Page 11 - AsianOil Annual Review 2021

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The Cepu block is the country’s lagrest oil producer.

SKK Migas has been spurred into action Potential problems
after the government made it all too clear that it The minister expressed concern about both the
wanted greater action from the industry. Cepu and Rokan blocks, which are the country’s
largest and second-largest oil producers respec-
Do more tively. While issues surrounding the change of
Indonesian Energy Minister Arifin Tasrif operatorship at Rokan later this year, and the
urged the industry to work harder to help subsequent knock-on effect it may have on pro-
bridge the gap between production and gov- duction, have been widely reported upon, it was
ernment targets. Tasrif’s comments about Cepu’s main field that
“The realisation of drilling activities and proved most surprising.
the realisation of projects that are planned to The minister tasked ExxonMobil, the oper-
increase production in 2021 are the spearheads ator of the Cepu block, to find a solution to the
of increasing short-term production,” Tasrif said faster than expected production declines at the
on April 6. Banyu Urip field. He cited the US super-major’s
While SKK Migas head Dwi Soetjipto acknowl- upstream expertise as reason for the govern-
edged on April 6 that there were a number of obsta- ment’s expectation.
cles that had led to the missed production target, “The decline in production can be postponed
he remained upbeat about government efforts to again. The potential for the work area is still
encourage new investment. there,” Tasrif said, without providing any details
He noted that tax breaks had been extended on production itself.
to both the Mahakam and South Natuna Sea At Rokan, meanwhile, Tasrif called for the
Block B (SNSBB) to help their development transition to be managed properly. He said: “In
economics, while noting that tax breaks were this case, Chevron Pacific Indonesia [CPI] and
also being discussed for the Sanga Sanga, East Pertamina Hulu Rokan must work hand in hand
Kalimantan and Attaka blocks. No other details to discuss and complete various processes for the
were revealed. transfer of the Rokan block.”
Production at the giant Mahakam gas block With the handover slated for August,
has been in decline since state-owned Pertam- reports emerged in February that Pertamina
ina took over as operator from France’s Total was still struggling to secure Chevron’s specif-
and Japan’s Inpex in January 2018. The block ically developed formula for chemicals used in
produced 1.26 bcf (35.68 mcm) per day of gas the block’s enhanced oil recovery (EOR) oper-
in 2017, before shrinking to 624mn cubic feet ations. Moreover, two years of talks between
(17.67 mcm) per day in the first half of 2020. the two companies over Pertamina’s early
Local oil and gas developer Medco Energi access to the field to begin drilling operations
Internasional, meanwhile, acquired Inpex and yielded nothing.
super-major ConocoPhillips’ stake in SNSBB in The government has set an ambitious tar-
2016-2017. get of producing 1mn bpd of oil and 12 bcf
Underscoring the government’s unease with (339.84 mcm) per day of gas in 2030. But
the current direction of the upstream, Tasrif did SKK Migas’ struggle to halt current output
not stop at vague directives to the entire indus- declines, as well as Tasrif ’s early warning
try to do more, but opted to single out individual sign over Cepu, suggests Jakarta needs a
companies and specific projects for attention. much more conservative target.™

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