Global oil price tumbled by 7 percent amid a surge in new COVID-19 cases in Europe and the block' continued challenge with vaccinations - Photo by Pertamina

JAKARTA (TheInsiderStories) – Energy producer, PT Pertamina and Eni S.p.A, an Italian multinational oil and gas company, has recalled the cooperation plans to explore downstream projects in Indonesia. Last year, both has signed an agreement to build green refinery based on crude palm oil (CPO) also business trading opportunities in oil and gas, and other products.

Pertamina’ CEO, Nicke Widyawati, conveyed the statement at the hearing with parliament today (01/29). She explained, Eni required international certification for the CPO and the oil would not processed in Indonesia.

Earlier, through the cooperation could helped the state-owned firm’ commitment in fulfilling green-fuel and optimizing the country’ resources to secure national energy resilience and sovereignty. Its also relevant with Pertamina’ commitment to supply fuel with a mixture biodiesel, as mandated by the Indonesian government.

Eni has been present in Indonesia since 2001, conducting operations of exploration and production. Today production derives from Muara Bakau block (Eni’ interest 55 percent) where Jangkrik field started-up in 2017.

Eni has get approval on the Plan of Development for the Merakes field located in the East Sepinggan PSC in the Makassar Strait, East Kalimantan.

Minister of energy and mineral resources (MEMR) has granted the approval just three months after the submission of the plan and less than eleven months after Eni started production from its deep water operated asset in Indonesia, the Jangkrik fields complex in the Muara Bakau PSC.

The Merakes field that is estimated to hold about 2 trillion cubic feet of lean gas in place is located in 1,500 meters water depth, 35 kilometers South West of the Jangkrik Floating Production Unit. The field has been discovered by the Merakes 1 well in 2014 which encountered lean gas in world class reservoir quality sands of Pliocene age.

In January 2017, Eni successfully drilled and tested the appraisal well Merakes 2. The POD foresees the drilling and completion of six subsea wells and the construction and installation of subsea systems and pipelines which will be connected to the Jangkrik FPU.

The gas will then be shipped through the existing pipelines from the Jangkrik FPU to the Bontang LNG Processing facility operated by PT Badak in the East Kalimantan.

Merakes production, likewise that of Jangkrik will contribute to the life extension of the Bontang LNG facilities, one of LNG processing plant which supplies LNG to both the domestic and export markets.

Eni is the operator of East Sepinggan through its subsidiary, East Sepinggan Limited. which holds 85 percent Participating Interest, while PT Pertamina Hulu Energy, unit of Pertamina holds the remaining 15 percent.

Indonesia is currently facing a widening gap between fuel consumption and production, raising concerns that if this condition persists and there are no breakthrough policies to narrow the gap, Indonesia will always be vulnerable to external shocks in years ahead, especially if there is a spike in oil and gas prices.

At present Indonesia consumed about 1.6 million barrels per day (bpd), while domestic production reached only around 800,000 bpd, therefore Indonesia has to import to cover the shortfall. The oil production is declining and will only accelerate if there is no major investment to carry out new explorations to add reserves.

It is not only oil that is alarming, natural gas production is also on the same path. Currently, the natural gas production tends to stagnate, while demand is on the upward trend. As a result, Indonesia may be forced to import natural gas or LNG in the next years. Thus, Indonesia is in dire need of more investment.

Indonesia has witnessed a number of global players left the country such as Canadian-based oil and gas player Niko Resources, Hess of U.S. and few other players. Some major players decided to divest their assets such as Chevron Corp., by offloading its geothermal assets in West Java.

Written by Staff Editor, Email: