JAKARTA (TheInsiderStories) - PT Chevron Pacific Indonesia and Special Task Force for Upstream Oil and Gas Business Activities (SKKMigas) signed a head of agreement for Rokan Block in Riau, said the head on Monday. The deal have signed on Sept. 28 and will begin to drill on November.
The head of SKK Migas, Dwi Soetjipto, said the signing was ensured the continuation of Chevron’ investment in the block until the management was transferred in August 2021 to state-owned energy firm, PT Pertamina. Earlier the American firm has prepared US$152 million to develop the project.
Former CEO of PT Semen Indonesia Tbk and Pertamina, said that in this agreement, Chevron received clarity regarding the investment returns. The government hopes that through this investment, Rokan Block production continues.
“The commitment of Chevron and SKK Migas is expected to realize what has been agreed to achieve the production targets on the 2021 State Budget,” said the energy and mineral resources minister, Arifin Tasrif, in official statement.
The Rokan block is the largest oil block in Indonesia with an area of 6,220 kilometers. This block has 96 fields with three fields having good oil potential, namely Duri, Minas and Bekasap.
President Director of Chevron, Albert Simanjuntak, stated, “This agreement is the result of a strong and collaborative partnership with the government and ensures that this strategic block will continue to play an important role in Indonesia’ energy sovereignty for years to come.”
After the signing, the next stage is finalizing the implementation details targeted in the next few weeks. This step is part of the drilling implementation effort in November. In the first stage, Chevron will drills 11 wells and next year will continue to 93 wells plus 11 converted wells.
He stated, “The eleven wells its expecting could produces 3,000 barrels per day (bpd) and in 2021 the production is around 9,000 bpd,” he told the reporters today.
Earlier, the oil and gas producer rejected the government order to keep the production of Rokan block before the contract ended. The company rejected the order, caused according to Simanjuntak, the step was considered uneconomical.
After the contract ends, the giant block in Riau province, will be taken over by Pertamina. The CEO, Nicke Widyawati, has urged Chevron to involve her companies in the transition period to maintained the wheels’ production capacity.
Tasrif also expressed his hope that the US producer would maintain the production of Rokan block. He asserted if there were things that had not been agreed upon, his side requested that the Cooperation Contract Contractor could respond to the decline in production.
The block is one of Indonesia’ mainstay oil fields. Previously, this block had succeeded because of its highest oil production among other oil and gas blocks. The block covers an area of 220 kilometers with more than 96 oil wells. Three of them have great oil potential, namely Duri, Minas and Bekasap wells.
From Pertamina’ data, Rokan‘ oil production has indeed declined, from 338,000 barrels bpd in 2012 to 190,000 bpd in 2019. The number of drilling activities in the Rokan block fell from 625 drilling in 2014, to 280 drilling in 2015, then 119 drilling in 2016, and finally 0 drilling in 2019.
The oil and gas holding company, predicts that in August 2021, when Rokan is transferred to Pertamina, the average production figure will be around 140,000 bpd. Now, the state-run energy holding now in talks with several companies have expressed interest on the block.
Written by Editorial Staff, Email: theinsiderstories@gmail.com
