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How to Measure the ROI in Training

Training and development have become ever more important as companies face significant skills gaps during this rapidly changing business environment.

How will you know if your training meets the skills gaps and generates the desired impacts to make your company successful?

The original model of training evaluation developed by Raymond Katzell suggested that training should be evaluated in four steps:

Step 1: Measure reaction.

Step 2: Measure learning.

Step 3: Measure behavior.

Step 4: Measure results.

This is the model that Kirkpatrick promoted for many years. Dr. Jack Phillips, the author or editor of more than 100 books, went further to define the methodology and add another step. He, with many other practitioners, began to call these levels. These levels of evaluation are

Level 1 – At level one, the results of training are assessed based on participants’ reactions to the training and the action plan submitted by the participants. This is commonly done immediately after the training.

Level 2 – At level two, the results of training are assessed by how much learning is acquired by participants. This is done by conducting some form of testing.

Level 3 – At level three, the training evaluator will find out if the acquired skills, knowledge, or attitude (SKA) are applied and implemented by the trainees. This is usually done several weeks or months after training.

Level 4 – At level four, evaluators assess the impact, both tangible and intangible, of the training several weeks or months after the training. Examples of tangible impacts are cost savings, higher productivity, better quality, sales increase, etc. Examples of intangible benefits are attitude improvement, better communication, etc.

Level 5 – At level five, evaluators measure the return on investment of training or any other people development program.

Phillips went on to develop process standards and pushed the methodology through the ROI Certification process. Today, over two-thirds of the Fortune 500 companies use this methodology, 26 governments around the world, many NGOs, non-profits, approximately 300 health care organizations, and 150 universities. It is now the most used evaluation system in the world.

ROI is an important measure that is used to show the efficient use of funds. Management is interested in ROI as it compares the actual monetary benefits of the training program relative to the total costs of the training.

STEPS TO MEASURE THE ROI

Here are the steps to measure the ROI of a training program.

  1. Design the training based on business needs.
  2. Plan the training to be evaluated at all levels.
  3. Design the training such the skills, knowledge, or attitude taught can be applied and implemented on the job.
  4. Collect Level 1 data – reactions and action plans of trainees- at the end of training.
  5. Collect Level 2 data – learning – at the end of training.
  6. Collect Level 3 data – application and implementation – several weeks or months after training.
  7. Collect Level 4 data – Both the tangible business impacts and the intangible impacts – several weeks or months after training.
  8. Isolate the effect of the program by identifying other factors that may impact the outcomes of the program. This is a critical aspect in producing credible ROI results.
  9. Convert Level 4 data into monetary values of the training benefits.
  10. Annualize the monetary values to determine the monetary benefit of the training over 12 months.
  11. Collect data on the total costs of training.
  12. Calculate the ROI using this formula.  ROI = (Benefits – Costs)/Costs x 100%

THE BENEFITS OF MEASURING ROI

As the need for skill-building is increasing and the training budget is getting bigger, it is important to know whether you are getting positive values from your investment in training.

When you have the ROI data to prove to management the value of your training, you will get more supports for the training programs you plan conduct in the future.

Dr. Jack J. Phillips is the pioneer in measuring the ROI in training. Over the past 20 years, Dr. Jack Phillips and Dr. Patti Phillips have trained and certified thousands of training professionals on the ROI Methodology. More than two-thirds of the Fortune 500 companies are applying this methodology in the training they conduct.  

How about your organization? Does your management ask you to measure the ROI or financial benefits of your training programs? Have you done this before? Do you have the competency and confidence to do it?

Finally, it is important the ROI result you come out with is correct and credible. As the implementation in each step of the measuring process can be quite involved, you need to fully understand the whole process of ROI measurement.

Top Five Refineries in Indonesia

The Balikpapan refinery complex. Photo courtesy of Chaz Tumbelaka.

Indonesia currently has six oil refineries and they are all operated by Pertamina, the national oil company of Indonesia.

Here are the top five refineries in Indonesia:

  • Dumai Refinery, officially known as Unit Pengolahan II Dumai
  • Plaju Refinery, officially known as  Unit Pengolahan III Plaju
  • Cilacap Refinery, officially known as Unit Pengolahan IV Cilacap
  • Balikpapan Refinery, officially known as Unit Pengolahan V Balikpapan
  • Balongan Refinery, officially known as Unit Pengolahan VI Balongan

Besides these five refineries, Pertamina operates a small 10,000 BOPD Kasim refinery in Sorong, West Papua.

With a total capacity to process 1,046,700 barrels of crude oil per day, all refineries in Indonesia are currently supplying about 50% of the domestic fuel needs.

In 2019, Indonesia imported 24.7 billion liters of fuel.

To meet its domestic fuel needs, Indonesia intends to produce all the fuels it needs by 2026. It hopes to increase the crude processing capacity to two million barrels per day in 2025 under the ambitious 17 billion dollar Refinery Development Master Plan (RDMP).

Based on the RDMP, the top five refineries will be upgraded to increase their capabilities and capacity. Currently, Pertamina is expanding and upgrading the Cilacap and Balikpapan refineries.

Pertamina also has a plan to build two new refineries: one in Tuban in East Java and one in Bontang in East Kalimantan.

The project to construct the 300,000 barrels of crude oil per day Tuban refinery is currently underway. It is expected to complete in 2026.

Here are the details of the top five refineries.

DUMAI REFINERY

Dumai refinery started operating in 1971 and it is located in Dumai in Sumatera.

The Dumai refinery is designed with a capacity to process 170,000 barrels of crude oil and it supplies Sumatera with fuels such as gasoline, aviation fuel, diesel fuel, kerosene, solvent, green coke, and LPG.

This refinery is unique as it produces the power it needs using the natural gas produced from the surrounding gas fields namely the Grissik field operated by ConocoPhillips, the fields in the Bentu block operated by Mega Energi Persada (PT EMP), and the Jambi Merang gas fields operated by Pertamina Hulu Energi Jambi Merang (PHE Jambi Merang).

By using the natural gas produced from these fields, the Dumai refinery can reduce its fuel cost by 40%.

PLAJU REFINERY

The Plaju refinery and petrochemical complex comprises two old refineries located in the Palembang area in South Sumatera: one in Plaju and another one in Sungei Gerong.

The refinery in Plaju is the oldest existing refinery in Indonesia. It was built in 1904 by BPM (Batavia Petroleum Maatschappy), a predecessor of Shell. Pertamina acquired this refinery from BPM in 1949.

The refinery at Sungei Gerong was built by SVPM (Standard Vacuum Petroleum Maatschappij) 1926. Pertamina acquired this refinery from Stanvac in 1970.

Pertamina integrated these two refineries in 1972 by constructing connecting pipelines and officially called them Unit Pengolahan III Plaju.

The integrated Plaju refinery and petrochemical complex has a combined refining capacity of 118,000 barrels per day. It processes crude oil and intermediate products to produce gasoline, kerosene, diesel fuel, the B20 biodiesel fuel, aviation fuel, and fuel oil.  

The types of gasoline it produces include the Premium, Pertalite, Pertamax, and Pertamax Racing.

The Plaju refinery also produces petrochemicals such as Polypropylene and PTA.

According to Pertamina, the Plaju refinery and petrochemical complex will see a new stand-alone 20,000 barrels per day “Green Refinery” in 2024 taking advantage of the locally produced crude palm oil (CPO). The new unit will produce green diesel fuel, green aviation fuel, green naphtha and green LPG.

CILACAP REFINERY

The Cilacap refinery is the largest and most integrated refinery and petrochemical complex in Indonesia. With its current refining capacity of 348,000 barrels of crude oil per day, it produces 34% of the total fuel production in Indonesia.

The Cilacap refinery was initially completed in 1976 with a capacity of processing 100,000 barrels of crude oil per day. However, as a strategic refinery due to its location being in Central Java, it has been revamped and expanded several times. 

Today, this Pertamina Unit IV refinery and petrochemical complex consists of three units:

  • Oil Refining Unit #1
  • Oil Refining Unit #2
  • Paraxylene Unit

Oil Refining Unit #1 was completed in 1976 with a capacity of processing 100,000 barrels of oil per day and it was designed to specifically handle crude oil from the Middle East.

This refining unit produces gasoline, lube oil, and asphalt. It underwent debottlenecking in 1998 to increase its refining capacity to 118,000 BOPD.

To meet the increasing demand for fuel, Oil Refining Unit #2 was completed in 1983 with a capacity of 200,000 BOPD. Its capacity was later increased to 230,000 BOPD in 1998.

This second unit is designed to handle both crude oil from the Middle East and Indonesia.

The Paraxylene Unit, completed in 1990, produces petrochemicals such as paraxylene, benzene, raffinate, and heavy aromatic. Some of these products are shipped to the Plaju refinery for further processing.

BALIKPAPAN REFINERY

The famous Balikpapan refinery was completed in 1922 by BPM (Bataafsche Petroleum Maatschappij), the predecessor of Royal Dutch Shell.  It was built to process the crude oil that BPM had discovered in Balikpapan in East Kalimantan.

The refinery was heavily damaged twice during World War II and subsequently restored. It was later acquired by  Pertamina from BPM in 1949.

The refinery has been expanded and upgraded several times to meet the increasing demand for fuel in the eastern part of Indonesia.

The Balikpapan refinery is the second-largest refinery in Indonesia. At its current crude oil processing capacity of 260,000 barrels, it processes 25% of the total crude oil intake and supplies about 15% of the fuel needs in Indonesia.  

Under the RMDP refinery expansion plan, it is set to become even bigger. It is currently undergoing a massive 5 billion dollar expansion which will increase its processing capacity from 260,000 barrels per day to 360,000 barrels per day.  

Besides increasing its processing capacity, the expansion project is also aimed to improve its crude flexibility and product quality. The refinery will have the capability to produce high-quality Euro V standard fuels.

The Balikpapan refinery expansion includes:

  • A residual fluid catalytic cracker (RFCC) unit with a design capacity of 90,000 barrels per stream per day (BPSD)
  • An LPG sulfur removal unit,
  • A propylene recovery unit
  • An 80,000 BPSD middle distillate hydrotreater.

The project will also upgrade the existing vacuum distillation unit (VDU), crude distillation unit (CDU), hydrocracker unit (HCU), and LPG recovery units to increase the production of Euro V gasoline, diesel fuel, and LPG by 100,000 BPD, 30,000 BPD and 930 tons respectively per day.

Included in the project is the expansion of the crude oil receiving capacity by adding:

  • A single-point mooring system and a pipeline end manifold, capable of handling crude carriers with 320,000 deadweight tonnage (DWT).
  • A 20-inch onshore pipeline from Lawe-Lawe terminal to Panajam terminal.
  • A 52-inch subsea pipeline from the Panajam terminal to the refinery.
  • Two new one-million barrel capacity crude oil storage tanks.

Balongan Refinery

Located in Indramayu, West Java, the Balongan refinery was completed in 1994. It was revamped in 2003 to increase its processing capacity to 130,000 barrels of crude oil per day.

The Balongan refinery and petrochemical complex is designed to process crude oil from the Duri and Minas fields.

It produces a variety of fuels such as Premium, Pertamax, Pertamax Plus, diesel fuel, kerosene, and LPG. It also produces petrochemicals such as propylene.

This Unit VI refinery of Pertamina is a strategic and vital refinery to Indonesia as it supplies the fuel needs of the nation’s capital city of Jakarta and West Java.

