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Pertamina may farm in to expiring Rokan contract
PROJECTS & COMPANIES
INDONESIA’S state-owned Pertamina may farm in to the nearly expired contract for the Rokan oilfield in order to begin drilling opera- tions before its own licence for the block begins in 2021.
Pertamina is set to assume the block’s oper- atorship from Chevron in 2021 after the state company outbid the US super-major for the block in 2018. Pertamina paid a $784mn signing bonus for the licence in December 2018.
The Indonesian developer is eager to get a jump on development operations earlier, however, and has been talking to Chevron since early last year about being able to start drilling work early.
“We are interested as we set up efforts to maintain production levels throughout the handover period,” Pertamina corporate secre- tary Tajudin Noor told Reuters on January 22.
Noor did not say how much equity Pertamina was interested in buying, but said the company wanted enough to be able to “drive the necessary investment”.
Pertamina upstream director Dharmawan Samsu told reporters on January 3 that the com- pany wanted to start drilling in Rokan in the third quarter of this year.
“This transition period is very important. We really hope we can start drilling in 2020 to main- tain stability of production and control [the] natural decline rate [after takeover in 2021],” the executive said at the time. However, these com- ments echoed similar sentiments expressed in January 2019 when Samsu said Pertamina hoped to start drilling that year.
Pertamina is eager to start work on the block as early as possible, given mounting concerns over the output potential of the country’s sec- ond-largest oil producing acreage. The chairman of upstream regulator SKK Migas, Dwi Soetjipto, told reporters on December 17 that the impend- ing transition of operatorship could see produc- tion fall more than 15% year on year in 2020 to 161,000 barrels. Production in the first half of 2019 was almost 191,000 bpd.
Rokan’s production issues are part of a wider downward trend in Indonesian production in recent years. Soetjipto told reporters on January 9 that production might only achieve 705,000 bpd, short of the government’s target of 755,000 bpd. Crude output in 2019 amounted to 746,000 bpd, down from 772,000 bpd produced in 2018.
There was some good news this week from the state company, however, with the news that one of its upstream divisions had increased its output in 2019.
Pertamina EP reported last week that pro- duction had expanded from 79,690 bpd in 2018 to 82,179 bpd in 2019, which was 99.6% of the government’s target. Revealing the company’s annual production results in a House of Rep- resentatives hearing on January 20, however, Pertamina EP president director Nanang Abdul Manaf said natural gas production had dipped from 1.02bn cubic feet (28.89mn cubic metres) per day in 2018 to 750mn cubic feet (21.24 mcm) per day. The executive revealed that the company had struggled in the face of the “gas price opti- misation policy” as well as several unplanned shutdowns throughout the year.
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w w w. N E W S B A S E . c o m Week 04 29•January•2020
