OIL AND GAS INVESTMENT DAY

OIL AND GAS INVESTMENT DAY – JUNE 17, 2021

Pre-Event of the IPA Convex 2021

IPA was holding a collaborative event with The Ministry of Energy and Mineral Resources (ESDM), and the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), namely “Oil and Gas Investment Day”, on Thursday, June 17, 2021, at the Sarula Room, Chairul Saleh Building, Ministry of Energy and Mineral Resources, Jalan Medan Merdeka Selatan no. 18, Central Jakarta. 

The event was attended by Bapak Arifin Tasrif, the Minister of Energy and Mineral Resources, Bapak Tutuka Ariadji the Director General Oil and Gas (Migas), Bapak Ego Syahrial, the Secretary General of ESDM, Bapak Dwi Soetjipto, Chairman of SKK Migas, and Bapak Gary Selbie, the President of Indonesian Petroleum Association (IPA), as well as some CEOs of national and international oil and gas companies.

The purpose of the event was to support the government to create an attractive investment climate in order to achieve the oil production target of 1 million barrels of oil per day (1MBOPD) and 12 billion standard cubic feet per day of natural gas (12BCFD) by 2030.

The event was held both offline and online. The event was virtually held through a zoom webinar (total of 410 participants) and YouTube live streaming (total of 180 participants)

The agenda for the event are:

1. 

The Opening remarks

2. 

Signing of the Upstream Oil and Gas Strategic Agreement

3. 

Offering Result of Seismic Survey with G&G Data

4. 

Announcement of Offers for Phase I Oil and Gas Working Areas 2021.

5. 

Press Conference

1.

The Opening Remarks

The opening of the event began with listening to the national anthem Indonesia Raya, at 08:02 BBWI.  The President of IPA Bapak Gary Selbie then gave his report, followed by Opening Speech from Bapak Arifin Tasrif, Minister of Energy and Mineral Resources of the Republic of Indonesia.

In his report, Bapak Gary Selbie stated that this event was a momentum for investors to be able to hear more about the latest progress on upstream oil and gas investment in Indonesia. IPA believes that the prospects for Indonesia's upstream oil and gas industry remain very positive with several new basins and exploration targets in many parts of Indonesia.  “As well as having the opportunity to witness important signings between the government and various oil and gas investors. We are also honoured to hear from Mr. Tutuka, Director General of Oil and Gas, about the tender process for several new oil and gas blocks that will soon be opened,” he said.

In his opening speech, Minister Arifin Tasrif said that : "We have to build awareness that we are competing with other oil-producing countries around the world for investment and therefore we must improve our investment climate”, and also explained that the Government of Indonesia will launch new Terms and Conditions that are expected to be more competitive and make the Auction Round a success this year to improve the investment climate and attract investors.

2.

Signing of the Upstream Oil and Gas Strategic Agreement

To summarize:

A.

Submission of Approval for the Revised Development Plan (POD) of Pertamina Hulu Mahakam (PHM) with fiscal incentives based on Government Regulation (PP) No. 27 of 2017. This is the first production field to be given fiscal incentives based on PP 27 of 2017

The Mahakam Incentive Package is given in accordance with the provisions stipulated in PP 27 of 2017 and consists of:

•

Relaxation of First Tranche Petroleum (FTP)

•

Provision of investment credit

•

Unbilled VAT facilities and reduction of Land and Building Tax (LBT/PBB) for subsurface activities

•

Exemption of rental fees for the use of State Property (BMN)

B. 

Amendment to the Plan of Development (POD) for Coal Bed Methane (CBM) using the Gross Split scheme in the Tanjung Enim Block.

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This is the first time the Gross Split scheme has been applied to non-conventional oil and gas (CBM) production blocks. The change in the Cooperation Contract (KKS) from the Cost Recovery scheme to the Gross Split scheme was approved on May 4, 2021 by the Minister of Energy and Mineral Resources.

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The Tanjung Enim PSC was first signed in 2009. The Tanjung Enim CBM PSC contractors consist of Dart Energy Operator (Tanjung Enim) Pte. Ltd. (“Dart Energy”) and its partners, PT Bukit Asam Metana Enim (BAME) and PT PHE Metra Enim.

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Until 2018, the Tanjung Enim CBM PSC has carried out several exploration activities, including the drilling of 13 exploration wells (consisting of core wells and production wells). Based on subsurface exploration and evaluation data, Areas A and B have CBM reserves of 127.93 BSCF from the Muara Enim Formation.

C.

Gas Sales Agreement

This signing is part of Indonesia's upstream oil and gas milestones to support the development of fertilizer factories and oil lifting

1. 

Signing of a Memorandum of Understanding (MoU) between Genting Oil Kasuri Pte Ltd (GOKPL) and PT Pupuk Indonesia, for the development of the Ammonia-Urea and Methanol Project in Bintuni

The signing of the HoA proves the Government of Indonesia's great support for natural gas development in the eastern region, especially in the Papua region. This agreement will guarantee the utilization of natural gas of approximately 1.66 Trillion Cubic Feet (TCF) from the Asap, Kido and Merah fields for the Ammonia, Urea and Methanol Plants established by PT Pupuk Indonesia and its subsidiaries. This project will promote regional economic development in the province of West Papua, particularly the creation of new jobs and increased regional investment opportunities. This project is estimated to be onstream in 2025 with the daily supply for Ammonia Urea is 112.6 MMSCFD and for Methanol is 109.3 MMSCFD.