The Balongan refinery prides itself for being the refinery that applies eco-friendly technology and that processes residue into high-quality products.

The refinery experienced a fire incident on 29th March 2021. Four of its storage tanks caught fire.

Kasim Refinery

The 10,000 BPD Kasim refinery is the newest but the smallest refinery of Pertamina.

Located in Sorong in West Papua, Kasim refinery was completed in 1997 to meet the needs for fuels in the most eastern part of Indonesia. It takes advantage of processing the crude oil produced from the nearby fields of Walio and Salawati.


This Pertamina Unit VII refinery is currently operating below its design capacity of 10,000 BOPD. This is due to the declining oil production from the two oil fields.

To make the plant economical to operate, Pertamina will need to increase the crude supply by bringing in crude oil via oil tankers. To do so, it will need to construct four 110,000 barrel storage tanks.

Currently, the Kasim refinery is supplying less than 15% of the fuel needed in Papua and Maluku. It is hoped that Kasim can process 50,000 BOPD in the future.  

This article is adapted by Jamin Djuang from information published by Pertamina and other sources. He is the Chief Training Officer of LDI Training.

Pertamina’s Upstream Assets and Organization

The Sepinggan Field of Pertamina in East Kalimantan- Photo courtesy of Heru Suparto

PT Pertamina (Persero) is the national oil company of Indonesia, and also the largest company in Indonesia. It is the parent holding company of all the many Pertamina subsidiary companies.

Pertamina is big. As an integrated oil company, Pertamina involves in oil and gas exploration and production, refining and petrochemicals, gas distribution through pipelines, distribution of fuels, and lube oil to every corner of the land. It is also a producer of renewable energy such as geothermal energy.

On the upstream side, Pertamina owns many oil fields and work areas and has vast and expansive oil exploration and production operations in Indonesia. It also has oil and gas interests in several other countries.

Pertamina’s upstream oil and gas interests are under the wings of PT Pertamina Hulu Energi (PHE). It is the sub-holding company of PT Pertamina (Persero) in charge of its entire upstream oil and gas assets and operations in Indonesia and overseas.

The current CEO of PT Pertamina Hulu Energi is Budiman Parhusip.

Pertamina has come a long way. Its assets include oil and gas assets that Pertamina itself develops, assets it acquired from BPM (Bataafse Petroleum Maatschappij), assets it acquired from international companies upon the expiry of their production sharing contracts, and its oil and gas assets overseas.

Pertamina grew significantly in 2021 as it acquired the huge and prolific Rokan block from Chevron in Sumatera.

As Pertamina’s oil fields are located in many islands of Indonesia covering a vast area of more than 113,000 Km2, its assets and operations are divided into five regions. Each region is further divided into zones.

Here are the five regions including the zones under each region and their leadership teams.

REGION 1- Sumatera

Pertamina’s assets in Sumatera fall under Region 1 and they are managed under PT Pertamina Hulu Rokan (PHR).

Consisting of four zones, Pertamina Hulu Rokan manages the following assets:

  • In Zone 1 – North Sumatera Offshore (NSO), North Sumatera Basin (NSB), Rantau, Pangkalan Susu, West Glagah Kambuna, Siak, Kampar, Lirik, Jambi, Jambi Merang, Jabung
  • In Zone 2 – North Rokan (Rokan Utara)
  • In Zone 3 – South Rokan (Rokan Selatan)
  • In Zone 4 – Ogan Komering, Raja Tempirai, Ramba, Corridor, Prabumulih, Limau, Pendopo, Adera 

Here is the current leadership team stewarding Pertamina’s exploration and production activities in Region 1.

  • Novy Hendri – VP Exploration
  • Tri Sasongko – VP Development and Drilling
  • Junizar Harman – VP Operation and Production
  • Saptiadi Nugroho – VP Business Support
  • Ani Surakhman – General Manager of Zone 1
  • Ahmad Miftah – General Manager of Zone 4

REGION 2 – Java and Natuna

Region 2 covers Pertamina upstream activities in West Java and the Natuna Sea, and they are managed under PT Pertamina Eksplorasi dan Produksi (PEP).

Here are the zones in Region 2 and the assets under each zone.

  • Zone 5 – Offshore North West Java (PHE ONWJ), Abar, Anggursi
  • Zone 6 – Offshore South East Sumatera (PHE OSES)
  • Zone 7 – Tambun, Subang, Jatibarang, East Natuna, The Natuna Sea Block A

Here is the new leadership team of Region 2.

  • Muharram Jaya – VP Exploration
  • Merry Luciawaty – VP Development and Drilling
  • Wisnu Hindadari – VP Operation and Productions
  • Bongbongan Tampubolon – VP Business Support
  • Achmad Agus Miftakhurrohman – General Manager of Zone 5
  • Cosmas Supriatna – General Manager of Zone 6
  • Astri Pujianto – General Manager of Zone 7

REGION 3 – Kalimantan

Region 3 assets and operations are located in Kalimantan, and PT Pertamina Hulu Indonesia (PHI) is the operating holding company of Pertamina in Region 3.

Here are the zones in Region 3 and the assets in each zone:

  • Zone 8 – Pertamina Hulu Mahakam (PHM), Pertamina West Ganal (PHWG), East Sepinggan
  • Zone 9 – Pertamina Hulu Sanga Sanga (PHSS), Sangata, Maratua, Tanjung
  • Zone 10 – Pertamina Hulu Kalimantan Timur (PHKT), Bunyu, Tarakan, Nunukan, East Ambalat, Simenggaris, Ambalat, Bukat

Here is the leadership team supervising Pertamina’s exploration and production activities in Region 3.

  • Bayu Giriansyah – VP Exploration
  • Arief Prasetyo Handoyo – VP Development and Drilling
  • Rachmad Wibowo – VP Production
  • Satya Nugraha – VP Business Support
  • Agus Amperianto – General Manager of Zone 8 
  • Andri Haribowo – General manager of Zone 9
  • Raam Krisna – General Manager of Zone 10

REGION 4 – East Java and Eastern Part of Indonesia

Pertamina’s oil and assets located in the eastern part of Indonesia and East Java are under Region 4.

PT Pertamina Eksplorasi dan Produksi Cepu (PEPC) is the operation holding company in charge of Region 4.

Here are the zones in Region 4 and their assets:

  • Zone 11 – Alas Dara Kemuning (PEPC ADK), Cepu, West Madura Offshore (PHE WMO), Randugunting, Sukowati, Poleng, Tuban East Java
  • Zone 12 – Jambaran Tiung Biru (JTB), Banyu Urip
  • Zone 13 – Donggi Matindok, Senoro Tolidi, Makassar Strait
  • Zone 14 – Papua, Salawati, Kepala Burung, Babar Selaru, Semai

Here is the current leadership team of Region 4.

  • Ali Sundja – VP Development and Drilling
  • Muhamad Arifin – VP Operation and Production
  • Fransiono Lazarus – VP Business Support
  • Dedy Syam – General Manager of Zone 11
  • Iman Nur Akbar – General Manager of Zone 13
  • Djudjuwanto General Manager of Zona 14

REGION 5 – International   

Pertamina also has oil and gas interests in several countries outside Indonesia. Its international E&P operations and assets fall under Region 5 and they are under the management of PT Pertamina International Eksplorasi dan Produksi (PIEP).

Here are the zones of Region 5 and their locations:

  • Zone 15 – Algeria
  • Zone 16 – Iraq
  • Zone 17 – Malaysia  

Here is the current leadership team supervising Pertamina’s international exploration and production activities.

  • Fuji Koesumadewi – VP Exploration
  • Yosi Hiroshiadi – VP Development and Drilling 
  • Charles P. Sialagan – VP Operation and Production
  • Ria Noveria – VP Business Support
  • Edwil Suzandi – Country Manager in Algeria

The total daily oil and gas production of Pertamina in 2021 is 897,000 BOEPD according to Budiman Parhusip, CEO of PT Pertamina Hulu Energi.

Here is the breakdown of the oil and gas production in 2021.

The total daily oil production is 445,000 BOPD. This comprises 349,000 BOPD from Indonesia and 96,000 BOPD from operations outside of Indonesia.

Daily total gas production is 2615 MMSCFD. This comprises 2290 MMSCFD from Indonesia and 325 MMSCFD from operations outside of Indonesia. 

Pertamina drilled 12 exploration and 350 development wells in 2021.

This article is adapted by Jamin Djuang – Chief Learning Officer of LDI Training – from information published by Pertamina and various other sources.

Weekly Oil Industry Barometers – 5 March 2021

This has been a very surprising and great week for the oil industry.

The OPEC+ members – Organization of the Petroleum Exporting Countries and their Russia-led allies – held their meeting this week and decided not to increase oil production in April. As a result, oil prices and share prices of all major oil companies soared this week ending on 5 March 2021.

The price of Brent crude oil surged to $69.36 per barrel while the WTI crude oil closed higher also at $66.28 this week.

STOCK PRICES OF MAJOR OIL COMPANIES

All oil major companies saw huge gains in their stock prices this week.

Here are their closing prices and the weekly changes.

CHEVRON – $109.00 up 9%

EXXONMOBIL – $60.93 up 12.1%

CONOCOPHILLIPS – $58.34 up 12.2%

BP – $26.77 up 9.7%

ROYAL DUTCH SHELL – 18.13 EUR up 7.3%

TOTAL – 40.97 EUR up 6.7%

ENI – 10.06 EUR up 6.1%

RIG COUNTS

The weekly US rig count increased to 403. The oil companies in the US added one rig last week, according to Baker Hughes Rig Counts.

The total global rig count continues its monthly gain. It increased by 87 rigs in the month of February 2021 to 1270. The total global rig count in January was 1183. 

This weekly report is adapted by LDI Training from various sources of information.

March 6, 2021

Oil and Gas Activities in Indonesia in 2020

The upstream oil and gas industry of Indonesia invested 10.21 billion US dollars and performed well in 2020 according to SKK Migas, the special task force in charge of upstream oil and gas activities of oil companies in Indonesia.

The oil and gas industry of Indonesia successfully met and even exceeded some of the 2020 targets that were set by the Indonesian government in the following key areas:

  1. Reserve Replacement ratio (RRR).
  2. Oil lifting
  3. Controlling the cost recovery
  4. Revenue intake by the government
  5. Completion of oil and gas projects

RESERVE REPLACEMENT RATIO

The reserve replacement ratio in 2020 is 101.6%. The oil industry added 705 MMBOE of reserve in 2020.  

OIL AND GAS PRODUCTION

The average daily oil lifting in 2020 is 706,000 BOPD. This exceeded the government target of 705,000 BOPD.

However, daily gas production in 2020 is 5461 MMSCFD. This is below the government target of 5556 MMSCFD.

COST RECOVERY

The amount of cost recovery in 2020 is US$ 8.12 billion which is in line with the government expectations.

OIL REVENUE TO GOVERNMENT

The oil industry contributed US$ 8.4 billion of revenues to the Indonesian government. This amount is 41% higher than the expected amount of US$5.86 billion.

COMPLETION OF EXPLORATION AND PRODUCTION PROJECTS

Fifteen oil and gas projects went on stream in 2020. These new projects added 9182 barrels of oil per day and 111 million SCF of gas per day.

