The Amazing Chevron Pacific Indonesia

Welcome sign board at Caltex Rumbai camp entrance. Photo by Sasmito Adibowo.

After 97 years in Indonesia and producing more than 12 billion barrels of oil from the jungle in central Sumatera, Chevron Pacific Indonesia finally hands over its vast operation in the Rokan block to Pertamina Hulu Rokan on 8th August 2021.

The amazing story of Chevron Pacific Indonesia began in 1924 when Standard Oil of California (Socal), sent its exploration team to Indonesia to assess the oil potential in the basin in central Sumatera.

After the initial exploration expedition, Standard Oil of California set up the Dutch registered company, NV Nederlandsche Pacific Petroleum Maatschappij (NPPM), in June 1930 so it could conduct business in Indonesia, which was under the control of the Netherlands East Indies (NEI) at that time.

In 1936 NPPM became CALTEX when Socal and Texaco (Texas Oil Company) jointly formed a company called California Texas Petroleum Corporation to expand their operation in Asia, Australia, and New Zealand.

For most of the history of Chevron Pacific Indonesia, the company was known as Caltex or CPI (Caltex Pacific Indonesia). For this reason, the name Caltex or CPI is used frequently in this article to describe the activities and achievements of Chevron Pacific Indonesia. 

The achievements of Caltex in Indonesia are awesome. Here are some of them:

  • It discovered two giant oil fields in Central Sumatera – The Duri and the Minas field.
  • It also discovered more than 100 oil and gas fields in the Rokan block and several other blocks.
  • It is the longest surviving oil company that began its operation in Indonesia as a Dutch company.
  • It is the biggest oil producer in Indonesia of all time. It produced more than 12 billion barrels of oil in Sumatera and its daily production reached 1000,000 BOPD at its peak.
  • It operated the famous and successful Duri steam flood.
  • Rokan block is the largest oil concession block in Indonesia.
  • It drilled a total of 16023 wells in the four blocks it operated: The Rokan block, the CPP block (Coastal Plain Pekanbaru), the Siak block and the MFK block (Mountain Front Kuantan).

MILESTONES OF CHEVRON PACIFIC INDONESIA

As the 8th of August 2021 marks the end of Chevron Pacific Indonesia, here are the key milestones of Caltex Pacific Indonesia’s operations in Indonesia.  

1924

Standard Oil of California sent a team of geologists to Indonesia in March 1924 to survey the oil potential in Central Sumatera.        

1930

Chevron registered the company Nederlandsche Pacific Petroleum Maatschappij (NPPM) in 1930 so it could operate in Indonesia which was under the rule of the Netherlands East Indies.

1936

Chevron and Texaco (Texas Oil Company) jointly formed California Texas Petroleum Corporation (Caltex) in 1936 to market its oil products in Asia, Australia, and New Zealand.

In Indonesia, NPPM became Caltex Pacific Petroleum Maatschappij (CPPM).

Caltex then received the right to explore and produce oil in an area in central Sumatera from the Netherlands East Indies. The area is now known as the Rokan block.    

1940

Caltex made its first discovery in Indonesia when it discovered oil in the Sebanga field in Riau in August 1040.

1941

Caltex discovered the giant oil field Duri in 1941. Duri has the largest oil deposit in Southeast Asia at that time.

1944

Caltex discovered another giant oil field, the Minas field, in December 1944.

1945

Indonesia declared its independence in 1945. This is the event that changed the ways how oil companies operated in Indonesia.

1951

PT Caltex Pacific Indonesia, commonly referred to as CPI, was established in 1951 as an Indonesian company and was awarded the right from the government of Indonesia to continue to operate the Rokan block under a work contract scheme.

1952

Oil production from the Minas field started in April 1952 and was exported from Parawan and Pakning. The initial oil production from the Minas field was 15,000 BOPD.

1954

The Duri field started to produce oil in February 1954.

1955

Caltex discovered the Bekasap field in September 1955.

