OGE 57 Small

INDONESIAN OIL, GAS & POWER
POWER INDUSTRY BOOMING BIG TIME
VOLUME 57 | DECEMBER 22 - JAMUARY 22, 2016
PETROMINDO DECEMBER 22 JANUARY 22, 2016
CONTENTS
10 POWER
Sewatama enters Middle East, Africa
12 INDUSTRY NEWS: OIL & GAS
34 POWER
ABB opens switchgear plant
35 POWER | KALEIDOSCOPE 2015
50 OIL&GAS
Bad years for oil industry
28
54 opinion | Madjedi Hasan

Staring down the barrel
58 opinion | Salis S. Aprilian
2015 LNG review
60 INVESTMENT
$20b needed for gas infrastructures
61 OIL&GAS | KALEIDOSCOPE 2015
61
COVER sTORY
Power industry
booming big time
Oil and gas companies are in the doldrums due
to the sharp drop in oil prices. Coal companies
still struggle to survive the market slump which
has ongoing for three years. The only industry
in Indonesian energy sector that is now
growing is power thanks to the 35,000 MW
power plant development program launched
by President Jokowi Widodo a.k.a Jokowi.
CONTENTS
88
90 bIOFUEL
11 firms to supply biodiesel
to Pertamina, AKR
92 Technology
Cambridge University creates
ultimate battery
94 COMPANIES
RAJA upbeat on next year performance
95 OIL&GAS
Worker protests hit CPI fields
96 Medco invests $460m for gas
development in Block A
OIL & GAS
astkal Supply Base

E
starts providing
service for rigs
The Eastkal Supply Base port in East Kalimantan,
owned by PT Pelabuhan Penajam Banua Taka,
a subsidiary of IDX-listed conglomerate PT Astra
International, has started providing service for oil
and gas rig since September of this year.
CONTENTS
OIL&GAS
ice president
V
inaugurates RFCC
Cilacap
97 OIL&GAS
DSLNG, GE signs contract service
agreement
99 POWER
PLN leasing Turkeys power plant vessel
100 eVENTS
104 Statistics
Vice President Jusuf Kalla has

inaugurated the operation of the
Residual Fluid Catalytic Cracker (RFCC)
of the Cilacap refinery in Central Java
owned by state owned oil and gas firm
PT Pertamina (Persero).
98
Overseas advertising representative

SINGAPORE
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MALAYSIA
Shallie Cheng
Mind Sense Sdn.Bhd.
No.107, 1st.Floor Menara Mutiara Majestic,
No.15, Jalan Othman, Section 3, 46,000 Petaling Jaya,
Selangor, Malaysia.
Phone: + 603 7781 7700
Email: shalliecheng@gmail.com
www.mind-sense.biz
JAPAN
Shigenori Nagatomo Pacic Business Inc
Akutagawa Bldg., 7-7, Nihonbashi
Kabutocho,
Chuo-ku, Tokyo 103 0026
Phone: +81 3 3661 6138
Email: nagatomo-pbi@gol.com
CHINA
Dr Phil Ren
eCoalChina.com
Noble Tower No 22 Titan Road
Shahekou District
Dalian PC 116000
Phone: +86 411 3999 7749
Email: zhangp@ecoalchina.com
www.eCoalChina.com
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Major Media Ltd
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www.majormedia.co.uk
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EDITOR'S NOTE
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NEWS DIRECTOR
Reiner Simanjuntak
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Johannes Simbolon
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A big boom time in

power industry
ndonesia is seeing something unprecedented in the countrys history: A

