, referring to Pertamina's data, show that the company only has a commitment to supply LNG until 2023. In fact, Pertamina needs a guarantee of gas supply certainty for all refinery projects to meet the requirements of the project lenders. 

    According to Nicke, his party has sent a letter to the Ministry of Energy and Mineral Resources asking for gas allocation for these refinery projects. At the same time, to mitigate risks, his party is also building infrastructure so that refineries can get LNG.

"Discussions have been carried out, with SKK Migas as well. There is a commitment from natural gas, to ensure continuity of supply, we are building LNG infrastructure as well, "said Nicke.

Investor Daily, Page-10, Thursday, Feb 11, 2021

Pertamina EP Sangatta well reaches production of 415 BPH

 

    PT Pertamina EP Asset 5 Sangatta Field (PEP) recorded oil production of 415 barrels per day (bpd) from the ST-200 well at the end of drilling on January 30, 2021. This product is three times higher than the predicted figure from the well as of December 28. 2020.

    Sangatta Field Manager Hanif Setiawan said the successful production of the ST-200 well is the hard work of various parties that work together between PEP Sangatta, partners, PDSI, local government, and community members.

"The success of the ST-200 is proof that the synergy between lines including with stakeholders and running an unusual business operation by adapting a pandemic situation through a good COVID-19 protocol not only provides additional oil and gas production but more than that safety and health is maintained. , "said Hanif.

    Drilling of the ST-200 well located in Topo Indah Hamlet, Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency is carried out to a final depth of 2,203 meters Measure Depth (mMD) /2,076 meters True Vertical Depth (mTVD). Drilling uses rig 22.2 / OW700-M owned by Pertamina Drilling Services Indonesia (PDSI).

    PEP Sangatta continues to make the best efforts in the Well drilling process by maintaining strict health protocols from the start of preparation until drilling is carried out. The crew involved in this drilling has passed the COVID-19 health protocol screening implemented at Pertamina EP (PEP) and the local government.

    The HSSE aspect remains a full concern during the drilling process of the ST-200 well. HSSE aspects are ensured to be fulfilled for the safety and security of all parties involved. PEP Sangatta will continue to maintain and increase production through further Well drilling. 

    As a form of gratitude for the achievement of the ST-200 well drilling, PEP Sangatta distributed groceries to the people of RT 01 and RT 02 of Topo Indah Hamlet, Sangatta Selatan Village, and renovated one of the prayer rooms not far from the drilling location.

   The Head of Topo Indah Hamlet, Sulaiman expressed his gratitude to PEP Sangatta because, in addition to the residents getting assistance, some residents are also involved as drilling workers, both skilled and non-skill.

"Hopefully this Wells drilling and beyond will be successful and bring blessings. Pertamina Jaya !, "said Sulaiman.

Blogger Agus Purnomo in SKK Migas

    As a subsidiary of PT Pertamina (Persero) as well as a cooperation contract contractor (KKKS) operating under the supervision of SKK Migas, PEP is committed to meeting the country's energy needs through the management of oil and gas fields in various regions, one of which is Kalimantan. PEP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the plan for reworking the wells for 2021 drilling 18 development wells and five well rework plans.

    This activity is carried out to support SKK Migas' ideals of realizing 1 million bpd of oil production and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas Integrated Operating System (SOT) report dated February 4, 2021, year-to-date, PEP Asset 5 able to carve crude oil production from Kalimantan amounting to 16,172 bpd. 

Sanga-sanga Block

    Meanwhile, gas production is around 15.44 million standard cubic feet per day. This production is supported by five oil and gas fields, namely Sangatta and Sangasanga (East Kalimantan), Tarakan and Bunyu (North Kalimantan), and Tanjung (South Kalimantan and Central Kalimantan). Sangatta Field throughout 2020 recorded an oil lifting of 696,065 barrels of oil or 101% of the target. Production was recorded at 682,734 barrels of oil or 110% of the target.

Investor Daily, Page-10, Tuesday, Feb 9, 2021

WORKING TO MAINTAIN THE PRODUCTION OF THE CEPU BLOCK

    The cooperation contract contractor who holds the participation right in the Cepu Working Area is racking his brain to reduce the rate of natural production decline in the block which accounts for about 30% of the national oil.