1958

Caltex built the first road that connected Pekanbaru and Dumai. It was also the first road that linked the east and west coasts of the island of Sumatra.

Caltex completed the Dumai oil export terminal in July 1958. At the same time, Caltex also completed the construction of oil pipelines from Duri to Dumai.

1959

Minas crude was exported from the Dumai terminal beginning in January 1959.

1963

PT Caltex Pacific Indonesia appointed Julius Tahija, the first native Indonesian as its president in 1963. 

1965

Oil production from the Bekasap field began in June 1965.

Oil production from the Duri field during the primary recovery phase peaked at 65,000 BOPD in 1965.

1966

The Pematang field came online in July 1966 and the Pungut field in August 1966.

1967

Caltex cumulative oil production reached 1000,000,000 barrels in August 1967.

Caltex constructed an extensive pipeline and road networks to connect major fields such as Bangko, Bekasap, Pematang, Petani, and Kotabatak. These fields significantly increased its oil production output.

1969

The cumulative oil production from the Minas field reached 1000,000,000 barrels in May 1969.

1973

The Petapahan field began producing oil in January 1973.

Daily oil production of Caltex reached 1000,000 BOPD for the first time in May 1973.

1975

Caltex started the Duri steam flood pilot project.

1977

CPI completed the construction of the 350-meter long bridge over the Siak river connecting the city of Pekanbaru to Rumbai, and former President Soeharto inaugurated the bridge in April 1977. Rumbai is the area where the main office and housing complex of Caltex are located.

1980

Caltex completed its first oil Gathering Station under the Duri steam flood project. More gathering stations were later added as the Duri steam flood expanded.  

1983

Caltex completed its main office building in Rumbai.

1990

The late former President Soeharto inaugurated the Duri Steam Flood on 3 March 1990.

1992

Caltex Pacific Indonesia obtained a 20-year extension to its production sharing agreement with Indonesia to operate the Rokan block until 2021.

1995

Caltex implemented the Strategic Business Unit management system in 1995.

1997

Caltex completed the Dumai Main Office in May 1997.

2000

Chevron acquired Texaco in October 2000.

2002

Caltex handed over the Coastal Pekanbaru Plain (CPP) block which it had acquired in 1971 to PT Bumi Siak Pusako – Pertamina Hulu on 18 August 2002.

The new operator is a joint operation body between PT Bumi Siak Pusako (BSP) which is owned by the local government in Riau and Pertamina. 

2005

With the acquisition of Texaco by Chevron, Caltex Pacific Indonesia was renamed Chevron Pacific Indonesia in September 2005.

Chevron Pacific Indonesia came under the umbrella of Chevron IndoAsia Business Unit in 2005 along with Chevron Indonesia Company (ex-Unocal Indonesia Company), Chevron Makassar (the Makassar Deepwater Project), Chevron Geothermal Indonesia (Ex-Unocal geothermal projects in Darajat and Salak), Mandau Cipta Tenaga Nusantara, and Chevron Geothermal Philippines.  

2008

Chevron Pacific Indonesia marked the 11th billion barrels of oil produced from its Sumatra operation in 2008.

2010

Chevron Pacific Indonesia handed over the operatorship of the Langgak block to PT Sarana Pembangunan Riau in January 2010.

2018

With the help of the successful steam flood, the Duri field’s cumulative oil production reached 2.6 billion barrels in 2018.

Total cumulative oil production of CPI from all fields reached 13 billion barrels.

2021

Chevron Pacific Indonesia hands over the prolific Rokan block to Pertamina Hulu Rokan on 8 August 2021. Rokan block with an area of 6220 KM2 is the largest oil concession block in Indonesia. Stretching over five “kabupaten” (regencies) in central Sumatera it produced oil from more than 12000 wells located in 80 fields. It also operates one of the biggest and most successful steam floods in the world.

The top ten producing oil fields in the Rokan block are Minas, Duri, Bangko, Bekasap, Balam South, Kotabatak, Petani, Pematang, Petapahan, and Pager.

Although the total oil production from the Rokan block has come down to 160,000 barrels per day, it is still a very significant oil asset for Indonesia as it is contributing 24% of the country’s total oil production according to SKK Migas.

Presidents of Caltex Pacific Indonesia Since 1963

One of the keys to success of CPI is its adaptability. The company took initiatives to work well with both the central government of Indonesia and the local government and the communities.

Caltex Pacific Indonesia decided in 1963 to Indonesianize the company. It appointed Mr. Julius Tahija as the first native Indonesian as the company president. All its subsequent presidents have been Indonesians.

Here are the past presidents of Chevron Pacific Indonesia since 1963:

1. Julius Tahija, President & Chairman of the Board of PT Caltex Pacific Indonesia (1963 – 1977)

2. Haroen Al Rasjid, President & Chairman of the Board of PT Caltex Pacific Indonesia (1977 – 1993)

3. Baihaki Hamid Hakim, President & Chairman of the Board of PT Caltex Pacific Indonesia (1993-1999)

4. Humayunbosha, President of PT Caltex Pacific Indonesia (1999-2004),

5. W. Yudiana Ardiwinata, President of PT Chevron Pacific Indonesia (2004-2005),

6. Suwito Anggoro, President of PT Chevron Pacific Indonesia and Deputy Managing Director Indonesia Business Unit (2005-2010),

7. Abdul Hamid Batubara, President of PT Chevron Pacific Indonesia and Deputy Managing Director Indonesia Business Unit (2010-2014),

8.Albert B. M. Simanjuntak, President of PT Chevron Pacific Indonesia and Deputy Managing Director IBU (2014-2021),

Epilog

Although the signboard with a Caltex logo will no longer be seen at the entrance of Rumbai camp, the company will continue to be remembered by people who have worked for the company and the people who have lived in the surrounding communities.

Caltex will be remembered not just for what it did in the oil fields, but it will also be remembered for what it did for the surrounding people and communities.

Here are some of the most notable legacy of Caltex:

  1. Building the first state senior high school (SMAN-1) in Pekanbaru in 1957
  2. Completion of the 350 meter-long bridge over the Siak River in 1977.
  3. Establishing the polytechnic college – Politeknik Caltex Riau in 2001.

This article is written by Jamin Djuang. He had been in Rumbai and Duri conducting training for Caltex and traveled the private road connecting Rumbai and Duri. He enjoyed eating in the Caltex cafeteria in Rumbai where it served both delicious Indonesian and western food.

Some of the information in this article was provided by Mr. Elthaf who worked for CPI in Minas field for 36 years.

Oil and Gas Activities in Indonesia in 2020

The upstream oil and gas industry of Indonesia invested 10.21 billion US dollars and performed well in 2020 according to SKK Migas, the special task force in charge of upstream oil and gas activities of oil companies in Indonesia.

The oil and gas industry of Indonesia successfully met and even exceeded some of the 2020 targets that were set by the Indonesian government in the following key areas:

  1. Reserve Replacement ratio (RRR).
  2. Oil lifting
  3. Controlling the cost recovery
  4. Revenue intake by the government
  5. Completion of oil and gas projects

RESERVE REPLACEMENT RATIO

The reserve replacement ratio in 2020 is 101.6%. The oil industry added 705 MMBOE of reserve in 2020.  

OIL AND GAS PRODUCTION

The average daily oil lifting in 2020 is 706,000 BOPD. This exceeded the government target of 705,000 BOPD.

However, daily gas production in 2020 is 5461 MMSCFD. This is below the government target of 5556 MMSCFD.

COST RECOVERY

The amount of cost recovery in 2020 is US$ 8.12 billion which is in line with the government expectations.

OIL REVENUE TO GOVERNMENT

The oil industry contributed US$ 8.4 billion of revenues to the Indonesian government. This amount is 41% higher than the expected amount of US$5.86 billion.