3199 Km of 2D seismic and 1251 Km2 of 3D seismic surveys were completed in 2020.

SKK Migas was active and running in 2020 to keep the oil and gas exploration and production activities at a high level. Here are some of the key actions that SKK Migas undertook in 2020: 

  • SKK Migas signed twenty-four PSC side letters and sixty-one letters of agreement (LoA).
  • The government reduced the prices of gas sold to domestic companies to stimulate economic growth.
  • Allowing oil and gas operators to delay topping up the Abandonment and Site Restoration fund.
  • Eliminating the costs to oil operators of using government assets in their exploration and production activities.
  • Allowing oil companies to accelerate asset appreciation.
  • SKK Migas and Chevron Pacific Indonesia signed the Heads of Agreement to ensure the continuity of a high level of activities such as well drilling and production optimization in the Rokan Block during the final phase of the PSC contract. Chevron will hand over the operatorship of The Rokan block to Pertamina when its production sharing contract expires in August 2021.
  • SKK Migas approved the Plan of Development (POD) submitted by Repsol for the development of the huge Kaliberau gas field having 445 billion SCF of gas reserve in the Sakakemang block. The total investment in this project is estimated at 359 million US dollars.

PERFORMANCE OF THE OIL AND GAS OPERATORS IN 2020

Here are the top nine oil and gas operators who exceeded their oil production targets in 2020.

  • Chevron Pacific Indonesia
  • Pertamina Hulu Mahakam
  • Pertamina Hulu Energi ONWJ  
  • Pertamina Hulu Energi OSES
  • Petrochina International Jabung
  • Medco E & P Natuna
  • Pertamina Hulu Sanga Sanga
  • Medco E&P Rimau
  • JOB Pertamina – Medco Tomori Sulawesi

Here are the top nine oil and gas operators who exceeded their gas production targets in 2020.

  • BP Berau
  • Pertamina Hulu Mahakam
  • Eni Muara Bakau BV
  • JOB Pertamina – Medco Tomori Sulawesi
  • Premier Oil Indonesia
  • Petrochina International Jabung
  • Medco E & P Natuna
  • Kangean Energi Indonesia
  • Pearl Oil (Sebuku)

EXPLORATION AND PRODUCTION TARGETS FOR 2021

Being optimistic that Indonesia will meet the target of 1 million BOPD and 12 BSCFD of gas by 2030, SKK Migas is committed to keeping oil and gas production high in 2021. Here are its ambitious targets for oil and gas activities in 2021:

  • Daily oil production – 705,000 BOPD. This is the same target as in 2020.
  • The number of exploration wells – 43. This is a significant increase from 28, the actual number of exploration wells drilled in 2020.
  • The number of development wells – 616. This target is much higher compared with the 240 development wells drilled in 2020.
  • Number of workovers – 615
  • Number of well services – 26,431
  • 2-D seismic survey – 3569 Km
  • 3-D seismic survey – 1549 Km2

The Indonesian oil industry performed well in 2020. Mr. Dwi Soetjipto, the head of SKK Migas said: “The year 2020 was a difficult year for many oil operators due to the Covid 19 pandemic and the low oil prices. Nevertheless, the oil industry of Indonesia was able to meet several targets set by the government. Hopefully, this will help the country’s economy.”

This blog article is adapted from “Kinerja Hulu Migas Gemilang Sepanjang 2020” published by SKK Migas on 4 January 2021.

This article is adapted from SKK Migas news by Jamin Djuang – Chief Learning Officer of LDI Training.

Top Geothermal Plants in Indonesia

Geothermal wells at Muara Laboh

Indonesia is the second-largest geothermal energy producer in the world after the USA. The total installed power generating capacity from the active 16 geothermal power plants in Indonesia is 2356 MW as of December 2022.

Indonesia is the biggest contributor to the increase of installed geothermal power in the world in 2021.

Indonesia added a total of 133 MW of capacity in 2021: 45 MW from Unit II Sorik Marapi Geothermal Power Plant on 28 July 2021 and 98.4 MW from the Rantau Dedap Power plant on 26 December 2021.

The country added a total of 80 MW of geothermal power in in 2022.

Located right on the long stretch of the ring of fire, Indonesian islands are endowed with rich geothermal resources. The total potential geothermal resources of Indonesia are estimated at 28,000 MW.

Although the geothermal potential is huge, its utilization rate is under 8%.

Here are the top ten largest geothermal plants in Indonesia in 2022.

The Kamojang Geothermal Plant

Operating since 1982, the 235 MW Kamojang plant is the first geothermal power plant in Indonesia. Located in the Garut area in West Java, it has been operating for 38 years.

The Dutch spotted the Kamojang geothermal potential more than one hundred years ago and drilled several wells in the area. In 1926 it successfully drilled the first steam-producing well in Kamojang, also the first in Indonesia.  

Later in I971, Pertamina Geothermal Energy (PGE) with cooperation from New Zealand began to develop the field followed by the construction of the Kamojang power plant, the first geothermal power plant in Indonesia.

The plant is operated by Pertamina Geothermal Energi.

The Salak Geothermal Power Plant

Producing 377 MW of power, the Salak plant is the largest geothermal power plant in Indonesia and is also one of the largest in the world.

Located at Gunung Salak in West Java, the Salak plant has been operating since 1994.

The Salak geothermal resources were initially explored and developed by Unocal. In 2005, the Salak geothermal assets were taken over by Chevron who eventually sold it to Star Energy in 2017. 

The Darajat Geothermal Plant

The 270 MW Darajat geothermal plant, located at Garut in West Java, started its commercial operation in 1994 and is one of the oldest geothermal power plants in Indonesia.

The Darajat geothermal assets were initially explored and developed by Amoseas. The assets were later taken over by Chevron who eventually sold it to a consortium led by Star Energy in 2017.

The Darajat resource has two special characteristics. First, it is one of only a few dry steam fields in the world.

Secondly, the Darajat wells are highly productive. While the worldwide average capacity of a geothermal well is 5 to 10 MW, a Darajat well can produce 40 MW of power.

The Sarulla Geothermal Plant

The Sarulla geothermal power plant, with 330 MW capacity, is the second-largest geothermal plant in Indonesia and is also one of the largest geothermal plants in the world.

The Sarulla geothermal resources, located in North Sumatra, were initially discovered by Unocal. Unocal conducted extensive exploration in the Sarulla geothermal working area from 1993 to 1998. It drilled a total of 13 deep wells and proved the existence of 330 MW of commercial geothermal reserves for 30 years.

However, due to the Asian financial crisis in 1997, the Unocal proposed power plant was not constructed until after the project was taken over by Sarulla Operation Limited (SOL).

Sarulla Operation Limited completed the power plant in 2016. The company is a consortium consisting of Medco Power Indonesia, Pertamina Geothermal Energy, INPEX, Ormat International, Itochu Corporation, and Kyushu Electric Power.  

The Sorik Marapi Geothermal Plant

The Sorik Marapi geothermal power plant located in Mandailing Natal in North Sumatra has a total installed capacity of 140 MW. as of October 6, 2022.

The Sorik Marapi geothermal plant was developed by ORKA Energy and operated by PT Sorik Marapi Geothermal Power.

The Sorik Marapi 45 MW Unit 1 power station came online in 2019. It was completed in a record time of three years, with the first drilling starting in October 2016 and the completion of the power station in October 2019.

The second 45 MW unit was inaugurated on 28 July 2021.

Its newest power station, the 50 MW Sorik Marapi Unit 3 station came online on October 6, 2022.

The company has a target to complete 50 MW Unit 4 and 50 MW Unit 5 power stations in 2023 and 2024 respectively to bring up its total eventual power generation capacity to 240 MW.

The Muara Laboh Geothermal Plant

Completed in 2019, the 85 MW Muara Laboh geothermal plant is the newest plant among the ten largest geothermal power plants in Indonesia.

The Muara Laboh geothermal plant is located in West Sumatra and is operated by Supreme Energy Muara Laboh (SEML).

It took the company 12 years to complete the geothermal project at 587 million US dollars.

The operator of the project, PT Supreme Energy Muara Laboh (SEML), is a consortium consisting of PT Supreme Energy, ENGIE, and Sumitomo Corporation.

Having proven reserves of 200MW, the company is in negotiation with PLN, the national power company, to build a second power generation unit.

The Ulubelu Geothermal Plant

Operating since 2012 and located at Lampung in Sumatera, the 220 MW Ulubelu geothermal power plant is operated by Pertamina Geothermal Energy.

The combined 220 MW power comes from the four 55 MW power generation units.

The Lahendong Geothermal Plant

The 120 MW Lahendong geothermal plant is located in Tomohon in North Sulawesi. The Lahendong plant started to operate commercially in 2001 and Pertamina Geothermal Energy (PGE) is the operator.

Its combined 120 MW power is generated from its six 20 MW power generation units.

The Wayang Windu Geothermal Plant

Located in the Bandung area in West Java, the 227 MW Wayang Windu geothermal plant began its commercial operation in 1999.

Star Energy operates the Wayang Windu geothermal assets under a joint cooperation contract with Pertamina Geothermal Energi.

The Dieng Geothermal Plant

The 60 MW Dieng geothermal power plant started to operate in 1998. The Dieng plant is located in the Dieng area in Central Java and is operated by Geo Dipa Energi.

Geo Dipa Energi is currently working on the following projects in the Dieng work area:

  1. Adding a small 10 MW power plant.
  2. Developing a 55 MW Dieng-2 power plant (PLTP Dieng Unit 2)
  3. Developing a 55 MW Dieng-3 power plant (PLTP Dieng Unit 3)

The Patuha Geothermal Plant

The 55 MW Patuha geothermal plant located at the Ciwidey area in West Java has been in operation since 2014.

Geo Dipa Energi as the operator is committed to drilling 12 new wells beginning in 2021 and constructing a second 55 MW power plant. Its long-term plan is to increase the Patuha power generation capacity to 400 MW.

The Lumut Balai Geothermal Plant

The 55 MW Unit 1 station of the Lumut Balai geothermal plant, located at Muara Enim in South Sumatra, started to operate commercially in 2019.

Pertamina Geothermal Energy as the operator of the Lumut Balai geothermal work area aiming to bring the total capacity of the power plant to 220 MW has started the project to build a second 55 MW power station.

Pertamina Geothermal Energy has awarded the Engineering, Procurement, Construction, and Commissioning (EPCC) contract to the Mitsubishi Corporation Consortium to construct the 55-MW Lumut Balai Unit 2 Geothermal Power Plant and the corresponding Fluid Collection and Reinjection System.

The Rantau Dedap Geothermal Plant

The Rantau Dedap geothermal power plant, located in South Sumatra, is the latest geothermal power plant that came online in Indonesia in 2021. Currently, it consists of two power stations, Unit 1 and Unit 2 having a total installed capacity of 98.5 MW.

The power plant is operated by PT Supreme Energy Rantau Dedap (SERD), a consortium consisting of Supreme Energy, Marubeni, ENGIE, and Tohoku Electric Company.

Here are the timelines for the Rantau Dedap geothermal project:

2010 – The concession for the Rantau Dedap was awarded to Supreme Energy.

2011 – Geoscientific exploration began.

2014 – Exploration drilling began.

2015 – A total of 6 exploration wells were completed by 2015.

2016 – The company confirmed the 92 MW of proven reserve capacity.

2018 – Power plant construction began.

2021 – Completed the Unit 1 and Unit 2 power stations.  