boom in the power industry. The industry, which was largely overlooked
by investors in the past for various reasons, has suddenly become a
darling of investors. A horde of investors from various parts of the world
are coming, local investors are vying to set up new subsidiaries to invest
in Indonesian power sector. This is happening thanks to President Joko
Widodos 35,000 MW program.
For 70 years since Indonesia gained independence, Indonesia has only
been able to build 50,000 MW. Now, the government wants to add 35,000
MW to the installed capacity until 2019-2020 a 70 percent increase
within a mere five to six years. Many people think this is a crazy program,
too ambitious. Its impossible to build power plants with such amount of
capacities in such a short time. Other people, however, say the timeframe
may be unrealistic, but the bottom line is that Indonesia needs to build a
large number of power plants to solve power shortages occurring in many
parts of the country, increase the countrys electrification ratio and provide
strong foundation for industries to grow. Industries need power supplies to
grow. If Indonesia does not have adequate supply of power, few investors
would be willing to come.
The 35,000 MW program will not only bring positive impacts on the
nations economy in the future, but also today during the development of
the power plant projects. The government says 650,000 workers will be
directly employed to work on the projects and another 3 million-strong
workforce will be indirectly involved in the development of the projects.
The 35,000 MW program is estimated to cost US$73 billion with 40 percent
of the investment going to be spent locally.
The story about the boom time in the power industry is presented as the
cover story of this edition.
What is happening in the oil and gas industry is starkly different. The
industry has been in great pain due to the collapse of the oil price. As of this
writing, the crude benchmark fell to above US$35 per barrel, compared
to above $100 one and a half year ago. Analysts universally believe the
price will further fall next year. The oil price slump has forced oil and gas
companies to lay off 200,000 workers worldwide, according to a report.
Last but not least, we have kaleidoscopes of events in the power and oil
and gas industries throughout this year.
Johannes Simbolon
Editor in Chief
Send your letters or comments on this magazine or articles inside, as well as your
opinion articles to ogeasia@petromindo.com. Opinion articles, either in Indonesian or English, are between 1,500 and 2,000 words in length.
Petromindo|Khalsa
POWER
Sewatama enters
Middle East, Africa
DX-listed power company PT

Sumberdaya Sewatama Tbk has
signed Heads of Agreements
(HoA) with Dubai based
National Gulf Investment LLc and
FO Trading to set up partnership to
supply temporary power in Middle
East and Africa using diesel power
generators.
The agreement signed on Dec. 3,
2015 were effective for three years
10
Nasser Ali Yaslam, CEO National

Gulf Investment (NGI), said the
Middle Eastern and African regions
need up to 1,200 MW of power
supplies that can be delivered
quickly and temporary basis for the
development and expansion projects
of various housing and industrial
complexes in Saudi Arabia, Uni Arab
Emirates (UAE) and Africa.
NGI Grouup is a player in the
construction industry in the regions

and has been active in the business
for 20 years. It needs a reliable
temporary supplier for its projects in
the regions.
Nasser explained that NGI Group
is convinced that the partnership with
Sewatama will be sustainable in view
of mutual understanding, similarities
and professionalism shared by both
parties as well both countries. We
are happy that finally we can sign

the agreement today. Sewatama has
been involved in the business for
23 years and we are convinced that
the partnership will go well and last
long, he said after signing the HoA.
Meanwhile, Othman El Boukshimi,
CEO of FO Trading, an Independent
Power Producer (IPP) player which
has been involved in power projects
in Indonesia, Middle East and Africa,
said the firm is ready to collaborate
with Sewatama to ensure that the
latters diesel power generators are
ready for using to meet the power
needs in the Middle Eastern and
African regions.
As for Sewatama, the companys
CEO Elan B Fuadi said the agreement
signed with the two firms underlined
the continued expansion of
Sewatamas temporary business line.
This comes in line with the companys
strategy to expand and maintain its
temporary power business. Earlier,
we have also entered the temporary
power market in Thailand, Elan said
According to Globaldata, an
international research consultancy
firm, temporary power market in the
Middle Eastern and African regions
has continued to increase. In Saudi
Arabia, according to Globaldata,
the demand for temporary power
will reach 1,200 MW in 2016, up
from 1,000 MW in 2015. Of the total
demand, 98 percent is expected to be
fulfilled by diesel generators. Diesel
generators are favored in the area
because the region is the worlds
major petroleum producer.
Within three years, we target
to capture around 40 percent of the
market demand or around 300 MW,
Elan said.
In order to penetrate the market,
Sewatama is now building strategic
alliance with NGI and FO Trading,

