The Lumut Balai geothermal power plant of Pertamina Geothermal Energy.
Pertamina Geothermal Energy (PGE) is a big and very active geothermal energy player in Indonesia. It is the operator of the first geothermal power plant in Indonesia – The Kamojang plant.
Engaging in thirteen geothermal work areas in Indonesia, PGE involves in the production of 1877 MW of geothermal power, 672 MW of which is under its operation and 1205 MW under the joint operation contracts.
PGE operates six of its solely owned geothermal plants and has interests in four other geothermal plants that are under a joint-operating contract scheme.
Pertamina Geothermal Energy has targets to increase its own power generation capacity from 672 MW to 1540 MW by 2030 contributing to reducing 9 million tons of CO2 emission annually.
As PGE aims to be a world-class green energy producer and to accelerate its ambitious geothermal expansion, it officially became a public company on 24 February 2023 following the completion of its initial public offering (IPO).
PGE booked a net profit of USD 127.3 million in 2022. This is an increase of almost 50% from its profit in 2021.
Part of the profit came from selling US$ 747,000 worth of carbon credits.
Currently, PGE is constructing its 55 MW Lumut Balai Unit 2 power plant which will come online by the end of 2024.
To further increase the installed capacity of its geothermal power, PGE plans to construct two 55 MW power stations in the Hulu Lais geothermal work area.
Current Projects of Pertamina Geothermal Energy
Here are its current projects:
• Constructing the Lumut Balai 55 MW Unit 2 power station. Pertamina Geothermal Energy has commissioned the Mitsubishi Power consortium to construct its second 55-MW power station in the Lumut Balai work area in South Sumatra. When completed, the Lumut Balai geothermal plant will have an installed capacity of 110 MW.
• Completing a small-scale 500 KW geothermal power plant in Lahendong. This will serve as a model for small geothermal power plants to be built in other parts of the country.
• Recently PGE signed an MOU with Ormat Technologies to conduct a joint study on developing power plants using binary technology. CEO of PGE, Ahmad Yuniarto said that the application of binary technology has the potential to increase its current already installed generation capacity by up to 210 MW.
• PGE is exploring a partnership with Chevron targeting the utilization of geothermal energy for other purposes including such as green hydrogen production, CO2 processing, and extraction of rare metals.
• Pertamina Geothermal Energy sets out to expand its Ulubelu geothermal power plant located in Lampung, Indonesia. It plans to drill six wells in 2023. Currently, the Ulubelu power plant consisting of four power stations have a combined installed capacity of 220 MW. Pertamina is the operator of two of the power units while PLN is the operator of the other two power units.
The six geothermal plants that PGE operates are:
Kamojang in West Java – 235 MW
Ulubelu in Lampung, South Sumatera – 220 MW
Lahendong in North Sulawesi – 120 MW
Lumut Balai Unit 1 in South Sumatera – 55 MW
Karaha in West Java – 30 MW
Sibayak in North Sumatera– 12 MW
The IPO of Pertamina Geothermal Energy
PGE officially became a public company on 24 February 2023 following the completion of its initial public offering (IPO).
The IPO of Pertamina Geothermal Energy is highly successful. It is oversubscribed 3.81 times. And this is significant!
Through the IPO, PGE offered to sell 25% of its shares, equivalent to 10.35 billion shares, at IDR 875 per share to the public.
Since the IPO is oversubscribed, PGE is successful in selling all the shares that it offered to sell.
This means PGE has successfully raised fresh funds worth IDR 9.056 trillion or 596 million USD.
The oversubscription shows there is huge interest from institutional investors in the business of clean energy and PGE.
One such company is MASDAR from UAE. Masdar is the biggest subscriber of PGE shares. Through the IPO it now owns 15% of the total PGE shares.
Masdar is one of the world’s largest clean energy producers with projects located in 40 countries. By investing in PGE, Masdar plans to further expand its interest in clean energy development in the Asia Pacific.
