PT Pertamina estimates the production will be 910 thousand barrels of oil equivalent per day (MBOEPD) this year - Photo: Pertamina

JAKARTA (TheInsiderStories) – Indonesia fuel company, PT Pertamina granted investment from Abu Dhabi and Taiwan investors to build a petrochemical plant in Balongan Refinery, Indramayu of Rp100 trillion (US$7.14 billion), said Pertamina’s CEO to the media when meeting West Java’s Governor in Bandung, Wednesday (11/27).

Pertamina’s CEO Nicke Widyawati said that the project needs four to five years to complete. They will employ 30,000 to 35,000 local residents and a hundred technicians during the plant’s building.

The investment will be used to build the petrochemical plant that integrated with an existing oil refinery. The capacity of the refinery will be upgraded with petrochemical in it and become the biggest integrated petrochemical plant.

She asserted, Balongan refinery has produced oil 125,000 barrels per day and will upgrade to 350,000 barrels per day after the plant completed. While the petrochemical plant will produce 2.5 million naphthas.

Furthermore, to complete the plant, Widyawati met West Java’s Governor Ridwan Kamil to request license and location placement. As planned, the project will begin at the beginning of 2020 and will operate in 2026.

Meanwhile, Kamil promised he will simplify the investment and the building of the plant. He also appreciated the plant’s building that absorbs 30,000 to 35,000 human resources so it will impact significantly to local welfare.

Kamil also plans to upgrade the status of the Balongan Refinery to be a special economic zone (SEZ). Therefore, the government will be easier to support the building of the project.

On the other hand, Pertamina will allocate at least $3.7 billion to develop its upstream sector next year, from the total 2020 budget of $7.8 billion. It includes in the form of exploration and development of work areas managed by Pertamina.

“Starting next year, 60 percent of capital expenditure is for developing upstream assets that we manage,” Widyawati said.

Widyawati claimed to get offers from several oil and gas companies interested in managing the Mahakam Block. Even so, she did not want to disclose information related to companies that have submitted an interest in the block. But the director said Pertamina needed partners in the block.

Moreover, block production continues to decline from year to year. Production decreased even when Pertamina began managing the Mahakam Block in 2018. Widyawati claimed the decline in natural production at the block at that time reached 57 percent. This is because of the realization of drilling in 2017 only amounted to four wells.

When taking over the management of the block, Widyawati claimed that Pertamina carried out massive development well drilling. In 2018, the state-owned oil company has drilled 76 wells and this year 122 wells.

For next year, Widyawati said the company will drill 122 development wells and two exploration wells in Tunu and Peciko Field. The company is in the process of procuring a rig for good drilling activity.

In the Pertamina report, the Mahakam Block oil and condensate production in 2017 dropped to 46,420 barrels per day (bpd). Even though in 2015 its production could reach 69,908 bpd.

US$1=Rp14,000

Written by Staff Editor, Email: theinsiderstories@gmail.com