COMPLETION OF EXPLORATION AND PRODUCTION PROJECTS

Fifteen oil and gas projects went on stream in 2020. These new projects added 9182 barrels of oil per day and 111 million SCF of gas per day.

3199 Km of 2D seismic and 1251 Km2 of 3D seismic surveys were completed in 2020.

SKK Migas was active and running in 2020 to keep the oil and gas exploration and production activities at a high level. Here are some of the key actions that SKK Migas undertook in 2020: 

  • SKK Migas signed twenty-four PSC side letters and sixty-one letters of agreement (LoA).
  • The government reduced the prices of gas sold to domestic companies to stimulate economic growth.
  • Allowing oil and gas operators to delay topping up the Abandonment and Site Restoration fund.
  • Eliminating the costs to oil operators of using government assets in their exploration and production activities.
  • Allowing oil companies to accelerate asset appreciation.
  • SKK Migas and Chevron Pacific Indonesia signed the Heads of Agreement to ensure the continuity of a high level of activities such as well drilling and production optimization in the Rokan Block during the final phase of the PSC contract. Chevron will hand over the operatorship of The Rokan block to Pertamina when its production sharing contract expires in August 2021.
  • SKK Migas approved the Plan of Development (POD) submitted by Repsol for the development of the huge Kaliberau gas field having 445 billion SCF of gas reserve in the Sakakemang block. The total investment in this project is estimated at 359 million US dollars.

PERFORMANCE OF THE OIL AND GAS OPERATORS IN 2020

Here are the top nine oil and gas operators who exceeded their oil production targets in 2020.

  • Chevron Pacific Indonesia
  • Pertamina Hulu Mahakam
  • Pertamina Hulu Energi ONWJ  
  • Pertamina Hulu Energi OSES
  • Petrochina International Jabung
  • Medco E & P Natuna
  • Pertamina Hulu Sanga Sanga
  • Medco E&P Rimau
  • JOB Pertamina – Medco Tomori Sulawesi

Here are the top nine oil and gas operators who exceeded their gas production targets in 2020.

  • BP Berau
  • Pertamina Hulu Mahakam
  • Eni Muara Bakau BV
  • JOB Pertamina – Medco Tomori Sulawesi
  • Premier Oil Indonesia
  • Petrochina International Jabung
  • Medco E & P Natuna
  • Kangean Energi Indonesia
  • Pearl Oil (Sebuku)

EXPLORATION AND PRODUCTION TARGETS FOR 2021

Being optimistic that Indonesia will meet the target of 1 million BOPD and 12 BSCFD of gas by 2030, SKK Migas is committed to keeping oil and gas production high in 2021. Here are its ambitious targets for oil and gas activities in 2021:

  • Daily oil production – 705,000 BOPD. This is the same target as in 2020.
  • The number of exploration wells – 43. This is a significant increase from 28, the actual number of exploration wells drilled in 2020.
  • The number of development wells – 616. This target is much higher compared with the 240 development wells drilled in 2020.
  • Number of workovers – 615
  • Number of well services – 26,431
  • 2-D seismic survey – 3569 Km
  • 3-D seismic survey – 1549 Km2

The Indonesian oil industry performed well in 2020. Mr. Dwi Soetjipto, the head of SKK Migas said: “The year 2020 was a difficult year for many oil operators due to the Covid 19 pandemic and the low oil prices. Nevertheless, the oil industry of Indonesia was able to meet several targets set by the government. Hopefully, this will help the country’s economy.”

This blog article is adapted from “Kinerja Hulu Migas Gemilang Sepanjang 2020” published by SKK Migas on 4 January 2021.

This article is adapted from SKK Migas news by Jamin Djuang – Chief Learning Officer of LDI Training.

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. However, the exploration drilling was interrupted due to the onset of the World War 2. After the war ended, CALTEX managed to obtain the approval from the newly formed government of Indonesia to operate in the Rokan block under a work contract scheme. Eventually, oil production from the Duri field began in February 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.