PT Pertamina EP Cepu (PEPC)

    Meanwhile, the participating shareholders in the Cepu Block are divided into seven companies, namely PT Pertamina EP Cepu (PEPC) with a 45% share, ExxonMobil Cepu Ltd (EMCL) 20.5%, 

ExxonMobil Cepu Ltd (EMCL)

    Ampolex. (Cepu) Pte. Ltd. 24.5%, PT Sarana Patra Hulu Cepu 1.09%, PT Asri Dharma Sejahtera 4.48%, PT Blora Patragas Hulu 2.18%, and PT Petrogras Jatim Utama Cendana 2.24%.

    President Director of Pertamina EP Cepu Awang Lazuardi said that in connection with the potential decline in production after reaching the peak period this year, his party will coordinate intensively with a number of partners. According to him, Pertamina EP Cepu will actively communicate with ExxonMobil Cepu as the operator of the Banyu Urip and Kedung Keris fields, as well as other participating rights holders.

PT Pertamina Hulu Energi (PHE)

    In addition, together with PT Pertamina Hulu Energi (PHE) as the company's sub-holding and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), his party will compile further strategic steps. Meanwhile, a number of work plans that are being and will continue to be carried out include maintaining reservoir pressure, well intervention/services, and preventive maintenance.

Blogger Agus Purnomo in SKK Migas

"Coordination with EMCL [Exxonmobil], our partners, and SKK Migas will continue to be carried out in compiling a work plan and execution," he said.

    Previously, Exxonmobil was exploring all options to optimize production in the Cepu Block, which has entered its peak period. Azi N. Alam, Vice President of Public and Government Affairs of ExxonMobil Indonesia, said that the company continues to explore various options to optimize the production of the Cepu Block safely and reliably.

"As the backbone of national oil production, we hope to produce more than double the initial expectations," he said.

    Based on the results of Exxonmobil's technical study, Azi explained that the recoverable reserve of the Banyu Urip Field has more than doubled from the initial plan of development (PoD) of 450 million barrels of oil to 940 million barrels of oil. According to Banyu Urip's PoD, the peak production period is estimated to be around 2 years with an average annual production of 165,000 barrels of oil per day. However, since the full facility start-up, ExxonMobil has been producing up to 225,000 barrels of oil per day for about 5 years.

    Production had increased by about 30% from the initial POD and peak production was 3 years longer than originally estimated. However, due to the natural characteristics of the reservoir, which is common throughout the world, ExxonMobil predicts Banyu Urip oil production will decline.

“Despite our continued efforts to optimize production, we have maintained outstanding safety and reliability performance as well cost-effective operation, "he explained.

Dwi Soetjipto

    Head of SKK Migas Dwi Soetjipto said that the Cepu WK has a big role and contribution to the achievement of national oil and gas, including the production target of 1 million barrels of oil per day.

"The 2021 target for the Cepu Block working area will produce 219,860 barrels of oil per day and 55.16 MMscfd of gas," he said.

    Regarding the production target of 1 million barrels of oil per day, the government still needs to find an additional 350,000 barrels per day within 9 years. Member of Commission VII in the energy sector of the House of Representatives, Kardaya Warnika, said that the current condition in increasing domestic oil and gas production is the provision of incentives. The government is selling out incentives to contractors to spur exploration activities which he calls suspended animation.

"Given any incentives, but the legal certainty is not yet, investors are still in doubt," he said.

    Oil and gas practitioner Widyawan Prawira Atmaja said that the revision of the Oil and Gas Law, which has stopped for almost 9 years, is now crucial. He also urged Commission VII on the energy sector of the House of Representatives to immediately finalize the law to improve the domestic oil and gas investment climate. Energy Watch Executive Director Mamit Setiawan assessed that to achieve this vision one of the biggest obstacles is legal certainty.

    According to him, the certainty of new regulations is one of the key investments expected by oil and gas investors. In addition, the form of SKK Migas which is only issued through a Presidential Regulation is considered to provide uncertainty to investors.

SANGATTA OIL FIELD

    In another development, PT Pertamina EP Asset 5 Sangatta Field recorded oil production of 415 barrels per day from the ST-200 well. The record has tripled compared to production in December 2020.