both based in UEA. NGI is a major
company in the region involved
in property and infrastructure
construction business. The three
firms will set up a partnership to
operate in the regions.
We feel sure that the partnership
will be mutually beneficial for all
parties, Nasser said.
Sewatama will contribute US$120
million in capital to the partnership
in the form of reciprocating diesel
engines. The engines will delivered
in phases over a period of three
years. The machines have been
modified to meet the Middle Eastern
specifications. For instance, the
machines should be able to weather
the regions temperature that may
reach 40 Celsius degrees, Elan said.
Meanwhile, NGI and FO Trading
will contribute $60 million in capital
to the partnership in the form of
office building in Dubai and coverage
of operating costs throughout the
cooperation period. NGI and FO
Trading will handle the marketing
of temporary power. However, the
operation of the power generators
will be handled by Sewatamas staff.
Nasser said NGIs decision to take
Sewatama as strategic partner in the
temporary power business is a right
one, citing that Sewatama has been
doing power business for 23 years
and aside from temporary power,
the firm has several other business
lines in the power sector, such as IPP,
Energy Efficiency Service (EES) and
Operation & Maintenance (O&M)
According to a study by Frost &
Sullivan in 2014, Sewatama is the
largest temporary power provider
in Indonesia with a market share
of 40 percent. As of today, the firm
operates more than 1,000 MW diesel
temporary power generators in

various parts of the country.
On the back of our experience
in power business and the
capacity of NGI and FO Trading in
various sectors, we believe this
partnership will bring benefits for
the shareholders and stakeholders of
each firm, Elan said.
Founded in 1992, Sewatama
is part of Tiara Marga Trakind
Group and is a subsidiary of IDXlisted integrated energy firm ABM
Investama.
While temporary power has
been the core business of the firm
from the outset, Sewatama has
been aggressively expanding to the
IPP, EES and O&M businesses. In
the IPP sector, the firm through its
subsidiary, PT Pradipa Arya Satya and
PT Nagata Bisma Shakti, has acquired
20 percent of the 110 MW combined
cycle power plant in South Sumatra
owned by PT Meppo-Gen, a stake
in 15 MW coal fired power plant in
Aceh in PT Energi Alamraya Semesta
and are building several hydropower
plants with a combined capacity of 50
MW in South Sulawesi.
The firm received the Best Brand
award in 2015 for the category of
Power Infrastructure Solution from
PT Mars Indonesia and Swa magazine.
NGI was established in 1972
as a transportation firm. Since
its establishment, the firm has
continued to develop that now it
has several business lines including
logistics handling, building material
production, infrastructures, road
construction, manufacturing,
lubricant and oil fuel supply, heavy
equipment leasing and service
engineering. The firm now has nine
subsidiaries doing business in nine
sectors.
11
INDUSTRY NEWS: OIL & GAS
Indonesia was officially readmitted

by the Organization of Petroleum
Exporting Countries (OPEC) during the
organizations ministerial meeting on
Dec. 4, 2015 in Vienna, the Ministry of
Energy and Mineral Resources said in
a statement recently.
Minister of Energy and Mineral
Resources Sudirman Said was present
at the meeting.
The meeting also accepted
Widhyawan Prawiratatmadja as OPEC
governor representing Indonesia.
Indonesia is among the founders
of OPEC but the country froze its
membership in 2008 on the grounds
it has turned into a net oil importing
country.
Craig Stewart re-elected

as IPA President
The Indonesian Petroleum

Association (IPA) at its annual
general meeting recently re-elected
Craig Stewart of Ophir Energy as its
President for 2016.
The meeting also elected members
of the IPA board of directors, consisting
of Christina Vercher of BP Indonesia,
12
the target of 279,000 bopd, SKK

Migas Head of Public Relations Elan
Biantoro told Petromindo recently.
The Rokan block is home to the
large Duri, Minas, and Bekasap fields.
Duri is one of the largest steam flood
operations in the world. Minas is
where it all began for CPI. The oil first
produced by CPI in Sumatra was the
world-famous Sumatran Light that
flowed from the Minas field in 1952.
The Rokan block is 100 percent
owned by CPI. The PSC will expire in
Aug. 9, 2021.
Erec S. Isaacson of Conocophillips