With its successful IPO and its new partner Masdar, PGE is set to expand its business in developing geothermal resources in Indonesia and beyond.
Jamin Djuang – Chief Learning officer of LDI Training
The Matsukawa Geothermal Power Plant – The first geothermal power plant in Japan. Photo courtesy of Dr. Roland N. Horne
The utilization of geothermal resources to produce electricity has been increasing since the invention of the first geothermal energy generator by Piero Ginori Conti in Italy in 1904.
By 2024, there are more than one hundred geothermal power plants located around the world producing electricity with a total installed capacity of 16873 MW.
Want to know when and where the first geothermal power plants were set up around the world?
Here are the first geothermal power plants built in significant geothermal energy-producing countries.
THE LARDERELLO PLANT – ITALY – 1904
The first and the oldest geothermal power plant in the world is in Larderello in Tuscany, Italy. The Larderello plant is celebrating 120 years in producing geothermal energy.
Following the invention of the first geothermal energy generator by Piero Ginori Conti in 1904, the Larderello 1 geothermal power plant was completed in 1913 with a capacity of 250 kW.
The Enel group acquired Tuscany’s geothermal areas in 1962 and now operates 34 geothermal plants with a total capacity of 800 MW, supplying 34% of the electricity needs of the region.
By the way, the Larderello steam field is so awesome that it is referred to as Valle del Diavolo – Devil’s Valley.
Today, Italy has a total installed capacity of 916 MW making it the eight-largest geothermal energy producer in the world.
WAIRAKEI PLANT – NEW ZEALAND – 1958
New Zealand is the second country in the world that built a geothermal power plant.
The first geothermal plant in New Zealand, the Wairakei Unit 1 station was completed in 1958 with a capacity of 11.2 MW. The Wairakei geothermal plant is located at North Taupo.
Today, the Wairakei geothermal power plant has a total combined capacity of 330 MW provided by Wairakei power stations 1 to 16, Te Mihi power stations 1 and 2 and Poihipi power station.
The number of geothermal power plants in New Zealand has grown to 15 producing 1037 MW of electricity making it the fifth-largest geothermal producing country in the world.
THE GEYSERS UNIT 1 PLANT – USA – 1960
The first geothermal power plant in the US is located at the Geysers. The Unit 1 plant was completed in 1960 with a capacity of 11 MW.
The Geysers geothermal field in California is the most prolific geothermal producing field in the US also in the world. It now has 18 geothermal power plants and a total installed capacity of 1590 MW.
Today the US with more than 69 geothermal power plants located in various states has a total installed capacity of 3794 MW. This makes the US the biggest geothermal energy producer in the world.
MATSUKAWA PLANT – JAPAN – 1966
The first geothermal power generation plant in Japan is the Matsukawa Geothermal Power Plant (Matsukawa Jinetsu Hatsudensho).
The plant started operating in 1966 with an initial capacity of 9.5 MW. It now has an installed capacity of 23.5 MW.
Today, Japan is the tenth largest geothermal-producing country in the world with a total installed capacity of 621 MW. Japan has the highest density of geothermal power plants. According to the Geothermal Research Society of Japan, there are 19 geothermal power plants in Japan with capacities of greater than 1 MW, and many small plants with capacities ranging from 20 KW to 250 KW.
BJARNARFLAG PLANT – ICELAND – 1966
Bjarnarflag geothermal station is the oldest geothermal power plant in Iceland. Bjarnarflag was completed in 1966 having a capacity of 3 MW.
Following the success of the Bjarnarflag plant, several other power plants were built in Iceland.
Iceland, the land of ice and fire, is a natural place to tap its geothermal resources for energy. The country today produces 754 MW of electricity from its geothermal resources making it the ninth-largest geothermal producer in the world.
As 99.96% of its energy needs come from renewable resources, it is probably the greenest country in the world.
CERRO PRIETO PLANT – MEXICO – 1973
The first geothermal power plant in Mexico, Cerro Prieto 1 was commissioned in April 1973.
