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.

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, it left Indonesia in 1995 when it sold all its assets to Medco Energi for 88 million USD.

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, 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.

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. After CALTEX managed to obtain the approval from the newly formed government of Indonesia to operate in the Rokan block under a work contract scheme, oil production began in 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 will hand over the operatorship of the Duri field and the Rokan block to Pertamina in August 2021.

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)

 

Before there was OPEC, there were the “SEVEN SISTERS”.

The Seven Sisters, a consortium of seven world’s largest 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.

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

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 people and it produces a combined 1.7 million BOE of oil and gas daily.

 

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

 

Boring van de Koninklijke Nederlandse Petroleum Maatschappij bij de Aroebaai te Pangkalansoesoe aan de Oostkust van Sumatra 1916
1892 Oil Drilling in Deli, Sumatera by NV Koninklijke Nederlandsche Petroleum Maatschappij

 

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.