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Petramina doubles down

on upstream targets

Despite the raft of challenges that COVID-19 has presented the
upstream, the state-owned major is confident not only that it

can keep production stable but that it can bolster its RRR efforts

COMMENTARY INDONESIA’S state-owned Pertamina outlined Pertamina’s vice-president for corporate
plans this week not just to keep production sta- communication, Fajriyah Usman, said a persis-
ble but also to boost its reserve replacement ratio tent challenge for the upstream had been the fact
WHAT: (RRR) significantly. that falling global demand for fuel, amid abun-
Pertamina has unveiled a The company said on September 1 that dant crude and oil product supplies, had led to a
new upstream strategy. despite the ongoing challenges presented by collapse in prices.
the coronavirus (COVID-19) pandemic, it still The company has been striving to keep oper-
WHY: intends to meet this year’s oil and gas produc- ations stable, while still adapting to the new nor-
The government is tion targets. The goal was announced just days mal the pandemic has created. She said: “Until
worried about energy after Pertamina revealed that it had recorded a July, despite conditions requiring cost and
security. first-half net loss of $767.92mn, compared with efficiency optimisation, in general Pertamina’s
a $659.96mn net profit a year earlier. upstream performance continues to run well,
WHAT NEXT: Despite the performance hit, the company with the completion of eight exploration wells,
Persistently low oil prices cannot afford to slow down its development 182 production wells and 362 workover works.”
may hamper upstream agenda given government pressure to ensure Indeed, upstream unit Pertamina Explora-
efforts. the country’s long-term energy security even as tion Production (Pertamina EP) struck oil and
private investors slash their upstream budgets. gas in the West Java Basin thanks to the Akasia
Prima-1 (AKP-1) and Wolai-002 wells in Central
Challenges Sulawesi.
Pertamina said it had overcome severe upstream Fajriyah said that while the company was
challenges to deliver 875,000 barrels of oil equiv- adapting to the triple shock of declining energy
alent per day (boepd) in the first half of this demand, the rupiah’s depreciation and vola-
year. The volumes came from both foreign and tile crude prices, it remained confident that it
domestic assets and were, according to the devel- could avoid making any of its 1.2mn workforce
oper, equivalent to 98% of its government-set redundant.
target. She said the company aimed to do this by
Crude production amounted to 410,000 focusing on both general upstream operations
barrels per day (bpd), while natural gas out- as well as several strategic projects, including
put reached 2.69bn cubic feet (76.18mn cubic the Balikpapan Refinery Development Mas-
metres) per day. ter Plan (RDMP) project, the Trans Pacific

Week 35 03•September•2020 www. NEWSBASE .com P5