The 49.25 MW Unit 1 station was successfully synchronized to PLN’s power grid on 5 October 2021. PLN – Perusahaan Listrik Negara – is the national electricity company of Indonesia.

The Rantau Dedap Unit 2 station began its commercial operation on 26 December 2021.

PT Supreme Energy Rantau Dedap plans to further develop the geothermal potential in the Rantau Dedap geothermal work area with a total development target of 240 MW.

Geothermal is Rising in Indonesia

Sixteen geothermal power plants are operating in Indonesia currently. The list of the top largest power plants in Indonesia will likely change in 2023 as several new power plants will be completed in near future.

The Indonesian government is very keen to develop its vast geothermal resources to increase the contribution of renewable energy in its energy mix. Its targets are to increase the geothermal power generation capacity to 7500 MW by 2025 and 9300 MW by 2035.

To meet these targets, the government will provide funds to help companies in their exploration drillings, provide tax holidays, and remove certain taxes.

With a total of 265 potential sites for geothermal plants located across the country, the utilization of geothermal resources should continue to increase long into the future in Indonesia.

Written by Jamin Djuang – Chief Learning Officer of LDI Training and author of The Story of Oil and Gas: How Oil and Gas Are Explored, Drilled, and Produced

The Amazing Rise of Medco Energi

The Belanak FPSO

This year, Medco Energi is celebrating its forty years of continuing successes and presence as one of the leading energy companies in Indonesia and South East Asia.

Medco Energi International became a public company in 1994, and today it operates in eight countries.

It has interests in oil and gas exploration and production, geothermal power generation, gas distribution and trading, and mining.

The Beginning of Medco

Medco Energi has come a long way in a short time since it started as an oil drilling service company in 1980, Meta Epsi Pribumi Drilling Company (MEDCO).

Founded by Mr. Arifin Panigoro, Medco Energi was a visionary and a trailblazer ever since its beginning.

The Acquisition of Stanvac Indonesia

The first breaks that made Medco became big and successful were the acquisition of Stanvac’s oil and gas assets in South Sumatera in 1995, and the following discovery of the big oil fields in Kaji and Semoga in the Rimau Block, in South Sumatera.

Stanvac Indonesia, set up by Standard Oil of New Jersey in 1912, was one of the oldest and biggest oil companies in Indonesia during the Dutch colonial era.  

The Acquisition of ConocoPhillip’s Interest in West Natuna Sea Block B PSC

The Acquisition of ConocoPhillip’s Interest in West Natuna Sea Block B

Medco Energi further expanded in 2016 when it purchased ConocoPhillips’s 40% interest in the West Natuna Sea Block B and took over the operatorship of the block.

This acquisition added substantial gas and liquids reserves and increased Medco Energi’s daily production by over 35%.

The block is in approximately 300 feet of water and had 11 offshore platforms, four producing subsea fields, and one FPSO – the Belanak FPSO – in addition to two dedicated floating storage and offloading vessels.

The Belanak FPSO was described as one of the most complex FPSO in the world. It was the first offshore liquefied petroleum gas (LPG) facility on a floating vessel in the Asia Pacific region when it was commissioned in 2004.

The fields include the Belanak field, South Belut field, Hiu field, Kerisi field, North Belut field and Bawal field.

The produced natural gas is sold to Singapore and Malaysia through a 654 KM long 28 inch gas pipeline.

Medco Energi also assumed the operatorship of the Onshore Receiving Facility in Singapore following the acquisition.

Acquisition of Ophir Energy

Medco Energi Internasional continued to expand by acquiring Ophir Energy, a London-based independent in 2019.

The acquisition of Ophir Energy increased Medco Energi’s daily oil and gas production by 29% to 110,000 BOE per day.

By taking over the operatorship of Ophir Energy’s offshore Bualuang field in Thailand, Medco Energi became a leading regional oil and gas player in South East Asia.

Acquisition of Corridor PSC and Transasia Pipeline

On March 3, 2022, Medco Energi acquired the entire remaining assets of ConocoPhillips in Indonesia..

Through this acquisition, Medco Energi is now the operator of the Corridor block with 54% interest and has 35% ownership of Transasia Pipeline Company.

The Corridor PSC has two producing oil fields and seven producing gas fields located onshore South Sumatra, Indonesia, adjacent to MedcoEnergi’s existing operations in South Sumatra. The Corridor is the second-largest gas-producing block in Indonesia.

Through Transasia, MedcoEnergi now owns a minority interest in the gas pipeline network supplying Central Sumatera, Batam, and Singapore customers.

Epilogue

With this latest acquisition, Medco Energi is now one of the largest oil and gas operators in Indonesia.

Besides acquiring producing assets, Medco Energi is also active in exploring new oil and gas reserves.

Its 2020 exploration drilling campaign in the South Natuna Sea Block B was 100% successful. It tested hydrocarbon in all the four exploration wells it drilled. The wells are Bronang-2, Kaci-2, Terubuk-5, and West Belut-1.

Medco Energi is planning to develop these fields.

As Medco Energi celebrates its more than 40 years of progress, with its solid management team, it certainly will continue to march toward an even brighter future.

Top Management Team of Medco Energi

Here is the top management team of Medco Energi.

Muhammad Lutfi – President Commissioner

Hilmi Panigoro – President Director

Roberto Lorato – Chief Executive Officer

Anthony R Mathias – Chief Financial Officer

Ronald Gunawan – Chief Operating Officer

Amri Siahaan – Chief Human Capital and Business Support Officer

Myrta Sri Utami – VP Corporate Planning & IR

Siendy K Wisandana – Head of Legal Counsel and Secretary

As a final note, Dr. Arifin Panigoro, the man who started it all and the founder of Medco group of companies died on 27 February 2022 at age of 76.

Written by Jamin Djuang – Chief Learning Officer of LDI Training and author of the published book The Story of Oil and Gas: How Oil and Gas are Explored, Drilled and Produced.

The Old Dutch Oil Companies in Indonesia

The Balikpapan Refinery – Photo courtesy of Tropenmuseum

Since the early 1900s, with oil discoveries in Sumatera in 1885, Java in 1887, and Kalimantan in 1891, Indonesia has been recognized as an important oil-producing country outside America.

By 1900 there were already 18 oil companies operating in Indonesia. It is interesting to note that only companies registered in Nederland and managed by the Dutch could operate in Indonesia at that time.  The reason for this was up until World War II, Indonesia was under the administration of the Netherlands East Indies (NEI).

These old Dutch oil companies played important roles in putting Indonesia on the world map as a significant producer of crude oil and fuels. They discovered and developed many oilfields in Indonesia, and even built refineries in Sumatera, Java, and Borneo. By 1938, oil production had reached 140,000 barrels per day.

Oil well drilling in Pangkalan Susu, Sumatera, in 1916 by KNPM.

By 1945, the year when Indonesia declared its independence, due to acquisitions and mergers, the number of oil companies had reduced to just four: BPM (Bataafsche Petroleum Maatschappij), NIAM (Nederlands Indische Aardolie Maatschappij), STANVAC, and CALTEX.

Stanvac and Caltex which were owned by their American parent companies started as Dutch-registered companies.

After 1965, when Pertamina acquired BPM, all the oil companies with Dutch names no longer existed. Nevertheless, their names appeared in many old and new articles and are often cited in research papers.

Since the names of the old Dutch oil companies in Indonesia consisted of long Dutch words, they were often written in their acronyms.

Here is the glossary of the acronyms of some of the old Dutch oil companies that operated in Indonesia in the past. 

BPM – Bataafsche Petroleum Maatschappij

DPM – Doordsche Petroleum Maatschappij

KNPM – Koninklijke Nederlandsche Petroleum Maatschappij

NIAM – Nederlands Indische Aardolie Maatschappij

SPPM – Sumatera Palembang Petroleum Maatschappij

MEPM – Muara Enim Petroleum Maatschappij

NNGPM – Nederlandsche Nieuw Guinea Petroleum Maatschappij

SVPM – Standard Vacuum Petroleum Maatstchappij

SVTM – Standard Vacuum Tankvaart Maatschappij

NKPM – Nederlandsche Koloniale Petroleum Maatschappij

NPPM – Nederlandsche Pacific Petroleum Maatschappij 

SMOB – Steenkolen Maatschappij Oost Borneo

NIIHM – Nederlandch Indisch Industrie en Handel Maatschappij

If you are interested in the history of oil in Indonesia, please read The Three Big Oil Companies in Indonesia before 1945.  

This article is written by Jamin Djuang – Chief Learning Officer of LDI Training and author of The Story of Oil and Gas: How Oil and Gas Are Explored, Drilled and Produced.

The Three Big Oil Companies in Indonesia before 1945

Sungei Gerong Refinery in South Sumatera in 1926

The first oil exploration in Indonesia started not long after Colonel Drake successfully drilled the first oil discovery well in Pennsylvania in the United States in 1859.

By 1869, Dutch businessmen in Indonesia, known as the Netherlands East Indies at that time, had noticed and recorded 53 oil seepage locations in Sumatera, Java, and Kalimantan.

Then the first oil well drilling in Indonesia took place in 1871 in West Java.

However, commercial discoveries were made only several years later when a Dutch businessman drilled successful exploration wells in Pangkalan Brandan in North Sumatera in 1885 and Sanga-Sanga in East Kalimantan in 1892.

These two discoveries caught the attention of the world and put Indonesia on the map as one of the countries with interesting oil potentials.

By 1900 there were already 18 oil companies searching for oil in the Netherlands East Indies (NEI). All these companies were either Dutch companies or non-Dutch companies registered in Nederland. The high level of activities resulted in significant oil discoveries in the early 1900s.

Following the oil discoveries, refineries were built in Pangkalan Brandan in North Sumatera in 1892, Sungei Gerong in South Sumatera in 1926, Balikpapan in East Kalimantan in 1922. By 1940, there were already seven refineries in NEI: three in Sumatera, three in Java, and one in Kalimantan.

In 1938, the daily crude oil production was about 140,000 BOPD and in 1953 it was about 190,000 BOPD.

The high level of oil production and refining activities from 1900 to 1940 made Indonesia well-known as one of the world’s significant crude oil producers and refined product suppliers at that time. In fact, Indonesia was so well-known for its oil it became involved in World War II.

Recognized as a significant oil producer, Indonesia was invited to become a member of OPEC 1962.

The three oil companies that produced about 90% of all the petroleum in Indonesia during the Dutch colonial period are:

  • BPM – Bataafsche Petroleum Maatschappij
  • STANVAC – Standard Vacuum Oil Company
  • CALTEX

Here are the amazing stories of these three big oil companies operating in Indonesia before 1945.


BPM

BPM is Bataafsche Petroleum Maatschappij, also called the Batavian Oil Company. Batavia, which is Jakarta today, was the center of the NEI government.

BPM was established in 1907 by KNPM (Koninklijke Nederlandsche Petroleum Maatschappij) also known as Royal Dutch Petroleum Company and Shell Trading and Transport Company to explore and produce oil in the Netherlands East Indies.

Royal Dutch Petroleum Company owned 60% and Shell owned 40% of BPM.

Before BPM was set up, there were already as many as 18 oil companies operating in the Netherlands East Indies (NEI) from North Sumatera, Java, Borneo, and all the way to Papua.

BPM quickly took over almost all of these companies and dominated the oil industry in Indonesia. By 1920, it had controlled more than 95% of crude oil production in Indonesia.