Indonesia Inc.Ltd., Lukman Mahfoedz
of PT Medco, Charles A. Taylor of
Chevron Indonesia Company, Gunung
Sardjono Hadi of PT Pertamina
(persero), Tenny Wibowo of Santos
(Samoang) Pty. Ltd., Sammy Hamzah
of Ephindo Energy Private Ltd., Jon
M. Gibbs of ExxonMobil Indonesia
Inc., Hardy Pramono of Total E&P
Indonesie, Luca de Caro of Eni
Indonesia, Shunichiro Sugaya of Inpex
Corporation, and Hazli Sham B. Kassim
of Petronas Carigali Muriah Ltd.
IPA Executive Director Marjolijn
Wajong said the IPA will continue to
work with the government as partner
in reforming the industry.
IEA admits Indonesia
CPIs production reaches

281,000 bopd
Current oil production from fields

under primary or secondary recovery
within the Rokan PSC in Riau, which
is operated by PT Chevron Pacific
Indonesia (CPI), stands at 281,000
bopd, according to an official at
upstream authority SKK Migas.
The current oil production from
Chevron in Riau is still quite good,
reaching 281,000 bopd, slightly above
Petromindo doc.
Indonesia officially
readmitted by OPEC
Indonesia has been officially

accepted as member by the
International Energy Agency
(IEA), which is the organization
of renewable producing countries
under the Organization for Economic
Cooperation and Development
(OECD), the Directorate General of
New Renewable Energy and Energy
Conservation (EBTKE) said in a
statement.
We are admitted as associate
member along with China, Mexico and
Chili, Minister of Energy and Mineral
Resources Sudirman Said said at the
palace recently.
Sudirman said the reason that
Indonesia applied for membership
in IEA is to assure energy supply
into the country in partnership
with the international community.
Earlier, Indonesian has also
gained membership in OPEC, the
organization of petroleum producing
countries.
The benefit is that we shall get
exposed to, be part of and interact
with two communities which are each
equally strong in either fossil fuel or
renewables. Our position is now in
the middle of them, he said.
13
Courtesy of SKK MIGAS
Local market unable

to absorb LNG
Ministry of Energy and Mineral
Resources stated that there are 14
cargoes of LNG from the Tangguh
LNG plant in West Papua which
have been allocated for the domestic
market but cant be delivered due to
the absence of buyers.
BP (the operator of the Tangguh
LNG plant) has sent a letter asking
where the 14 LNG cargoes should be
delivered to. If there is no one to buy
the LNG, the worst consequence is
they have to cut the production and
shut down the wells. The best option
is selling the LNG to the international
market, Director General of Oil and
Gas IGN Wiratmaja said recently.
This is a wakeup call for
us that the development of gas
infrastructures should be accelerated
so that the LNG can be absorbed, he
said.
BP also in a letter asked the
ministry for certainty regarding
14
domestic demand for LNG from

the third train it plans to build at
the LNG plant. In the letter, BP said
it is committed to providing any
amount of LNG the domestic market
wants from the Tangguh Train 3
and will export the rest. The firm,
however, demands the gas sales and
purchasing contracts be signed as
soon as possible by March 2016 at
the latest.
Upstream Director at ministry
Djoko Siswanto said the ministry has
told BP that it can export the output
from Train 3 that has been allocated
for the domestic market if the
domestic market could not absorb it.
Minister sets deadline

for Total and Inpex

Resources Sudirman Said said he has
given French firm Total SA and its
Japanese partner Inpex Corp. until the
end of this month to decide whether
they accept the governments
decision regarding the Mahakam

block in East Kalimantan.
We have informed Total
and Inpex that they must make
a decision by the end of this
month, Sudirman said recently
during a hearing with the House of
Representatives Commission VII for
energy affairs.
He also said the ministry has also
informed Pertamina that it must be
well prepared for any scenario that
may happen with Mahakam block at
the end of this year.
Pertamina must be well prepared
for anything that may happen,
including that the current operators
(Total EP Indonesie) rejects the
portion of interest offered by the
government, he said. adding that
at present, negotiation between
the governments team comprising
officials from upstream authority SKK
Migas and the Directorate General
of Oil and Total and Inpex is nearing
conclusion.
15
State Minister of State-Owned

