Tag: ENI

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.

Oil companies

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.

For 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.

TotalEnergies

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, then to Total in 1991 and finally TotalEnergies.

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

Based in France, TotalEnergies 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.

Company Profits in 2022

Here are the 2022 profits of the new Seven Sisters of oil.
ExxonMobil – $59.1 billion
Shell – $39.9 billion
Chevron – $36.5 billion
TotalEnergies – $36.2 billion
BP – $27.7 billion
ConocoPhillips – $18.7 billion
ENI – $14.6 billion

The year 2022 has been amazing for the new seven sisters. With their combined total profit of $232.7 billion, 2022 is an earning record year for many of them. Most of them doubled their profits in 2022 from the previous year.

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