In 1921, as the government of the Netherlands East Indies wanted to take part in the booming oil business in Indonesia, NEI and BPM formed another company called NIAM (Nederlands Indische Aardolie Maatschappij).

Many big changes took place in the oil industry after Indonesia declared its independence in 1945. The first big change was the takeover by the government of Indonesia the NEI’s 50% ownership in NIAM.

This marked the beginning of an Indonesian government-owned oil company. It also started a working relationship between BPM and the government of Indonesia. With this relationship, BPM managed to extend its activities in Indonesia until 1965.

In 1965, BPM sold all its assets in Indonesia to the Indonesian state-owned company PN Permina for US$110 Million. Permina later became Pertamina.

BPM operations in Indonesia were extensive. They stretched from the western part of Indonesia to the eastern part of Indonesia.

Here are the operations of BPM in various parts of Indonesia.

BPM In Borneo

In 1907, right after it was formed, BPM acquired the oil fields and refinery in Balikpapan from Mathilda company. It also acquired the oil fields in Sanga Sanga and Tarakan which had been discovered previously by KNPM (Koninklijke Nederlandsche Petroleum Maatschappij).

BPM expanded its exploration and production aggressively in East Borneo and continued to discover several other fields in these areas.

On the small island of Tarakan, BPM drilled 700 oil wells and built a refinery.

Production continued to increase and in the 1920s the Tarakan wells produced about 18,000 BOPD, a third of the total oil production in the whole Dutch East Indies.

BPM in North Sumatera

BPM acquired from KNPM the oil fields and the refinery located at Pangkalan Brandan. BPM also took over the operations of the oil tanking and the oil export facilities at Pangkalan Susu. Pangkalan Susu was the first oil-exporting port in Indonesia.

BPM in Java

In Java, BPM acquired the oil assets of DPM (Doordsche Petroleum Maatschappij), a Dutch oil company established by Adriaan Stoop in 1887.

DPM had discovered and operated the Kruka Field and the Djabakota Field near Surabaya in East Java. DPM also had built the oil refinery in Wonokromo. Completed in 1893, this was the first oil refinery in Indonesia.

By acquiring DPM, BPM also became the owner of some thirty oil fields in East Java including another refinery located in Cepu which was built in 1894.

BPM In South Sumatera

In South Sumatera, BPM took over SPPM (Sumatera Palembang Petroleum Maatschappij). SPPM had been operating the oil fields in its concessions in Banyuasin and Jambi.

BPM also acquired the oil assets of MEPM (Muara Enim Petroleum Maatschappij). MEPM had discovered the Muara Enim field and built the Plaju Refinery.

BPM In Irian Jaya

In 1935 BPM expanded its search for oil into Irian Jaya. For this venture, along with other partners, BPM formed a joint venture company named NNGPM (Nederlandsche Nieuw Guinea Petroleum Maatschappij) with exploration rights for 25 years.

By 1938 they had discovered the Klamono oil field. followed by Wasian, Mogoi, and Sele fields.

However, for commercial reasons, these fields were not developed.

STANVAC

STANVAC – Standard Vacuum Oil Company – started as NKPM (Nederlandsche Koloniale Petroleum Maatschappij) in 1912. NKPM was set up in Nederland by the American company Standard Oil of New Jersey so it could explore for oil in Indonesia.

Since Indonesia was under the control of the Netherlands East Indies at that time, Jersey Standards had to set up NKPM as a Dutch-registered and Dutch-managed company with headquarters located in The Hague.

NKPM began to make exploration in Java and South Sumatera in 1914.

It was in South Sumatera NKPM found its liquid gold. Operating from the city of Palembang, it discovered the Petak field in 1914, the Trembule field, and the huge Talang Akar field in 1921. These discoveries prompted NKPM to construct the famous Sungai Gerong oil refinery.

In 1922 NKPM changed its name to SVPM (Standard-Vacuum Petroleum Maatschappij).

It also constructed the 130 Km long pipeline from Pendopo area to Sungai Gerong to bring the crude oil from the prolific Talang Akar field to the refinery.

The Sungai Gerong refinery began operating in 1926 and became the largest and important oil refinery in South East Asia.

It was so important that the refinery was occupied by Japanese forces from 1942 to 1945 during World War II.

To meet the increasing demands for petroleum products in Africa and the Asia Pacific, Standard Oil Company of New Jersey and SOCONY (Standard Oil Company of New York) jointly created STANVAC (Standard Vacuum Oil Company) in 1933.

This was a synergistic partnership as Standard Oil Company of New Jersey had the oil production capacity and SONONY had the marketing facility.

The newly created Stanvac in the Netherlands East Indies consisted of three companies: Standard Vacuum Petroleum Maatschappij (SVPM), the Standard Vacuum Sales Company (SVSC), and the Standard Vacuum Tankvaart Maatschappij (SVTM).

Stanvac took over all the assets of SVPM in Indonesia and became a full-fledged oil company involved in oil exploration and production, refining, transportation, and distribution in more than 50 countries.

However, Stanvac continued to operate under its Dutch company name – SVPM – in the NEI.

Stanvac produced oil from many fields in South Sumatera. The notable ones were Talang Akar, Djirak, Benakat, Radja fields.   

In 1934, Stanvac expanded its operations to Central Sumatera.  Here it discovered and developed the well-known Lirik field and later the Binio field.

Things began to change after World War II and the declaration of independence of Indonesia.

It was after the declaration of independence by Indonesia in 1945, to distance itself from its Dutch connection, Stanvac began calling itself  Stanvac Indonesia as its company name to show its American origin.

In so doing, Stanvac was able to keep its assets and continue to operate in the newly independent Indonesia.

In 1960, as Indonesia wanted to have more control of the oil operation and business, it introduced the 1960 Oil Law which stated that all foreign oil companies must operate as a contractor for the Indonesian government.

On 24 September 1963, Stanvac signed the “Contract of Work” agreement with Indonesia’s Pertambangan Minjak Nasional (Permina).

The contract allowed Stanvac to continue to have full control of its oil exploration and production operations in Indonesia. Under this agreement, Stanvac must sell its refinery within ten to fifteen years.

However, Stanvac had to sell its Sungai Gerong refinery to Pertamina in 1969.

Stanvac Indonesia continued to operate its oil fields until finally in 1995 it sold all its assets to Medco Energi for 88 million USD.

While Stanvac was operating in Indonesia, one of its parent companies, Mobil Oil, assumed the Arun block in Aceh in 1968. It went on to discover the super giant Arun gas field in 1971.

Interestingly, the two parent companies of Stanvac, Exxon and Mobil, merged in 1999 to become Exxon Mobil Corporation.

CALTEX

CALTEX was established in 1936 by Standard of California and Texaco to explore and produce oil in Indonesia and to expand its oil business in the Asia Pacific.

Earlier in 1924, The Standard of California had sent its team of geologists to Indonesia.

To operate in the Netherlands East Indies at that time, Caltex must obtain oil concessions from the government of NEI (Nederlands East India) who was the ruler of Indonesia at that time. To do so, in 1930, Caltex established NPPM (Nederlandsche Pacific Petroleum Maatschappij), a Nederland registered company with its headquarters located in The Hague. Also, the company must be run by Dutch nationals.

In the same year, Caltex received its first oil concession in the Rimba area which is now known as the Rokan Block in Central Sumatera.

Soon after that Caltex began to find oil, but it was in 1941 that  Caltex discovered the huge Duri field. Due to the high pour point of its low gravity crude oil, it was necessary to use steam-flood to drive out the oil. Due to the success of the steam flood method, the Duri field became known as one of the largest steam-flood projects in the world. In spite of the huge challenges to produce the field, it has produced more than 2.64 billion barrels of oil so far.

Several years later Caltex went on to discover another giant oil field, The Minas field.

The story of the Minas field discovery is very interesting. In 1940, at the beginning of World War II, Caltex had started the drilling of its exploration well in the Minas area. However, before the drilling was completed, Caltex had to abandon the drilling as the Japanese army was coming to occupy the area and to take over the oil facilities.

The Japanese army engineers resumed the drilling of the well in 1943 and discovered oil when it drilled down to 2600 feet deep.

At the end of the war, Caltex regained control of its oil assets and continued to investigate the Minas field. After drilling several additional wells, Caltex confirmed the discovery of the huge Minas oil field.

Caltex went on to discover many smaller oil fields in its concession area.

By the late 1950s, Caltex became one of the largest oil producers in Indonesia.  At its peak in 1973, Caltex produced about 1 million BOPD from the Duri, the Minas, and about 80 smaller oil fields. Caltex holds the record of having the highest daily crude oil production rate in Indonesia.

Caltex completed the construction of a crude oil export terminal in Dumai in 1958.

Caltex signed a work contract agreement with Indonesia in 1961 giving it the right to continue to operate the Rokan block until 2001. Later on, Caltex managed to obtain a work contract extension to operate the block for another 20 years until 2021.

The two owners of CALTEX, Chevron, and Texaco merged in 2001 to become ChevronTexaco Corporation. Later on, in 2005, ChevronTexaco Corporation dropped the name Texaco and renamed the company as Chevron Corporation.

Following the name change of its parent company, Caltex in Indonesia which was initially incorporated as PT Caltex Pacific Indonesia changed its name to PT Chevron Pacific Indonesia.

By 2008, Chevron Pacific Indonesia had produced 11 billion barrels of crude oil from the extremely prolific Rokan block.

Although the Rokan block has been producing oil for more than 80 years, it still has 2 billion barrels of estimated producible reserves. It is considered as an important block in Indonesia’s ambition to increase the daily oil production in Indonesia to one million barrels by 2030.

Although the name Caltex disappeared in Indonesia after the name change, the Caltex petroleum brand is still alive in many countries in the Asia Pacific.

Epilogue

These three companies of the past were great companies to work for. Since most of their oilfields were located in the middle of a jungle, the companies provided good and well-rounded facilities – schools, clinics, cafeterias, places for worship, sports, and entertainment – to their employees and their families.

Many people and children of those who had worked for these companies have fond and colorful memories of the companies.

To me, the one that is the most interesting is BPM.

The joint venture of Royal Dutch Petroleum Company and Shell Trading and Transport Company that formed BPM – Bataafsche Petroleum Maatschappij – in Indonesia in 1907 sowed the seed that eventually grew into the current giant Shell Oil Company.

Also, BPM had a role in the rise of Pertamina when Pertamina took over all the assets of BPM in 1965.

WRITTEN BY

Jamin Djuang – Chief Learning Officer of LDI Training and author of The Story of Oil and Gas: How Oil and Gas Are Explored, Drilled and Produced


 

Geothermal Drilling by The Government of Indonesia

The Indonesia government will drill geothermal exploration wells in 20 geothermal work areas in Indonesia beginning in 2020 until 2024, according to Ida Nuryatin Finahari, Director of Geothermal in the Ministry of Energy and Mineral Resources.

The purpose of this initiative is to gather information on the geothermal potentials in each work area and to pass this information to potential investors.

The Indonesia government hopes this four year project will stimulate the interests of investors and accelerate the development of geothermal energy in Indonesia.

Here are the twenty geothermal work area where the government of Indonesia will drill exploration wells.