The Cerro Prieto field is the world’s largest known water-dominated geothermal field. It has five power stations with a total installed capacity of 820 MW.
Today, Mexico, generating 963 MW of electricity is the sixth-largest geothermal energy producer in the world.
KIZILDERE PLANT – TURKEY – 1974
The first geothermal power plant in Turkey is in Kizildere.
The Kizildere geothermal power plant began its operation in 1974 as a prototype system with a 500 KW capacity.
Ten years later, the Kızıldere Jeotermal Elektrik Santralı plant was commissioned in 1984 with an installed capacity of 17.4 MW.
In 2013, the Kizildere Geothermal Power Plant reached an installed capacity of 95 MW making it Turkey’s biggest.
Today, with a total of 1710 MW capacity, Turkey is the fourth largest geothermal energy producer in the world.
AHUACHAPAN PLANT – EL SALVADOR – 1975
The Ahuachapán plant, completed in 1975, is the first geothermal power plant in El Salvador.
The journey of geothermal development in El Salvador began with exploration in 1955 for its geothermal potential, followed by the drilling of its first geothermal well in 1968.
The country’s first 30 MW Unit 1 Ahuachapán geothermal power plant was subsequently completed in 1975.
Two more power stations were later added – 30 MW Unit 2 in 1976 and 35 MW Unit 3 in 1981 – giving the Ahuachapán power plant a total installed capacity of 95 MW.
The Ahuacapan plant is served by 21 steam production wells and 9 reinjection wells.
Today El Salvador has two geothermal plants, the 95 MW Ahuachapan plant and the 104 MW Berlin plant giving the country a total installed geothermal capacity of 204 MW.
These two power plants generate 21% of the electricity in El Salvador. El Salvador is one of the countries having the highest percentage of electricity generated from geothermal resources.
The contribution of electricity from geothermal resources is set to increase in the future as the country is endowed with significant geothermal potential.
LEYTE PLANT – THE PHILLIPPINES – 1977
The first geothermal power plant in the Philippines, the Leyte Geothermal Power Plant began operation in 1977.
Located on the island of Leyte, the plant started as a pilot plant using a portable 3 MW power generation unit connected to a wellhead.
With the success of the pilot plant, Leyte Island now has five geothermal power plants.
Other geothermal plants in the Philippines are in the islands of Luzon, Mindanao, and Negros.
Today the Philippines with a total installed capacity of 1935 MW is the third largest geothermal energy producer in the world. Its geothermal power generates 11% of the country’s electricity.
YANGBAJAIN PLANT – TIBET – 1977
Yangbajain is the first geothermal power plant in Tibet, China. The plant was initially completed in 1977. It now has an installed capacity of 24 MW.
The Yangbajain plant is located at an elevation of 4800 meters above sea level making it the highest geothermal plant in the world.
OLKARIA I POWER STATION – KENYA – 1981
Olkaria I Geothermal Power Station is the first geothermal power plant in Kenya and Africa. The first unit having a capacity of 15 MW was commissioned in 1981.
Over the years, under the management of KenGen – Kenya Electricity Generating Company – the Olkaria I geothermal power generation units has grown to six, with the latest additional unit, the 70 MW Olkaria I AU 6 completed in 2022.
Today, with a total installed capacity of 944 MW Kenya is the eighth largest geothermal energy producer in the world. Its geothermal power contributes an amazing 66% of the country’s electricity.
KAMOJANG PLANT – INDONESIA – 1982
Operating since 1982, the 235 MW Kamojang geothermal plant is the first geothermal power plant in Indonesia. It is located in the Garut area in West Java.
The Kamojang geothermal reservoir was first discovered by the Dutch more than one hundred years ago when it successfully drilled the first steam-producing well in Indonesia.
Today Indonesia has a total installed capacity of 2356 MW making it the second-largest geothermal energy producer in the world.
