Indonesian energy producer PT Pertamina and Malaysian Petroliam Nasional Berhad (Petronas) agreed to work together in developing the oil and gas business and its derivatives in the both countries and abroad - Photo by Pertamina

JAKARTA (TheInsiderStories) – Indonesian energy producer PT Pertamina and Malaysian Petroliam Nasional Berhad (Petronas) agreed to work together in developing the oil and gas business and its derivatives in the both countries and abroad.

In a written statement released today (02/26), Pertamina Director of Investment Planning & Risk Management, Heru Setiawan, stated that the synergy between the two companies was a realization of the Government to Government collaboration that had been established before.

“This MoU is an umbrella for building mutually beneficial business synergies between the two companies. This collaboration includes strategic and operational cooperation,” he said, shortly after the signing of the agreement between Pertamina and Petronas in Kuala Lumpur, Malaysia.

According to him, both parties will explore the possibilities of cooperation starting from the upstream to downstream fields, trade in a number of oil and gas products and derivatives (condensate and petrochemicals), and renewable energy. The collaboration that will be carried out is not only located in Indonesia and Malaysia, but in other countries such as oil processing in East Asia and joint exploration of business opportunities on other continents.

In the trade sector, the two companies agreed to exchange crude oil between production parts in Malaysia (Kikeh, Kimanis and Kidurong Fields) with production parts in Indonesia (Jabung and Ketapang Fields).

“In order to provide energy for the future, we still have a lot to do together. This MoU is one of the right steps to realize national energy resilience and independence,” he concluded.

Pertamina budgeted investment funds of US$2.73 billion in 2019 to develop several projects across the nation. The amount smaller than 2018 which amounted to $2.9 billion.

Dharmawan Samsu, upstream director of Pertamina, said the funds will distributed to work on several project in Kalimantan such as Mahakam, Sanga-Sanga, Simenggaris, Nunukan, East Kalimantan and Attaka block, as well as asset  five areas operated by PT Pertamina EP.

In details, the investment of PT Pertamina EP Cepu amounted to $310 million for the Tiung Biru Jambaran project, PT Pertamina Hulu Energi for $448 million to drill 45 wells and 13 exploration wells, and the Mahakam Block is $1.8 billion for drilling 108 wells. While for upstream oil and gas invested $2.3 billion, and the remaining $153 million for geothermal energy.

In 2018, Pertamina was produced 768 thousand barrels of oil equivalent per day (BOEPD), or 42 percent higher than 2017 realization at 542,000 BOEPD during 2018. He elaborated, of the total productions, oil output recorded 291,000 BOPD, or up 22 percent compared to the 201 of 238,000 BOPD.

While, gas production recorded at 2,763 million cubic feet per day (MMSCFD), or rise 57 percent from 2017 which was 1,760 MMSCFD. He said, this increase caused by a combination of the success efforts to increase production and stifle the rate of decline in production from existing assets.

In addition, he continued, several termination working areas have been entered into Pertamina’s production system, such as ​​Mahakam block, Sanga-Sanga block, East Kalimantan block, and Offshore South East Sumatra block.

He said, in 2019, Pertamina will maintain domestic oil and gas production of 758 MBOEPD, with details of 302,000 BOPD oil and 2,643 MMSCFD gas.

In addition, Pertamina is also directed at minimizing production losses by maintaining the integrity of production facilities, increasing operational cost effectiveness, and developing technological innovations that are in line with field needs.

Pertamina also intends to increase upstream assets abroad with production target of 112,000 BOPD and 300 MMSCFD in 2019, where the increase in investment to $174 million from a year ago $110 million.

Its Expected, the increase in production target could rising the crude oil lifting to be taken to the Pertamina’ refinery in Indonesia, as many as 8 million barrels from the previous year of 6.5 million barrels. While, the state-owned company targets in geothermal production of 4,551 GWh.

In the current year, Pertamina also plans to settle Rokan Block transition operation to boost the production. Pertamina also plans to replace the distribution pipe and drill wells with PT Chevron Pacific Indonesia to maintain the risk of leakage.

In addition, Pertamina has again formed a new subsidiary to specifically manage the Rokan Block, the largest national oil producing block, by PT Pertamina Hulu Rokan, which will later play a role in transitioning the management transfer from Chevron to Pertamina.

While Petronas has several projects in Indonesia namely Bukit Tua Block and North Madura in East Java. Established in 1974, the Malaysia’ fully integrated oil and gas multinational ranked among the largest corporations in the world.

The key projects of Petronas in Malaysia such as Pengerang Integrated Complex and Sabah Ammonia Urea. Beside, the company also manage upstream and downstream projects globally.

by Linda Silaen, Email: linda.silaen@theinsiderstories.com

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