  • Lokop in Aceh
  • Sipoholon Ria Ria in North Sumatera
  • Sajau in North Kalimantan
  • Bora Pulu in Central Sulawesi
  • Marana in Central Sulawesi
  • Bittuang in South Sulawesi
  • Limbong in South Sulawesi
  • Jailolo in North Maluku
  • Banda Baru in Maluku
  • Nage in NTT (Nusa Tenggara Timur)
  • Maritaing in NTT
  • Sembalun in NTB (Nusa Tenggara Barat)
  • Gunung Batur – Kintamani in Bali
  • Guci in Central Java
  • Cisolok Cisukarame in West Java
  • Gunung Galunggung in West Java
  • Gunung Tampomas in West Java
  • Gunung Ciremai in West Java
  • Gunung Papandayan in West Java
  • Gunung Endut in Banten

If you want to understand how your geothermal reservoirs work and how to optimize them, Dr. Roland N. Horne will teach an online Geothermal Reservoir Engineering course on 6-9 October 2020.

The Famous Duri Oil Field

Duri to Dumai Road Construction in 1958

Eighty years ago, CALTEX discovered the huge Duri oil field in the Rokan block in Riau, Sumatera.

Oil was found at a shallow depth of 400 feet when CALTEX began drilling its exploration wells in 1941. However, the exploration drilling was interrupted due to the onset of the World War 2.

After the war ended, CALTEX managed to obtain the approval from the newly formed government of Indonesia to operate in the Rokan block under a work contract scheme. Eventually, oil production from the Duri field began in February 1954.

The giant Duri field – 10 km wide and 18 km long – is one of the many oil fields discovered in the Rokan block. Minas is another giant oil field discovered in this block.

Oil production peaked at 65,000 BOPD in the 1960s.

Due to the high viscosity of the low gravity oil, to enhance the production, the steam injection was introduced in 1985.

The Duri steam flood project was so successful that it became one of the largest and the best steam floods in the world.

Thanks to the successful steam injection, Duri oil production increased significantly to 185,000 BOPD.

After 30 years of the steam flood, the production had declined to about 50,000 BOPD by 2017.

With more than 2.6 billion barrels of cumulative oil produced, the giant Duri field is still producing today.

Chevron handed over the operatorship of the Duri field and the Rokan block to Pertamina in August 2021.

With Pertamina Hulu Rokan as the new operator, the Duri field and the Rokan block are undergoing a massive expansion.

More than 400 wells were drilled in the Rokan block with mostly done in the Duri field in 2022 and the company plans to drill another 500 wells in 2023.

Pertamina built a 17 MWp solar plant in the Duri field in 2022 to meet the electricity need of the field.



Terms Related To Decarbonization

 

pexels-pixabay-259280

To reduce the impacts of climate change due to greenhouse gases, many countries and businesses are moving towards carbon-neutrality.

One of these moves is decarbonization and the other is the use of clean energy such as hydrogen and renewable energy.

Microsoft recently announced its commitment to become carbon negative by 2030. Microsoft also said that it will remove more carbon from the environment than it has ever emitted in the past by 2050

Here are some of the technical terms related to decarbonization and clean energy.

Carbon Footprint

Carbon footprint is the amount of carbon dioxide emissions created by a person or industry.

Carbon Tax

Carbon tax is tax paid by businesses and industries that produce carbon dioxide through their operations.

Carbon Neutrality

Carbon neutrality is a term used to describe the action of organizations, businesses, and individuals taking action to remove as much carbon dioxide from the atmosphere as each put into it.

The overall goal of carbon neutrality is to achieve a zero-carbon footprint. For example, a business may plant trees in different places around the world to offset the electricity the business uses. This practice is often called carbon offset or offsetting.

Carbon Capture and Storage (CCS)

CCS is the process of capturing waste carbon dioxide usually from large sources such as a factory or power plant, transporting it to a storage site, and depositing it where it will not enter the atmosphere, usually a subsurface rock formation.

Currently, there are less than 20 coal plants that use CCS technology to capture the produced carbon dioxide.

Carbon-Neutral Fuels

Carbon-neutral fuel is a fuel that has no net greenhouse gas emissions or carbon footprint. An example is a synthetic fuel produced by hydrogenating the carbon dioxide captured directly from the air.

Carbon Negative Fuels

Carbon negative fuels are fuels that take more carbon out of the environment than it generates.

DAC

Direct air capture is the process of capturing carbon dioxide directly from the air to produce a concentrated stream of CO2 for sequestration or utilization. In terms of utilization, as an example, the CO2 is being used to drive out reservoir oil in many CO2 miscible EOR projects around the world. The captured CO2 can also be used to produce carbon-neutral fuels by hydrogenating it with hydrogen.

Fuel Cells

Fuel cells are devices that convert the chemical energy of a fuel directly into electricity by electrochemical reactions. For example, hydrogen cars use fuel cells to convert the energy stored in the hydrogen into electrical energy for powering the car.

GHG

Greenhouse gases are gases that cause the greenhouse effect on our planet. The most common types of greenhouse gases are CO2, carbon monoxide (CO), methane (CH4), water vapor (H2O), Nitrous oxide (N2O), and ozone (O3).

Hydrogen Economy

The hydrogen economy is a situation where hydrogen is used as the major carrier of energy.  

Renewable Energy

Renewable energy is any naturally occurring, theoretically inexhaustible source of energy, as biomass, solar, wind, tidal, wave, and hydroelectric power, that is not derived from fossil or nuclear fuel.

RNG

Renewable Natural Gas is produced by capturing methane emitted from the breakdown of organic wastes in landfills, wastewater and farms, and processing it into natural gas.

Net Zero Carbon Emission

Net zero carbon emission is a balance achieved when the amount of carbon that we emit is offset by the amount of carbon we remove from the atmosphere.

 

This glossary is curated by Jamin Djuang, a published author of “The Story of Oil and Gas: How Oil and Gas Are Explored, Drilled and Produced” written for readers who have not seen an oil field.

 

The West Seno Oil Field

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From top left clockwise: The tension leg platform of West Seno (TLP-A), a drilling support vessel, and the floating production unit (FPU).

Discovered by Unocal in 1998, the West Seno field, lying in water depths of about 3200 feet, is the first deepwater oil field in Indonesia.

Located in the Strait of Makassar, the West Seno field is about 50 km away from the giant Attaka field and 60 km from the Santan terminal in East Kalimantan.

The oil and gas are produced through a tension leg platform (TLP) which is also the first of its kind in Indonesia.

The floating topside of the tension leg platform is attached to the seafloor by four 3200 feet long tendons having a diameter of 26 inches and a wall thickness of 1.036 inches.

Currently, all the subsea wells are produced from platform TLP-A which can accommodate 28 wells. Unocal originally had planned to build two tension leg platforms.

Oil production from the West Seno wells began in 2003 and currently, they are producing about 1200 BOPD. The fluids from the subsea wells are initially separated into oil and gas on the FPU (Floating Production Unit).

The separated oil and gas are then transmitted via two 12-inch diameter and 60 km long pipelines to the onshore facilities at Santan for final handling and storage.

One of the oil production challenges of West Seno is handling the difficult-to-break emulsions. The emulsions are hard to break due to the presence of certain chemicals in the fluid, the decreasing fluid temperature as it rises to the surface, and the motion of the floating platform.

The West Seno offshore production facilities also handle the production from the nearby Bangka field. Bangka field produces about 1000 barrels of condensate daily and 40 MMSCF of gas per day.

The development of the West Seno field was made possible by having a favorable PSC profit splits of 35 percent instead of the regular 15 percent for shelf developments.

The field is currently operated by Chevron.

History of the Giant Attaka Oilfield

Pres. Soeharto di Santan

Fifty years ago, Union Oil of California (UNOCAL) along with its partner, INPEX, discovered the giant offshore oil field Attaka in East Kalimantan.

General Soeharto, the president of Indonesia at that time, then inaugurated the Attaka field and the Santan terminal on 22 January 1973.

In the early days of Attaka and the Santan terminal, there were many workers from the US and UK. Over time, they were gradually replaced by Indonesian workers.

Unocal operated the oil field for 25 years from its East Kalimantan headquarters located in Balikpapan. The Attaka field was subsequently acquired and operated by Chevron, and then by Pertamina Hulu Kalimantan Timur beginning on 25 October 2018.

At 50 years old, the field is still producing today.

Thousands of oil people – expatriates from many nations and Indonesians from every region – have visited and worked in the offshore facilities and the onshore Santan terminal including me.

I worked in the Attaka field as “Production Foreman” in 1980. I hope you like this snippet of the history of Attaka and the Santan terminal.

If you like to read more about the Attaka field here is The Ten Interesting Facts About Attaka.

WRITTEN BY

Jamin Djuang – Chief Learning Officer of LDI Training and author of The Story of Oil and Gas: How Oil and Gas Are Explored, Drilled and Produced

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The New Seven SUPERMAJOR Oil Companies

The Seven SUPERMAJORS (2)

The Original SEVEN SISTERS

Before there was OPEC, there were the SEVEN SISTERS.

The Seven Sisters, a consortium of seven world’s largest multi-national oil companies, was formed in the 1950s.

Here are the original members of the Seven Sisters:

  1. Anglo-Persian Oil Company (now BP)
  2. Royal Dutch Shell
  3. Gulf Oil (Acquired by Chevron in 1985)
  4. Standard Oil of California (now Chevron)
  5. Standard Oil of New Jersey (now ExxonMobil)
  6. Standard Oil of New York – Socony (later became Mobil Oil and then ExxonMobil)
  7. Texaco (Acquired by Chevron in 2001)

Although the term “The Seven Sisters” was used for the first time in 1951, these seven companies had been dominating the oil industry since the 1940s. The Seven Sisters were so powerful that at one time, they controlled about 85% of the global oil and gas reserves.

Due to company mergers and acquisitions that took place in the oil industry in the last 40 years, the composition of the seven largest oil companies in the world had changed significantly.

The original Seven Sisters consisted of two European and five American oil companies whereas currently, the seven largest international oil companies in the world consist of four European and three American companies.

The New Seven Sisters

Due to mergers and acquisitions, several of the original members of the Seven Sisters no longer existed.

examples, Gulf Oil, Texaco and Standard Oil of California have merged to be known as Chevron, and Standard Oil of New Jersey and Standard Oil of New York merged to become ExxonMobil.

With the mergers and acquisitions the composition of the seven largest international oil companies therefore have changed.

Here are the new seven largest international oil companies in the world which are now commonly referred to as the seven SUPERMAJORS or the new Seven Sisters.

BP (British Petroleum)

British Petroleum is a British oil company that started as Anglo-Persian Oil Company in 1908 as a subsidiary of Burmah Oil Company. BP grew bigger and bigger by acquiring SOHIO (Standard Oil of Ohio) in 1978, then Amoco in 1998 and ARCO (Atlantic Richfield Company) in 2000.

BP operates in 79 countries with 70,000 employees. The London-based company produces 3.8 million BOEPD of oil and gas.

CHEVRON

Chevron began as Standard Oil of California as one of the successors of the original Standard Oil company, the company founded by Mr. John D. Rockefeller after it was broken up into several companies in 1911 under the Sherman Antitrust Act in the US.

Chevron became a huge oil company after acquiring Gulf Oil in 1985, then Texaco in 2001, and Unocal Corporation in 2005.

With headquarters in San Ramon, California, Chevron operates in 180 countries and employs more than 48,000 people. Its daily oil and gas production is about 3.1 million BOEPD.