2. 

The signing of the MOU between PetroChina International Jabung Ltd (PIJL) and:

a.

PT Pupuk Sriwidjaja (Pusri) for the development of the Pusri-3B Project which is estimated to be onstream in 2036 with a daily supply of 60 BBTUD; and

b.

Pertamina Hulu Rokan (PHR) for gas supply for Steam Flood operations in the Rokan Block with a daily supply of 50 BBTUD which is estimated to be onstream in 2023.

3. 

The signing of the MOU between Repsol Sakakemang B.V and

a.

PT Pupuk Sriwidjaja which is estimated to be onstream in 2024 with a daily supply of 38 BBTUD; and

b.

PT Pertamina Hulu Rokan (PHR) with a daily supply of 15 BBTUD.

4. 

The signing of the MOU between Kangean Energy Indonesia (KEI) and PT Petrokimia Gresik (PKG) which is expected to be onstream after 2027

D.

Signing of Cooperation for Upstream Oil and Gas Exploration, between ENI Indonesia and SKK Migas (Merakes)

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Oil and gas exploration in Indonesia still has huge potential, therefore with this technology collaboration, SKK Migas hopes to have new oil and gas prospects. In recent years ENI has recorded a number of exploration successes with the discovery of significant volumes of hydrocarbons due to its innovative approach to exploration through cutting-edge technology.

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This cooperation or MOU aims to identify and evaluate potential collaborations related to the field through the exchange of information, data and ideas, and to determine a specific framework for its possible implementation in Indonesia.

3.

Offering Result of Seismic Survey with G&G Data:

From Firm Commitment of PHE Jambi Merang (JM) to Possible Cooperation of Joint Studies in New Exploration Area

In his speech Pak Nanang Abdul Manaf amongst other mentioned:

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2D Seismic Survey for fulfilling firmed commitment PHE Jambi Merang was commenced on 20^th November 2019 and completed on 3^rd August 2020 with the length of survey realization as of 32,215 Km Offshore or 107% compared to original plan as of 30,000Km, comprising Bone -Tukang Besi, Papua, Maluku, Bangka, and East Natuna Areas.

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2D Seismic Processing and Interpretation as of114 lines was completed on 1^st March 2021 and identified several interested/potential areas.

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There are 3 interested areas, where one of them have already signed the JSA between PHE and Posco International Corporation, 1 JS is ongoing progress by PHE and 1 more interested area is on-going process for JSA signing.

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There are still big opportunities for other companies interested to conduct Joint Study with PHE based on latest seismic data.

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Firmed Commitment of PHE JM in open area is a good model and also applicable to other companies for boosting exploration campaign in the future.

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There is no way to maintain oil & gas production and reserves except doing Exploration, Exploration and Exploration.

4.

Announcement of Offers for Phase I Oil and Gas Working Areas 2021.

The government continues to strive to make the auction of oil and gas working areas (WK) more attractive, namely by improving the terms and conditions, such as increasing the contractor's profit sharing taking into account the block risk factor, Open Bid Signature Bonus, FTP 10%, application of 100% DMO prices during the period of time. contracts, flexibility of the Cooperation Contract (Cost Recovery or Gross Split) scheme, new release provisions (no obligation to release part of the area in the 3rd year of the contract), easy data access through the Migas Data Repository (MDR) membership mechanism, as well as incentives and tax facilities in accordance with applicable laws and regulations.

There are 6 oil and gas Working Areas being offered, consisting of 4 Working areas through the Direct Offer mechanism and 2 Working Areas through the Regular Auction mechanism.

A.   Four Working Area through the Direct Offer mechanism are:

B.  Two Working Area through the Regular Auction mechanism are:

The government invites domestic and foreign companies (BU/BUT) in the upstream oil and gas business sector that have financial and technical capabilities, and have the abilities: to meet the requirements for a definite commitment of at least 3 years, to meet the terms and conditions of the tender work area, as well as good performance and track record, to participate in the first round of the 2021 Indonesia Oil and Gas Working Area Auction, with the following schedule:

A. Direct Offer

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Document Bid Access: 17 June 2021 - 28 July 2021

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Submission of Participation Documents: 28 July 2021 - 30 July 2021

B. Regular Auction

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Document Bid Access: 17 June 2021 - 12 October 2021

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Submission of Participation Documents: 12 October 2021 - 14 October 2021

Interested companies can register and access the Bidding Documents through the e-tender website: https://esdm.go.id/wkmigas according to schedule.

5.

Press Conference

The event was closed with a press conference and Q&A session which was participated by the  Director General of Oil and Gas, the Head of SKK Migas, the President of IPA, the Directors of Upstream Oil and gas, and some of the journalists in the related media