28 Oil And Gas Industry Agreements At IOG Bali, SKK: Potential Revenue Of 2.3 Billion Dollars

A total of 28 commercial agreements were signed to coincide with the event The 3nd International Convention on Indonesian Upstream Oil and Gas 2022 (IOG 2022). (Photo: Mery Handayani / VOI)

BALI - The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) said there were 28 commercial agreements signed to coincide with the event The 3nd International Convention on Indonesian Upstream Oil and Gas 2022 (IOG 2022).

The agreement includes 10 documents regarding the Election Not To Take in Kind (ENTIK) Procedure which regulates the duties and responsibilities between SKK Migas and KKS Contractors as Non-Government Oil Sellers and State Condensates, as well as 18 natural gas purchase agreement documents (PJBG), PJBG amendments, heads of agreement (HoA), memorandum of understanding (MoU) for piped gas, LNG, and LPG between Sellers and Buyers.

Of the 28 agreements, they will produce oil lifting and condensates of 265,000 barrels of oil per day and an estimated total natural gas lifting of 390 billion British thermal units (TBTU). The contract duration range is from 2 to 11 years.

"The potential receipts reached 2.3 billion dollars," said Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), Dwi Soetjipto after witnessing the signing, Friday, November 25.

The signing of these contracts, not only generates revenue, but most importantly to support massive economic growth. Raw oil and condensates sold entirely will be supplied for domestic needs.

The gas sold in part will be supplied to fertilizer and petrochemical factories in South Sumatra and Central Sulawesi, for industrial development in West Java, Central Java, East Java, and Central Sulawesi, as well as electricity for PLN needs. Meanwhile, LPG from South Sumatra is planned entirely to be supplied for domestic needs.

"This shows the commitment of upstream oil and gas in maintaining national energy security," he said.

This agreement shows good coordination between SKK Migas, buyers and sellers.

SKK Migas hopes that this cooperation will continue to be maintained and improved to ensure that all oil, gas and LPG production can be optimally monetized.

Dwi said that oil and gas commercialization, especially natural gas, is one of the strategic pillars in supporting the achievement of the long-term vision of oil and gas SKK with the production of 1 million barrels of oil per day and natural gas of 12 billion cubic feet per day (BSCFD) by 2030. This production will be prioritized for domestic buyers.

The challenge is that domestic natural gas demand tends to stagnate. Since 2012, the average growth in natural gas utilization by domestic buyers is 1 percent per year. This growth is lower than the national economic growth which reaches 4-5 percent per year.

"There needs to be a breakthrough from all parties to increase the needs of domestic natural gas buyers," said Dwi.

The agreement signed includes the ENTICLE BETWEEN SKK Migas and PT Pertamina Hulu Energi, PJBG between PT Pertamina EP and PT Krakatau Steel, the PJBG amendment between PT Medco E&P Indonesia and PT Pupuk Sriwidjaja Palembang, MoU between Inpex Masela and PT Badohopi Nickel Smelting Indonesia, HoA between PT Pertamina (Persero) and PT Nusantara Regas and Jadestone Energy (Lemang) Pte Ltd with PT Pertamina Patra Niaga.