Enterprises Rini Soemarno said that
the ministry plans to appoint statecontrolled gas distribution company
PT Perusahaan Gas Negara Tbk (PGN)
to become the sole operator of gas
pipelines in the country.
She was quoted by Koran Tempo
as saying recently that under the
plan, PGN will takeover the pipelines
owned by PT Pertamina Gas, a
subsidiary of state-owned oil and gas
firm PT Pertamina, either through
acquisition or lease.
She added that by appointing PGN
as the sole operator of gas pipelines,
duplication of gas pipeline project can
be avoided. We hope this synergy
will improve gas connection directly
to the consumers, Rini said.
The paper also quoted Pertamina
President Director Dwi Soetjopto
as saying that the pipeline merger
will increase gas distribution
to consumers, and help reduce
maintenance cost, which in turn can
lower toll fee for gas distribution via
pipeline by 20-40 percent.
Gas traders must build

infrastructure
The government is calling on gas

trading companies to build their own
infrastructures. Otherwise, they will
not be allowed to do the business.
Director General of Oil and Gas
IGN Wiratmaja said the Ministry of
Energy and Mineral Resources has
issued Ministerial Regulation No.
37/2015 on Rules and Procedures
for Price Setting and Allocations of
Gas which prioritizes the allocation
of gas for state owned enterprises
owned by the central and regional
governments and private companies
16
Petromindo|Lucky
PGN to be appointed as sole

operator of gas pipelines
Rudianto Rimbono
which already have built their own

gas infrastructures.
Private companies which do not
have gas infrastructures must build
them now in order to be allowed to
do the business. Under Ministerial
Regulation No. 3/2010 on Allocation
and Utilization of Natural Gas for
the Fulfillment of Domestic Needs,
which has been replaced by the new
regulation, a company was allowed to
carry out gas trading business even
though they did not have their own
infrastructures.
To do the business, they leased
the pipelines owned by state owned
gas trader PT Perusahaan Gas
Negara (PGN) or PT Pertamina Gas
(Pertagas), a subsidiary of state
owned oil and gas firm PT Pertamina.
PSC to save $250m in costs

as part of efficiency
Upstream authority SKK Migas

has completed negotiations with
the countrys Production Sharing
Contract (PSC) holders on efficiency
measures to cope with the decline in
oil prices that will result in saving of

costs amounting to US$250 million.
We did the negotiation
because in view of the current oil
price situation, there are a lot of
activities that should be considered
uneconomical, SKK Migass Business
Support Deputy Rudianto Rimbono
told Petromindo.
Rudianto explained that there
are several ways to carry out
efficiency. For example, there is a
PSC holder which initially planned
to drill 70 wells. Because of the oil
price drop, the company considered
there were only seven wells which
were economical to be drilled. After
negotiation, the contractor finally
agreed to drill 35 wells, which is a
win-win solution for the contractor
and SKK Migas, he said.
There are also cases in which the
contractors managed to renegotiate
their contracts on ships, EPCI, OCTG,
drilling, turbomachinery etc., in
which the values of the contracts are
unchanged but the contract period
has been extended, he said.
17
Coordinating Minister for

Politics, Law and Security Affairs
Luhut Panjaitan said he supported
the option of building an onshore
LNG plant for the Abadi field within
Masela block, Maluku, citing that the
alternative option -- a floating LNG
(FLNG) plant risks the LNG being
taken outside of the country illegally.
If the LNG plant is situated on
land, it will be controllable. If it is
located offshore, it will be difficult
to control. We have to keep an eye
on the operation process. Otherwise,
(the LNG) may be secretly taken
outside of the country unbeknownst
to us, Luhut was quoted by Antara as
saying on recently during a Maluku
community gathering in Ambon.
Luhut said he has communicated
his opinion to President Joko Widodo
and Malukus Governor Said Assegaf
also agreed with him.
The onshore LNG option first
proposed by Coordinating Minister
18
of Maritime Affairs Rizal Ramli who

in one occasion also cited the risk
of theft as one of the reason he is
opposed to the FLNG option. If an
FLNG plant is built in Abadi field,
there is a risk that the LNG produced
from the plant will be secretly taken
outside of the country. The FLNG
option is proposed by the owner of
Masela block, namely Japanese firm
Inpex Corp. and European firm and
supported by upstream authority SKK
Migas and many experts, business
players and academics.
Perpres issued to boost use of

natural gas for transportation
President Joko Widodo has issued
a presidential regulation (Perpres)
aimed to boot the utilization of
natural gas for motorized land
transportation.
The Presidential Regulation No.
125/2015 replaces Presidential
Regulation No. 64/2012 on the
Provision, Distribution and Price
Determination of Natural Gas as Fuel
for Land Transportation, the Cabinet

