Prove Superior Performance, Pertamina Hulu Energi Implements Operational Synergy Strategy

Photo: Doc. Pertamina Hulu Energi

JAKARTA - Domestic oil and gas production of PT Pertamina Hulu Energi (PHE) as Pertamina's Upstream Subholding has increased over the past few years. In the last three years from 2020 to 2023, domestic oil and gas production growth has increased by 1.45 percent.

This increase was achieved through strategies, including production optimization in the management of existing work areas, which were operated by themselves (own operation) and collaborated with partners (partnership), as well as acquisition activities.

As of August 2023, PHE recorded a total production of YTD (year to date) of 1.04 MMBOEPD (million barrels of equivalence oil per day) which is a combination of 570 MBOPD (rib barrels of oil per day) as well as 2,760 MMSCFD (million cubic feet of gas per day). This resulted from the completion of drilling 502 development wells, 511 work-over (reworked moving layers), and 21,764 well service interventions (reparations and interventions of wells).

PHE's Director of Development and Production, Awang Lazuardi, revealed that this achievement is not an easy thing because in today's upstream oil and gas industry, there are several challenges faced.

One of them is field conditions that have matured in most areas so that they require strategies for management. PHE implements three main strategies, namely managing production baselines, increasing production growth through work plans and mergers & acquisitions and increasing detective & resource growth by always prioritizing the aspects of Environment, Social, Governance (ESG), "explained Awang, in a written statement, Wednesday, September 27.

Awang further explained that one of the fundamental strategies that has been running so far is a partnership that is the implementation of synergies with various mechanisms. The first mechanism of partnership is the sharing of Participating Interest (PI) in an oil and gas working area with strategic partners from a financial and technological perspective.

One of the implementations of the mechanism is the Offshore Southeast Sumatra (OSES) Working Area where 10 percent of PI is managed by Regional Owned Enterprises (BUMD) and ownership of PI with other partners such as the management of the Cepu Block with Exxon Mobil Cepu Ltd. (EMCL), and Amplex Pte Ltd.

The second mechanism is Operational Cooperation (KSO), which is now known as New KSO. To date, there are 25 KSOs where there have been 3 KSOs converted to New KSOs, while there are 14 KSO Exitings that are currently in the process of converting to New KSOs. KSO contributions to production as of August 2023 are 2,422 BOPD (oil barrel per day) and 9.58 MMSCFD (million cubic feet of gas per day).

The third mechanism is Joint Operating Body (JOB). Currently, there are two JOBs that are managed, namely JOB Simengretas and JOB Medco-Tomori.

In addition, there is an old well management mechanism based on Minister of Energy and Mineral Resources Regulation No. 01 of 2008 concerning Guidelines for Equipment Mining at Old Wells.

The next mechanism for the implementation of idle well management is that the partnership concept (business cooperation) will be implemented at Pertamina EP and Pertamina Hulu Rokan. There have been four HOAS agreed with several other partnership potentials still in the discussion stage.

Meanwhile, for idle wells that can be done by themselves, PHE has reactivated this idle well of approximately 800-900 wells per year.

The partnership strategy has a positive impact in the form of technology transfer, science and risk sharing with partners that can provide an impetus to continue to develop to manage upstream oil and gas working areas by upholding the value of work safety.

"By implementing a partnership strategy, it is hoped that we can always consolidate to increase production and obtain new resource findings to support national energy security," concluded Awang.

PHE will continue to invest in upstream oil and gas operations and business management according to ESG principles, to support the Government's target of achieving 1 Million BOPD oil production and 12 BCFD gas production by 2030. PHE has been registered with the United Nations Global Compact (UNGC) as a participant/member since June 2022.

PHE is committed to Ten Universal Principles or Ten Principles from UNGC in its strategy and operations, as part of implementing the ESG aspect. PHE will continue to develop prudent and excellent operation management at home and abroad professionally to realize the achievements of becoming a world-class oil and gas company that is Environmentally, Socially Responsible and Good Governance.