MOMOTOMBO PLANT – NICARAGUA – 1983
The Momotombo plant is the first geothermal power plant in Nicaragua.
Its first power generating unit of 35 MW was completed in 1983. A second 35 MW unit was later added in 1989 bringing the total capacity to 70 MW.
Nicaragua’s second geothermal plant is the San Jacinto Tizate which was completed in 2013 with an installed capacity of 72 MW.
BOUILLANTE PLANT – THE CARIBBEAN – 1986
The first geothermal power plant in the Caribbean is the Bouillante plant.
The 5 MW Bouillante Unit 1 was commissioned in 1986, and the 10 MW Bouillante Unit 2 was completed in 2004.
Currently the 15 MW Bouillante plant is managed by Ormat. The company has plan to increase the geothermal power generation capacity in the Caribbean to 35 MW.
MIRAVALLES PLANT – COSTA RICA – 1994
The first geothermal power plant in Costa is the 55 MW Miravalles plant commissioned in 1994.
Today with a total installed capacity of 207 MW, Costa Rica is the twelfth largest geothermal producer in the world.
ORTITLAN PLANT – GUATEMALA – 1998
The first geothermal power generation unit in Guatemala was built in Amatitlán geothermal area in 1998. It started as a portable power plant of 5 MW.
A full-scale 20 MW geothermal power plant, the Ortitlan, was later built in the Amatitlan area in 2008.
Guatemala’s second geothermal plant, the Orzunil, located in the Zunil geothermal area was completed with a capacity of 24 MW in 2001.
CERRO PABELLON PLANT – CHILE – 2017
The first geothermal power plant in Chile was built in 2017 by Geotermica del Norte (GDN), a joint venture between Enel Green Power Chile and ENAP.
Located at 4500 meters above sea level, the Cerro Pabellón is the highest geothermal plant in South America. It is located on the high plateau of the Atacama Desert in the Antofagasta Region of Chile.
The plant, which uses high enthalpy technology with a binary cycle, is the only operational geothermal plant in South America.
Its third power station with a capacity of 33 MW was completed in 2021 giving Cerro Pabellon a total power of 81 MW.
PLATANARES PLANT – HONDURAS – 2018
The first geothermal power plant of Honduras, the 35 MW Platanares geothermal plant was inaugurated in 2018.
CASANARE PLANT – COLOMBIA – 2021
Colombia inaugurated its first geothermal power unit located in Casanare in March 2021.
The first of its kind, this innovative 100 KW power unit takes advantage of the hot water produced along with the oil from the Las Maracas field.
YANGBAJAIN PLANT – TIBET – 1977
Yangbajain is the first geothermal power plant in Tibet, China. The plant was initially completed in 1977. It now has an installed capacity of 24 MW.
The Yangbajain plant is located at an elevation of 4800 meters above sea level making it the highest geothermal plant in the world.
QINGSHUI PLANT – TAIWAN – 2021
The Qingshui geothermal power plant is the first privately run commercial-scale geothermal power plant in Taiwan. With an installed capacity of 4.2 MWe, the plant is owned jointly by Fabulous Power Co and Taiwan Cogeneration Corp under build-operate transfer and rehabilitate-operate-transfer models with equipment from Ormat Technologies.
The Qingshui geothermal power plant started to operate in October 2021 and was officially inaugurated in November 2021.
Located in Yilan County, Taiwan, the reservoir temperature is around 180 degrees Celsius at a depth of 1,200 to 2,100 meters.
Its current 38 million kWh power output is enough to meet the demand of about 75% of the 10,000 households of the combined Datong and neighboring Sanshing townships.
Taiwan added the new 840 KW Renze geothermal power plant in 2023. Also Located in Yilan County, the power plant is operated by Taiwan Power Company (Taipower), a state-owned electricity company. The plant will produce 4.7 million kWh of electricity per year.
Taiwan government has a target of having a total of 20 MW of installed geothermal power generation capacity by 2025.
