North-Gehem Gang Project Development With Investment Of IDR 280 Trillion Approved

Oil refinery (Photo: Antara)

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) has approved the North Ganal North Gang Field's First Field Development Plan (WK) and the Gehem WK Ganal and WK Rapak Fields.

The approval is contained in the Letter of the Minister of Energy and Mineral Resources Number: T-351/MG.04/MEM.M/2024 as an answer to the letter from the Head of SKK Migas number SRT-0318/SKKIA00/2024/S1 regarding the Recommendation of the North Hub Development Project Makassar Strait for North Ganal Working Area, Ganal Working Area and Rapak Working Area.

"The provision of POD approval for the Upstream Oil and Gas PSN project is relatively fast because since the discovery of the North Gang's giant disclosure in October 2023, within 10 months the POD has been approved. This is one of the efforts to increase oil and gas production and implement one of the strategies, namely converting resources (resource) to production," said Head of the SKK Migas Program and Communication Division Hudi D. Suryodipuro in Jakarta.

Hudi said, with the approval of this POD, there will be a giant investment entering Indonesia with an estimated investment cost outside the sunk cost of 11,847 million US dollars and operating costs of 5,643 million US dollars or a total investment of 17,490 million US dollars or around Rp280 trillion.

As for the total Sink cost WK North Ganal and WK Rapak, it was set at 859 million US dollars.

"Investment of Rp280 trillion is certainly very large because 2.5 times greater than investment in the Jakarta-Bandung high-speed train which is around Rp112 trillion," he said proudly.

Hudi also said that the potential overall income or gross revenue is estimated to reach IDR 631 trillion.

From this income, the Government's share allocation is IDR 208 trillion or around 31.5 percent of gross revenue.

As for the contractor, in this case, the oil and gas company from Italy, ENI, is 8.12 billion US dollars or about 19.7 percent of gross revenue, and cost recovery costs of 18.33 billion US dollars or around 44.4 percent.

"According to the approval in the POD, at least later state revenues will be around Rp. 208 trillion, SKK Migas will carry out supervision and control as much as possible so that cost recovery can be more efficient, so that state revenues can be pushed even more," said Hudi.

Regarding support for meeting domestic energy needs, Hudi emphasized that the assumptions used in calculating the POD economy have paid attention to its domestic benefits, such as the price of piped gas being set at 6 US dollars per MMBTU.

"We hope that the Government can encourage the growth of domestic industries that need gas, especially in the East Kalimantan and North Kalimantan areas, so that the existing potential can be utilized. So that the added value obtained by the state will be even greater," he said.