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 is 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.

Epilogue

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

Its 2020 exploration drilling campaign in the South Natuna Sea Block B is 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 40 years of progress, with its solid management team, it certainly will continue to march toward an even brighter future.

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

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.

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 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.

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