Aluto Langano – Ethiopia -2024
Ethiopia expects to have its first geothermal plant, the 35 MW Aluto Langano plant, in September 2024.
The Ethiopian Electric Power (EEP), the plant operator said the company has drilled 10 wells and tested 6 of them. The tests have confirmed a production capacity of 25 MW of power so far. EEP plans to drill four more wells.
When the plant is completed, the 35 MW phase 1 Aluto Langano plant will be the first geothermal plant in Ethiopia.
EPILOGUE
The world is endowed with huge geothermal resources. As the world marches toward net zero-emission, we shall see the application of geothermal energy as a renewable resource to generate the electricity we need will continue to expand.
This article is written by Jamin Djuang – Chief Learning Officer of LDI Training – based on information from various sources.
Indonesia is the second-largest geothermal energy producer in the world after the USA. The total installed power generating capacity from the active 19 geothermal power plants in Indonesia was 2418 MW at the end of 2023.
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 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 381 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 power plant now consists of six power stations.
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, comprising three power stations, started its commercial operation in 1994 and is one of the oldest geothermal power plants in Indonesia.
The Darajat geothermal assets, located in West Java, were initially explored and developed by Amoseas. The assets were later taken over by Chevron which eventually sold them 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 plant, consisting of three power stations with a total of 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 started to operate the first power station in March 2017, the second station in October 2017, and the third station in March 2018.
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 project plant was initially started by Magma Nusantara Limited.
The power plant began its commercial operation in 1999. The power plant consists of two power stations – the 110 MW Unit 1 and the 117 MW Unit 2 stations.
Star Energy, the current operator of the Wayang Windu power plant, acquired the project in November 2004.
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:
Adding a small 10 MW power plant.
Developing a 55 MW Dieng-2 power plant (PLTP Dieng Unit 2)
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 number of power plants in Indonesia will likely increase as several new power plants will be completed in the 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 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
Medco Energi Internasional is the first publicly owned oil company in Indonesia.
Medco is celebrating more than forty years of presence and continuing successes as one of the leading energy companies in Indonesia and Southeast 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 year 2022 is a wonderful year for Medco Energy. It booked net profits of 531 million USD in 2022 which is more than 10 times higher than the US$ 47 million it made in 2021. The company produced 163 million barrels of oil equivalent (BOE) in 2022, a 73% increase over the previous year.
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
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, Medco Energi International now owns a minority interest in the gas pipeline network supplying Central Sumatera, Batam, and Singapore customers.
Acquisition of the Beluga Work Area
Medco Energi was awarded the Beluga exploration PSC on September 21, 2023. The work area is located close to its existing South Natuna Sea Block B infrastructure.
Medco Energi Internasional Q1 2023 Performance
Net profit – 119.5 million USD
Oil and gas production – 162,000 BOEPD
Average price of oil sold – $75.2 per barrel
Average price of gas sold – $7.2 per MMBTU
Oil and gas lifting cost – $7.4 per BOE
Oil and gas capital expenditures – $99 million
The capital expenditures are for the development in Natura and Corridor work areas.
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.
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.
Dr. Roland N. Horne is the Thomas Davies Barrow Professor of Earth Sciences at Stanford University, and Senior Fellow in the Precourt Institute for Energy. He was also formerly Chairman of the Petroleum Engineering Department from 1995 to 2006.
He holds BE, Ph.D. and DSc degrees from the University of Auckland, New Zealand, all in Engineering Science.
Roland Horne is well recognized as an expert in geothermal resources. He received Geothermal Special Achievement Award from Geothermal Resources Council in 2015. He is the Technical Programme Chair of World Geothermal Congress 2020 in Reykjavik and a member of the Geothermal Resources Council (GRC) Board of Directors.
Dr. Horne is also well known for his work in well test interpretation, production optimization, and analysis of fractured reservoirs.
He is an internationally-recognized expert in the area of well test analysis and has twice been an SPE Distinguished Lecturer on well-testing subjects.
