Tag: Dwi Soetjipto

Indonesian oil industry

Oil and Gas Activities in Indonesia in First Half of 2021

SSV Catarina drilled 5 Merakes development wells and the successful Maha-2 exploration well in ENI’s West Ganal block. Photo courtesy of Akhmad Syafrial.

The upstream oil and gas operators in Indonesia contributed 6.67 billion USD of revenue for the government of Indonesia in the first half of 2021. This amount is 91.7% of the full-year Indonesian government revenue target from E&P activities in 2021.

Mr. Dwi Soetjipto, the head of SKK Migas, is thankful that the 2021 first-half revenue contribution was better than expected in a meet-the-press event on 16 July 2021.

Here are the results from the oil and gas exploration and production activities in Indonesia in the first half of 2021 according to SKK Migas.

Oil Lifting Costs

The oil industry managed to lower the oil and gas production cost in 2021. The average production cost in the first half of this year is USD 12.17 per BOE (barrel of oil equivalent) whereas it was USD 13.71 per BOE in the same period last year. 

Oil and Gas Production

The average oil production in the first half of 2021 is 667,000 BOPD. This is below the 705,000 BOPD target set by the government for 2021.

The average gas production is 5430 MMSCFD in the first six months of 2021. This is below the 5638 MMSCFD targets of the government for 2021.

To make up for the shortfall of oil and gas production, SKK Migas is asking the oil operators to speed up their work programs.

The average combined oil and gas production in the first half of 2021 is 1.64 million BOEPD.

Proposed Incentives

To stimulate oil and gas exploration and production in Indonesia, SKK Migas is pushing for government approval on several incentives.         

The three incentives that are currently being proposed are:

  1. Providing a certain type of tax holiday to all oil and gas operators
  2. Reducing the processing fees charged by the Badak LNG plant to US$0.22 per MMBTU.
  3. Lowering tax paid by companies who provide certain types of goods and services to oil companies.

Completed Oil and Gas Projects in Indonesia

Seven upstream oil and gas projects out of the 12 targeted for 2021 have been completed in the first half of this year, according to SKK Migas.

These 1.46 billion USD projects contributed 9850 BOPD of new oil and 475 MMSCFD of gas.

Here are the 7 completed projects:
1. First phase production from Belato-2 oil field by Seleraya Merangin Dua in South Sumatera

2. EOR in Jirak Field by Pertamina EP in South Sumatera

3. Development of KLD gas field by Pertamina Hulu Energi ONWJ

4. Gas Supply to the Balikpapan refinery from Bontang by Pertamina Hulu Mahakam

5. West Pangkah field development by Saka Indonesia Pangkah Ltd

6. Merakes gas field development in East Sepinggan block by ENI

7. Gas supply from South Jambi B block to PLN Jambi by Jindi South Jambi B.

The Jambaran Tiung Biru Project

SKK Migas is working closely with Pertamina EP Cepu on the development of the significant Jambaran Tiung Biru project. This gas field development project in East Java is categorized as a national strategic project.

The Jambaran Tiung Biru project is more than 90% complete and gas production is expected to come on stream in the fourth quarter of 2021.

Plans of Field Development

SKK Migas approved 14 plans of field development (POD) that will potentially increase the oil and gas reserves by 131.2 million barrels of oil equivalent (BOE).

Exploration Drilling and Discoveries

Oil operators completed seven exploration wells with the following results:

  • Gas discovery in two wells: Maha-02 and Fanny-02
  • Oil discovery in two wells: Hidayah-01 and MSDE-01A
  • Three dry wells: Barakuda-1x, NSD-1 ExpTail and Plajawan Dalam.

The P50 reserves from Well Hidayah-01 are 87 MMBOE. The P50 combined reserves from wells Maha-02, Fanny-02, and MSDE-01A are 154 MMBOE.

P50 reserves are oil and gas reserves that have a 50% or greater probability of being recovered from a petroleum asset.

Drilling, Workovers, and Seismic Survey Activities

  • Number of development wells drilled – 186
  • Number of exploration wells drilled – 13
  • Number of workovers – 309
  • Number of well services – 11307
  • 2D seismic survey completed – 1917 Km
  • 3D seismic survey completed – 673 Km2

This article is adapted by Jamin Djuang based on the information provided by SKK Migas. He is the Chief Learning Officer of LDI Training.

Uncategorized

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.