EXXONMOBIL

ExxonMobil that began as Standard Oil of New Jersey is also another descendant of the original Standard Oil company. Standard Oil of New Jersey changed its name to Exxon in 1972, and later on, Exxon became ExxonMobil after it merged with Mobil Oil in 1999.

Operating in 58 countries, ExxonMobil has about 71,000 employees. It produces about 2.3 million BOE of oil and gas daily. The company is based in Irving, Texas.

ROYAL DUTCH SHELL

The formation of the Royal Dutch Shell group came from the merger of Royal Dutch Petroleum Company of the Netherlands and Shell Transport and Trading Company Limited of the United Kingdom in 1907. The Anglo-Dutch company was formed to compete against the powerful American oil company – The Standard Oil.

The Royal Dutch Petroleum Company, known as Koninklijke Nederlandse Petroleum Maatschappij in Dutch, had its root in Indonesia when it was formed in 1890 to produce the oil it discovered in Pangkalan Brandan in North Sumatera and later on in Balikpapan in East Kalimantan.

Royal Dutch Shell became a big player in LNG when it acquired BG Group in 2016.

From its headquarters in the Netherland, Shell operates in 70 countries and has 81,000 employees. The company’s daily oil and gas production is about 3.7 BOE.

TOTAL S.A.

Total, a French supermajor oil company, started in 1924 as Compagnie Française des Pétroles ( CFP). It later changed its name to Total CFP in 1985 and finally to Total in 1991.

The company grew even bigger after it acquired the Petrofina of Belgium in 1999 and then ELF Aquitaine in 2000.

Based in France, Total has operations in 130 countries and it employs more than 100,000 employees. It produces 3 million BOEPD of oil and gas.

ConocoPhillips

ConocoPhillips started as Conoco 1875 in the US. Conoco merged with Phillips Petroleum Company to form ConocoPhillips in 2002.

Based in Houston, ConocoPhillips involving only in the upstream part of the oil industry is the world’s largest independent oil company. With about 10,400 employees, its daily oil and gas production in 17 countries is around 1.3 million BOE.

ENI (Ente Nazionale Indrocarburi)

ENI, a supermajor oil company from Italy was formed in 1953, and then it acquired AGIP, another Italian oil company, in 2003.

From its headquarters in Rome, ENI operates in 79 countries. The company employs more than 30 thousand employees, and it produces a combined 1.7 million BOE of oil and gas daily.

Top Oil Producing Countries in 2021

The average daily total global oil production in 2021 is around 77 million barrels, 71% of which came from ten largest oil producing countries.
Here are the ten biggest oil producing countries in the world. The term BOPD refers to the number of barrels of petroleum liquid per day.
1. United States – 18.9 million BOPD
2. Saudi Arabia – 10.8 million BOPD
3. Russia – 10.8 million BOPD
4. Canada – 5.6 million BOPD
5. China – 5.0 million BOPD
6. Iraq – 4.1 million BOPD
7. United Arab Emirates – 3.8 million BOPD
8. Brazil – 3.7 million BOPD
9. Iran – 3.5 million BOPD
10. Kuwait – 2.7 million BOPD

WRITTEN BY

Jamin Djuang – Chief Learning Officer of LDI Training and author of The Story of Oil and Gas: How Oil and Gas Are Explored, Drilled and Produced

How Are LPG and LNG Different?

Spherical tanks - shutterstock_674277817
Spherical tanks

LPG and LNG are by-products of petroleum and they are increasingly used for fuel as countries are increasingly concerned about their environment.

So what are LPG and LNG, and how are they different?

LPG – Liquefied Petroleum Gas

LPG is liquefied petroleum gas which consists mainly of propane and butane.

LPG is commonly used as fuel in heating appliances, cooking equipment, and vehicles. It is also increasingly used as an aerosol propellant and refrigerant, replacing chlorofluorocarbons to reduce damage to the ozone layer.

As a clean fuel, LPG is also increasingly used to power cars and buses. For this application, LPG is referred to as autogas or CNG (compressed natural gas).

At the normal condition, 15 degrees C and 14.7 PSI, the mixture of propane and butane is in the gaseous state. However, when its pressure is increased to above 120 PSI, the gaseous mixture turns into liquid. The liquefaction of the LPG makes it easier to store and transport.

In the liquid state, the volume of the mixture is only 1/270th of its volume in gaseous form. So, when LPG is released to the atmosphere, it will expand 270 times as it turns into vapor.

LPG is produced by extracting the propane and butane from the gas and condensate produced from oil reservoirs and gas reservoirs. This extraction process usually takes place in a gas processing plant located at an oil or gas field.

LPG is also produced from crude oil as one of the distillates from the refining process in a refinery.

LNG – Liquefied Natural Gas

LNG is liquefied natural gas. In remote places where a large quantity of natural gas is discovered and no gas pipeline is available, the produced natural gas is often turned into a liquid allowing it to be transported in bulk by LNG carriers. At its destination, the LNG is offloaded from the tanker and stored in insulated tanks. The LNG will be processed back into a gas, and the gas will be put into the pipeline for further distribution.

To produce LNG, natural gas consisting mainly of methane is super-cooled to -162 degrees C to turn it into a liquid. This decreases the gas volume 600 times making it easier to store and transport. It also plays a very important and useful role in meeting peak demands for gas, which the normal pipeline infrastructure cannot do. LNG is finding many new applications, and its demand is increasing. According to a Shell report, the global demand for LNG is expected to increase 4 to 5 % per year until 2030 while the demand for natural gas will increase at 2% per year.

In places where demand for natural gas cannot be met locally, the use of FSRU is gaining popularity. FSRU is a floating, storage and regasification unit. An FSRU can be constructed and installed quite quickly and economically to receive LNG from an LNG carrier and deliver the gas to the end-users as needed.

In summary, LPG and LNG have similarities and differences.

Similarities of LPG and LNG
  1. Both LPG and LNG are by-products of crude oil and natural gas.
  2. They are both in liquefied form making them easier for storage and transportation.
  3. They are commonly used as fuel.
  4. They are considered as clean fuel as they leave no smoke or soot.
Differences between LPG and LNG
  1. LPG consists mainly of propane and butane whereas LNG consists mainly of methane.
  2. LPG has a much higher heating value than LNG, and therefore it is also used to power cars and even buses.
  3. LPG is liquefied by increasing its pressure whereas LNG is liquefied by lowering its temperature.
  4. LPG is usually distributed to consumers in pressurized cylinders whereas LNG is gasified before it is transmitted to end-users by pipelines.
  5. Finally, as their names imply, petroleum – the crude oil, condensate, and natural gas – is the source of the propane and the butane contained in the LPG, whereas natural gas is the main source of the methane contained in the LNG.

The article is written by Jamin Djuang, the author of The Story Of Oil and Gas: How Oil and Gas are Explored, Drilled and Produced.

 

The First Oil Discoveries in Indonesia

Mathilda B-1 – The first oil discovery well located in Balikpapan, East Kalimantan. Photo courtesy of Chaz Tumbelaka,

In North America, the first oil well was drilled in 1858 by James Miller Williams in Oil Springs, Ontario, Canada.

In the United States, the petroleum industry began in 1859 when Edwin Drake found oil near Titusville, Pennsylvania.

How about in Indonesia?

Indonesia also has a very interesting history of early oil drilling, and it was not too far behind North America in finding its first oil wells in the 19th century.

In Indonesia, Dutch officials noted there were 53 oil seepage locations across Indonesia in 1869. The first oil well drilling in Indonesia began in 1871 in West Java. Several years later, oil was discovered in Pangkalan Brandan in Sumatera in 1885 and Sanga-Sanga in East Kalimantan in 1892.

The First Oil Discovery in Java

“Knowledge of oil on Java and Sumatra was reported as early as the year 954 and in 1596 a Dutch voyage reported a well in Sumatra producing a balm used for treating rheumatism and for lighting purposes (Van Bemmelen, 1949).”

“In 1869, Von Baumhauer recorded 44 oil seeps in Java, drilling for oil started in West Java in 1872 and the first oil company started operations in East Java in 1887 (Van Bemmelen, 1949).”

“Early exploration wells in West Java onshore were drilled by Jon Reesink who was a storekeeper in Cirebon (Courteney and others, 1989).  He visited the United States, collected drilling equipment and skills, and began drilling at Cibodas in 1871 with the financial backing of Nederlandsche Handel Maatschappij (the predecessor of Royal Dutch Shell) (Courteney and others, 1989).”

“Sub-commercial oil was found in two of his first four wells, which were drilled using water buffalo for power.  He resumed drilling in 1874 with steam equipment, but the next 5 wells were unsuccessful, which discouraged his backers.  However, other drilling ventures were conducted with encouraging shows, and the first commercial oil field was discovered at Randegan in 1939 (Courteney and others, 1989).”

The First Oil Discovery in Sumatera

In 1883, tobacco planter A.J. Zijkler obtained the first petroleum exploration rights in North West Sumatera from the Sultan of Langkat. He then discovered the first commercial oil well in Indonesia in 1885.

The discovery well – Telaga Tunggal 1 – was discovered in Langkat near Pangkalan Brandan. Oil was found at a depth of 121 meters and the field produced more than 7 million barrels of crude oil for more than 50 years.

The First Oil Discovery In Kalimantan

Oil was discovered in Balikpapan, Kalimantan in 1897 when Jacobus Hubertus Menten, a Dutch mining engineer observed oil seepages in the area.

With the help from Sir Marcus Samuel from Shell Transport and Trading Ltd, they drilled the famous Well Mathilda B-1 on 10 February 1897. The well was drilled to 222 Meter and it flowed initially at 184 barrels per day. This oil discovery in Balikpapan took place 38 years after Sir Edwin Drake drilled the world’s first oil well in America.

With the discovery, Jacobus Hubertus Menten and Sir Marcus Samuel formed Nederlandsch Indisch Industrie en Handel Maatschappij (NIIHM), and it continued to discover other oil fields away from Balikpapan. 10 February 1897 is considered the birth date of Balikpapan.

This article consists of excerpts from the article “Petroleum Systems of the Northwest Java Province, Java, and Offshore Southeast Sumatra, Indonesia” written by Michelle Bishop published by USGS in 2000 and information from several other sources.

The article is written by Jamin Djuang, the author of The Story Of Oil and Gas: How Oil and Gas are Explored, Drilled and Produced.

 

 

Eight Largest Oil Lifting Terminals in Indonesia

oil storage tanks
Oil Storage Tanks

In 2019, the average daily crude oil production in Indonesia was 746,000 barrels.

Here are the eight largest crude oil lifting terminals in Indonesia in 2019 according to SKK Migas of Indonesia.

  1. WIDURI MARINE TERMINAL

Widuri Marine Terminal is operated by Pertamina Hulu Energi OSES which operates the oil fields located in the Offshore South East Sumatera contract area.

The South East Sumatera contract area was initially awarded to IIAPCO in 1968. Many big oil fields were discovered in this block such as Banuwati, Cinta, Intan, Widuri and Zelda.

Crude oil produced from these fields were stored in the Lentera Bangsa FSO – a floating, storage, and offloading vessel – and then offloaded into oil tankers.

The operatorship of this contract area changed hands many times during its 50 years of operation. Previous operators include IIAPCO, Maxus, Repsol, and CNOOC.