    Hanif Setiawan, Sangatta Field Manager, said that the increase in production was an effort made between Pertamina EP Sangatta, Pertamina Drilling Service Indonesia, and the local government.

"The success of the ST-200 is proof that by synergizing between lines and running an unusual business operation by adapting to a pandemic situation, not only does it provide additional oil and gas production, but more than that, safety and health are maintained," he said.

    Drilling of the ST-200 well located in Sangatta Selatan Village, Sangatta Selatan District, East Kutai Regency, is carried out to a final depth of 2,203 meters measured depth (mMD) or 2,076 meters true vertical depth (mTVD). Pertamina EP, through the PEP Asset 5 operating unit, will drill 50 development wells and carry out the work of the Wells work plan for 2021.

    For Sangatta Block, 18 development wells will be drilled and five well work plans will be carried out. This activity is expected to contribute to efforts to produce 1 million barrels of oil per day and 12 billion standard cubic feet of gas per day by 2030. Based on the SKK Migas integrated operating system report on February 4, 2021, on a year-to-date basis, PEP Asset 5 is able to record Crude oil production from Kalimantan is 16,172 barrels per day.

    Meanwhile, for gas, production is around 15.44 MMscfd. This production is supported by five oil and gas fields, namely Sangatta and Sangasanga (East Kalimantan), Tarakan and Bunyu (North Kalimantan), and Tanjung (South Kalimantan and Central Kalimantan).

"For Sangatta Field, during 2020, oil lifting recorded as much as 696,065 barrels or 101% of the target. Production was recorded at 682,734 barrels or 110% of the target, "said Hanif.

Bisnis Indonesia, Page-19, Tuesday, Feb 9, 2021

Exxon Mobil Optimizes Cepu Block Oil Production

 

Exxon Mobil Cepu Limited (EMCL) continues to strive to optimize Cepu Block oil production in the future. On the other hand, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) projects that Cepu Block production will naturally start to decline in 2022 if there is no effort whatsoever.

Blogger Agus Purnomo in SKK Migas

Vice President of Public and Government Affairs ExxonMobil Indonesia Azi N Alam said, referring to the Banyu Urip block's plan of development / POD, the peak production period of around 165 thousand barrels per day (BPD) is estimated to last about two years. 

Exxon Mobil Cepu Limited (EMCL)

    However, his party has reached production of up to 225 thousand BPD in about five years. This means that the Cepu Block has reached 30% higher production and is three years longer than the original plan. However, like the natural characteristics of reservoirs around the world, he did not deny that Banyu Urip Field production would decline.

Banyu Urip Field ExxonMobil

"But Exxon Mobil continues to explore options to optimize the production of the Cepu Block safely and reliably, together with SKK Migas and our partners," said Azi.

Azi explained that Banyu Urip is a world-class productive resource. Based on the results of a technical study, Banyu Urip's recoverable reserve has more than doubled from the initial POD of 450 million barrels of oil to 940 million barrels. By early 2021, Banyu Urip has exceeded its original POD commitment by producing more than 450 million barrels since January 2016.

“This achievement is a testament to ExxonMobil's world-class project design and management, safe operation, and prudent reservoir management. As the backbone of national oil production, we expect to produce more than double our initial expectations. This is certainly very beneficial for all stakeholders, "he explained.

Dwi Soetjipto

Head of SKK Migas Dwi Soetjipto said this year Cepu Block production is targeted to reach 219.86 thousand BPD for oil and 55.16 million standard cubic feet per day / MMscfd for gas. The amount of oil production is equivalent to 30% of the national oil production this year. The production of the Cepu Block will gradually decrease starting in 2022.

"So we focus on how to maintain the natural decline in the Cepu and Mahakam blocks. In the Cepu Block, the amount of gas is starting to increase, ”he said.

Several strategies are being prepared to hold the Cepu Block production, namely good reservoir management, monetization of untreated gas, optimization of field development and drilling, and development of clastic formations.

"Apart from that, the development of surrounding fields, such as Cendana and Alas Tua," said Dwi.

Previously, in December 2019, Exxon Mobil operated the Kedung Keris Field which supported the production of the Cepu Block. The field can produce up to 10 thousand BPD of oil, while the reserves reach 20 million barrels of oil.

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