JAKARTA, INDONESIA — Indonesia’s state oil firm PT Pertamina has officially taken over the operations of Riau’s Rokan oil block, as the contract with the previous operator, PT Chevron Pacific Indonesia (CPI)—a business unit of multinational oil and gas giant—expires this year.
Energy and Mineral Resources Minister Mr Arifin Tasrif said in his address at the Rokan handover ceremony on 8 August that Pertamina’s upstream subsidiary PT Pertamina Hulu Rokan (PHR) would be the official operator for the next 20 years with a 100 per cent participating interest scheme.
This also includes a 10 per cent participating interest for the oil-producing region’s state-enterprise, as stipulated by the Ministerial Decree.
Pertamina’s appointment followed a proposal it made: A signature bonus — a bonus provided ahead of the signing of the contract to prove that the bid winner is committed worth Rp 11.3 trillion — as stated by then-energy deputy minister Mr Arcandra Tahar in 2018.
After the takeover, Pertamina will disburse a US$2 billion investment — around Rp28.6 trillion or S$2.71 billion — for the block until 2025.
“We will continue the ongoing plans, including the application of enhanced oil recovery (EOR) technique,” Pertamina Director Ms Nicke Widyawati stated in a virtual discussion on the Rokan Block handover on 8 August.
EOR refers to a practice of boosting the oil reserve in a well by extracting the volume of oil that previously cannot be retrieved.
Ms Nicke said that the company will continue what PT CPI has done by drilling 161 wells until the end of 2021 and drilling 500 wells in 2022.
As many as 2,869 former workers at the CPI will join PHR following the takeover of the block, she added.
Rokan Block has produced 11.69 billion barrels of oil since its first production in 1951, making it the country’s second-largest oil-producing block after the Cepu Block.
The Rokan Block’s oil production hit the highest of 1 million barrels per day in 1973 when Chevron was then known as Caltex Pacific Indonesia.
The average output of the Rokan Block reached 160,000 barrels per day as of the end of July, accounting for 24 per cent of the national production, said Mr Arifin.
Meanwhile, PT CPI President Director Mr Albert Simanjuntak thanked the Indonesian government for entrusting the company with the oil block’s operations for almost a century, when geologists from the Standard Oil Company of California (Socal) arrived in 1924.
“Our long history started before the independence of Indonesia. Then we cooperated with the Indonesian government, the Riau administration, and the regency. We won’t be able to carry out the exploration safely without their support up until now,” said Mr Albert.
