The Government Agrees To The Revision Of The Meres And Meres East Field PODs

Illustration (Photo: Doc. Antara)

JAKARTA - The government approved the plan to develop the first field or Plan of Development I (POD I) of Meres and Meres East Fields which was operated by Cooperation Contract Contract Contractors (KKKS) Eni East Sepinggan Ltd.

Head of SKK Migas Dwi Soetjipto said the newly approved POD was a revision of the previous POD.

"Revision of POD is necessary because there are additional reserves from Meres East Field and also because of the sharing facility from the two fields," he told the media, Tuesday, January 17.

It is known that this approval was given by the Minister of Energy and Mineral Resources (ESDM) through a letter of approval on December 27, 2022, which was the answer to the recommendation submitted by the Special Task Force for the Implementation of Oil and Gas Upstream Activities (SKK Migas).

Dwi said that SKK Migas will continue to encourage exploration and accelerate the development of oil and gas fields in East Kalimantan considering that this region has a strategic role as well as maintaining energy adequacy in the East Kalimantan region, including in the capital city of the archipelago (IKN) which is the nation's capital in the future.

"Given the strategic location as the capital city in the future, the potential of upstream oil and gas in East Kalimantan will continue to be developed so that it can provide support for energy supply in the region," said Dwi.

Dwi detailed that the estimated cost required for the development of Meres and Meres East Fields is US$3.35 billion, consisting of capital expenditure (Capex) of US$2.14 billion and operation expenditure (Opex) of US$1.26 billion.

"In addition to helping economic growth, direct investment or foreign direct investment like this will create a multiplier effect for upstream oil and gas supporting industries because SKK Migas has made a policy so that KKS Contractors prioritize the use of domestic goods and services," said Dwi.

Just so you know, Meres and Meres East Fields are part of the East Sepinggan Working Area which is managed with a Gross Split Sharing Contract.

Assuming that this field will be onstream by the end of 2024 and will produce until 2032, the state is projected to receive revenues of US$3.8 billion or around Rp56.24 trillion.

The approval of POD I Meres and Meres East Fields has consequences for obligations for the East Sepinggan Working Area operator, namely Eni East Sepinggan Ltd.

Among these obligations is completing the work of developing Meres and Meres East Square according to the planned schedule.

In addition, operators are also required to continue the exploration program while maintaining the economy of the East Sepinggan Working Area.

Operators are also required to implement the provisions of offering 10 percent of interest participation to BUMD, ensuring offtakers of natural gas, and supporting government programs in the context of providing natural gas, including for households (city gas) and road transportation.