The average daily crude oil lifting volume of the Widuri Marine Terminal was 8501 BOPD.

  1. SENORO MARINE TERMINAL

Senoro Marine Terminal is operated by JOB Pertamina  Medco Tomori Sulawesi which is a joint operating body consisting of Pertamina Hulu Energi, Medco E&P and Tomori E&P.

JOB Pertamina Medco Tomori Sulawesi operating in the Tomori-Toili Block located in Central Sulawesi produces gas and condensate from the Senoro gas field and crude oil from the Tiaka oil field.

The gas from the Senoro field is processed into LNG by the Donggi-Senoro LNG plant which started operation in August 2015.

The average daily lifting volume at Senoro Marine Terminal was 14,857 BOPD

  1. TUBAN MARINE TERMINAL

Tuban Marine Terminal located in East Java is operated by PT Pertamina EP. The terminal handles the lifting of crude oil that Pertamina EP produces from the Tuban block. Before 29 February 2018, the Tuban block was operated under Joint Operating Body (JOB) Pertamina Petrochina East Java.

PT Pertamina EP, established on 17 September 2005, came under the supervision of BPMIGAS on 17 September 2005. BPMIGAS became SKK Migas on 13 November 2012.

On average, 16358 BOPD was lifted at the Tuban Marine Terminal.

  1. ARDJUNA TERMINAL

The Ardjuna oil terminal is operated by Pertamina Hulu Energi ONWJ which operates the oil and gas fields located in the Offshore North West Java work area.

The huge Ardjuna oil field was initially discovered by ARCO after it signed the PSC contract in 1971. ARCO later became BP West Java.  Pertamina Hulu Energi ONWJ became the operator of the Ardjuna field in July 2009.

The average crude oil lifting volume from the Ardjuna terminal was 25626 BOPD.

  1. SENIPAH MARINE TERMINAL

Senipah Marine terminal is operated by Pertamina Hulu Mahakam. The terminal was previously operated by Total Indonesie who discovered several big oil and gas fields – Bekapai, Handil, Tunu, Peciko, Sisi, Tunu –  in the Offshore Mahakam block.

On average, 31539 BOPD was lifted at The Senipah Marine terminal.

  1. RU PP7

The RU PP7 terminal is located in the Riau province in Sumatera and operated by Chevron Pacific Indonesia.

The average daily lifting volume at RU PP7 Terminal was 62,337 BOPD.

  1. DUMAI TERMINAL

The Dumai terminal is located in the Riau province in Sumatera and operated by Chevron Pacific Indonesia who holds the operatorship of the prolific Rokan PSC which will soon expire in 2021.

Chevron Pacific Indonesia, also known as CPI, discovered two super-giant oilfields: the Duri field in 1941 and Minas in 1944. Subsequently, CPI continued to discover many smaller oil fields in the Rokan work area.

Due to its low gravity oil, the Duri field underwent steam flooding in 1985 to enhance the recovery of its heavy oil. The Duri field steam flood project is one of the largest in the world.

The average daily lifting volume at the Dumai Terminal was 116,555 BOPD.

  1. BANYU URIP MARINE TERMINAL

At an average daily crude oil lifting volume of 200, 937 barrels, the Banyu Urip Marine Terminal is currently the top crude oil lifting terminal in Indonesia. It handles the lifting of the crude oil produced by Mobil Cepu from the onshore Banyu Urip field located in the Cepu Block contract area.

After the crude is processed in the central processing facilities (CPF) located at the center of the oil field, the oil is transported through a 72 KM long pipeline to the coast of Tuban, and then through a 23 KM long subsea pipeline to the FSO (Floating, Storage and Offloading) vessel. The FSO is named FSO Gagak Rimang.

The crude oil from the Banyu Urip field is lifted by oil tankers from FSO Gagak Rimang for transport to domestic and international refineries. The FSO has storage capacity for 2 million barrels of crude oil.

This article is written by Jamin Djuang based on the information published by SKK Migas. He is the founder of LDI Training which provides oil and gas training and the published author of The Story of Oil and Gas.

 

Performance of Oil Industry of Indonesia in 2019

IMG_4902
Power Plant at North Jakarta, Indonesia

 

Oil companies in Indonesia and SKK Migas were buzzing with activities and excitement in 2019.

Exploration and Production Results

First, here are the combined performance results of the exploration and production activities of all the oil and gas production sharing contractors in Indonesia operating under the supervision of SKK Migas in 2019:

  • Total number of active work areas: 201
  • Average daily crude oil production: 746,000 BOPD
  • Average daily gas production: 5934 MMSCFD
  • Combined total daily oil and gas production: 1,806,000 BOEPD
  • The total value of the investment: 11.49 Billion USD
  • Number of development wells completed: 322
  • Number of exploration wells drilled: 36
  • The volume of oil and gas in place discovered: 113 BBOE  
  • 2-D seismic surveys completed: 12169 KM
  • 3-D seismic survey completed: 6837 KM2

On the oil and gas discovery front, it is nice to note that REPSOL and partners PETRONAS and MOECO discovered a giant gas field in February 2019 in the Sakakemang block in South Sumatera. With 2 trillion cubic feet of recoverable gas reserves, it is one of the largest gas discoveries in the world in 2019 and also the most significant gas discovery in Indonesia in the last 18 years.

On new field development, Inpex Indonesia and SKK Migas made significant progress in developing the huge Abadi gas field and constructing the LNG plant. It was decided the LNG plant will be built in the Yamdena Island in the Maluku province of Indonesia.

The 15 Largest Oil Producers in Indonesia

Here are the 15 largest oil producers operating under the production sharing system in Indonesia in 2019:

  • ExxonMobil Cepu
  • Chevron Indonesia
  • Pertamina EP
  • Pertamina Hulu Mahakam
  • Pertamina Hulu Energi Offshore North West Java (PHE ONWJ)
  • Pertamina Hulu Energi Offshore South East Sumatera (PHE OSES)
  • PetroChina International Jabung
  • Medco E&P Natuna
  • Petronas Carigali Ketapang
  • Pertamina Hulu Kalimantan Timur
  • BOB Bumi Siak Pusako Pertamina Hulu
  • Pertamina Hulu Sanga Sanga
  • Medco E&P Rimau
  • JOB Pertamina Medco Tomori Sulawesi
  • ConocoPhillips Grissik

The 15 largest natural gas producers in 2019

Here are the 15 largest gas producers in Indonesia in 2019:

  • BP Berau
  • ConocoPhillips Grissik
  • Pertamina EP
  • Pertamina Hulu Mahakam
  • ENI Muara Bakau
  • JOB Pertamina Medco Tomori Sulawesi
  • Premier Oil Indonesia
  • PetroChina International Jabung
  • Medco EP Natuna
  • Kangean Energy Indonesia
  • PHE West Madura Offshore
  • Pertamina Hulu Energi Jambi Merang
  • Husky-CNOOC Madura
  • Mubadala Petroleum Indonesia
  • PHE Offshore North West Java

 

The SKK Migas

The SKK Migas of Indonesia has also been very proactive in its roles as the supervisor of the production sharing contractors to facilitate their exploration and production activities.

With the vision to increase the oil production in Indonesia to one million barrels per day by 2030, SKK Migas instituted the Integrated Operation Center (IOC) and the One Door Service Policy (ODSP) in 2019.

The Integrated Operation Center (IOC)

 SKK Migas launched the Integrated Operation Center (IOC) in 2019. With the IOC, SKK Migas now has online and realtime access to information and data related to the exploration, drilling and production activities of the production sharing contractors in all work areas.

The  IOC allows SKK Migas to monitor the daily field activities of all operators, understand the field situations and make prompt recommendations.

The objectives of SKK Migas in establishing the OIC are to keep the oil and gas operations go smoothly and achieve the production targets.

Currently here is the information that is being monitored by the Integrated Operation Center:

  • Oil and gas production (Production Dashboard)
  • Oil and gas lifting (Oil and Gas Lifting Dashboard)
  • Stock Management (Stock Management Dashboard)
  • Plant Operation (Plant Information Management System – PIMS)
  • Facility Maintenance
  • Project Progress
  • Vessel tracking (Vessel Tracking Information System – VTIS)
  • Real-Time Drilling Operation
  • Emergency responses (Emergency Response Center – ERC)

The One Door Service Policy (ODSP)

SKK Migas also introduced One Door Service Policy (ODSP) in 2019. Through ODSP, the applications of all the permits related to exploration, drilling, field development, and production can be processed in one place.

SKK Migas will work with and support all the production sharing contractors in preparing the required documents and submitting the applications to obtain the various permits they need.

This is a very significant service because of the various types of permits that oil operators must apply. With this one-door policy, SKK Migas is hopeful that the various permits can be obtained promptly, and the oil and gas exploration and production targets can be achieved.

The One Door Service Policy consists of four work-groups that will help the production sharing contractors deal with the following type of permits:

  • Permits related to land acquisition and use 
  • Permits related to the environment, safety and security
  • Permits related to the use of resources and infrastructure
  • Permits related to the use of materials and human resources from outside Indonesia.

Several exploration and production targets were exceeded in 2019 and SKK Migas is hopeful the new 2020 targets can be achieved also by the end of the year.

This article is adapted from the information posted by SKK Migas.

 

 

The SKK Migas of Indonesia

SKK Migas – Satuan Kerja Khusus Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi – is a special task force that implements the production sharing contracts, develops the oil and gas upstream business and supervises the activities of the production sharing contractors in Indonesia.

SKK Migas is an institution created by the government of Indonesia based on the presidential regulation “Perpres Nomor 9 Tahun 2013 on the development and management of upstream oil and gas activities”.

SKK Migas is tasked to manage and supervise the upstream oil and gas activities – exploration, drilling, field development, and production – based on the production sharing contract system. It is established with the mission to ensure the exploration and production of the oil and gas will benefit the country and the people of Indonesia.

Here are the functions of SKK Migas:

  • Give considerations and recommendations to the Minister of Energy and Mineral Resources of Indonesia regarding the preparations and tenders of oil and gas work areas
  • Sign production sharing contracts
  • Study the development plan of a new oil and gas field in a work area, and submit the development proposal of the production sharing contractor for approval by the Minister of Energy and Mineral Resources
  • Give approval on the field development plan submitted by production sharing contractors
  • Approve the work program and budget of production sharing contractors
  • Monitor the operation and progress made by production sharing contractors and submit reports to the Minister of Energy and Mineral Resources
  • Appoint sellers of the produced oil and gas that will benefit the country.

These functions were originally carried out by BPPKA, a department under Pertamina, when the production sharing contract system was introduced in 1966. BPPKA (Badan Pembinaan Pengusahaan Kontraktor Asing) was later replaced by BP Migas. BP Migas later became SKK Migas in 2013.

To best serve and support the activities of oil operators around the country, SKK Migas has five field offices. They are:

  1. SKK Migas Sumatera Bagian Utara located in Pekanbaru
  2. SKK Migas Sumatera Bagian Selatan located in Palembang
  3. SKK Migas Kalimantan and Sulawesi located in Balikpapan
  4. SKK Migas Jawa, Bali, Madura dan Nusa Tenggara located in Surabaya
  5. SKK Migas Wilayah Papua dan Maluku located in Sorong

The current head of SKK Migas is Mr. Dwi Soetjipto. Its head office is located at Wisma Mulia, Jalan Gatot Subroto Kav. 42, Jakarta, Indonesia.