Under him, more than 50 people have obtained Ph.D. degrees at Stanford University. Currently, Stanford University is recognized as one of the top schools in the world for the study of well test interpretation.
Prof. Roland Horne has written more than 90 technical papers, is the author of the book Modern Well Test Analysis and co-author of the book Discrete Fracture Network Modeling of Hydraulic Stimulation. He is an SPE Honorary Member, and a member of the National Academy of Engineering in the USA.
Prof. Horne will conduct a 4-day webinar – Geothermal Reservoir Engineering– in October 6-9, 2020. If you want more information about this course, please contact LDI Training at lditrain@singnet.com.sg.
He also conducts a 5-day Modern Well Test Analysis course. This highly regarded course has been attended by thousands of oil and gas, as well as geothermal professionals in many countries for more than 20 years. If you want more information about the course, please contact LDI Training at lditrain@singnet.com.sg.
The Sarulla power plant with a total capacity of 330 MW is the largest geothermal power plant in Indonesia and also one of the 10 largest geothermal power plants in the world.
The Sarulla power plant has three combined-cycle units. Construction of the power plant started in May 2014 and the first unit named Silangkitang was completed in March 2017. Units Namora I-Langit 1 and Namora I-Langit 2 started operation in October 2017 and May 2018 respectively.
Located in North Sumatera of Indonesia, the power plant is operated by Sarulla Operations Ltd, a consortium consisting of Medco Energi, Itochu, Kyushu Electric Power Company, Inpex and Ormat with a total investment of US $1.7 billion.
The generated electricity is distributed by PLN, Perusahaan Listrik Negara, which is the state-owned electricity company of Indonesia.
This project demonstrates the commitment of the Indonesian government to increase energy production from renewable resources, especially from its huge geothermal potential. Indonesia has 40% of the world’s geothermal resources.
The total installed geothermal power in the world in 2022 is 16,127 MW according to ThinkGeoEnergy. The five countries producing more than one Giga Watt (GW) of geothermal power are:
The USA – 3794 MW
Indonesia – 2356 MW
The Philippines – 1935 MW
Turkiye – 1682 MW
New Zealand – 1037 MW
Here is a little bit of an interesting history about the Sarulla project. The Sarulla geothermal resource was originally explored and discovered by Unocal North Sumatera Geothermal. Unocal’s plan to construct the first power plant was suspended during the financial crisis in 1998.
Watch this spectacular USGS video showing lava laze formed by the lava of Kilauea volcano flowing into ocean at Kapoho bay on June 4, 2018.
The lava is from Kilauea Volcano’s lower east Rift Zone entering the ocean. The ocean entry is about a half-mile wide. The flow sends a large laze plume into the air along the coast.
What is lava laze?
When the lava flow goes into the ocean water, it boils the water and creates a white acidic plume. That’s laze.
“It’s a complex chemical reaction that occurs between the lava flow and seawater,” said Wendy Stovall, a volcanologist with the U.S. Geological Survey. “It creates a mixture of condensed acidic steam, hydrochloric acid gas and tiny shards of volcanic glass.”
From the air, the plume looks like exhaust from a factory or the white smoke released during a forest fire.
If you’re underneath the plume, a light sprinkle of rain as corrosive as battery acid can fall on you. The acid can burn your skin, irritate your eyes and make it difficult to breathe. In rare cases, the damage can be permanent.
Geothermal plants can be safely situated near a volcano, says Dr. Roland Horne, Thomas Davies Barrow Professor in the School of Earth Sciences and Senior Fellow at the Precourt Institute for Energy at Standord University.
In this article, Dr. Roland Horne discusses geothermal energy in the face of natural hazards and a way to tap the earth’s heat far from volcanoes in the future.
I highly recommend you read the article that I mention above. In this article you can also watch the awesome lava flow from a fissure of Mt. Kilauea on May 19, 2018 and learn about Stanford University’s School of Earth, Energy & Environmental Sciences.