Secretary Office said in a statement
recently.
Under the new regulation, the
provision and distribution of natural
gas in the form of Compressed
Natural Gas (CNG) for motorized land
transportation will be carried out in
phases.
The activities will be conducted by
either state owned enterprises (SEOs)
or private business entities directly
appointed by the minister of energy
and mineral resources.
Private business entities must
have facilities and infrastructures
for the provision and distribution of
CNG; and secure CNG supplies to be
eligible for being appointed by the
minister. SOEs and business entities
appointed by the minister will get
CNG allocations.
Saka Energi signs $600m

loan agreement
Petromindo|Khalsa
Luhut favors onshore

LNG for Masela
IDX-listed state-controlled gas

distributor PT Perusahaan Gas
Negara Tbk (PGN) said recently
that its subsidiary PT Saka Energi
Indonesia signed on Dec. 2, 2015 a
syndicated loan agreement with a
bank syndication.
The bank syndication comprises
of BNP Paribas, The Hongkong and
Shanghai Banking Corporation
Limited, Mizuho Bank, Ltd., PT Bank
Mizuho Indonesia, PT Bank Sumitomo
Mitsui Indonesia, PT HSBC Securities
Indonesia, and Sumitomo Mitsui
Banking Corporation.
The loan facility amounts to a
maximum of US$600 million. The
agreement is effective five years from
the signing date.
The funds will be used to finance
investment and operation as well as
refinance debt.
Petromindo|Khalsa
President issues regulation

on LPG for fishermen
President Joko Widodo issued on Nov. 2, 2015
Presidential Regulation No. 126/2015 on the Provision,
Distribution and Price Setting of LPG for small fishermen,
the directorate general of oil and gas said in a statement
recently.
Under the regulation, small fishermen with motor
boat will be provided with subsidized LPG by state owed
enterprises or private companies appointed by the
minister of energy and mineral resources.
The fishermen will receive a free package from the
government to enable them to use LPG in their boats.
The package consists of boat machine, converter kit, LPG
container. The free package will be awarded for one time
only.
The price of the LPG will be determined by the minister
following the mechanism for setting the price of LPG for
3-kg container.
Ramba Energy to drill Kusuma 1 well
SGX-listed Ramba Energy Ltd through its subsidiary

Ramba Energy West Jambi Ltd plans to drill Kusuma 1 well
in West Jambi KSO PSC in Jambi on Dec. 21, 2015.
Subsequently, the firm will drill another well in the
first quarter of 2016, Ngatijan, Survey Division Head at
upstream authority SKK Migas said, adding the firm will
use a 750 hp rig.
The block is owned by state owned oil and gas firm
PT Pertamina (Persero). Ramba signed a Joint Operation
(KSO) agreement with the state firm in June 2011, giving
the rights to explore and exploit the asset for 20 years.
19

the Company which is focused on oil
and gas production and gas to power
projects in Sumatra, Indonesia. We
look forward to updating you all on
our progress into 2016 and beyond,
Managing Director David Whitby said
in a statement.
SKK Migas extends Muara

Enim PSCs exploration
period
KrisEnergy kicks off

Sakti exploration well in
East Java Sea
SGX-listed KrisEnergy Ltd., an
independent upstream oil and gas
company, announced recently that
the KS Java Star jack-up rig has
commenced drilling of the Mustika-1
exploration well in the KrisEnergyoperated Sakti PSC, East Java.
Drilling is expected to take
approximately 20 days, KrisEnergy
said in a statement.
The company said Mustika-1, which
is targeting the Kujung I formation,
is planned to reach a total measured
depth at 3,100 feet (945 meters), or
3,000 feet total vertical depth subsea.
The location of the well is based on the
interpretation of the 1,202 km 2D and
401 sq. km 3D seismic data acquired
by the company in 2014.
KrisEnergy is also the operator
of the Bulu PSC, which is adjacent to
the Sakti PSC and contains the Lengo
gas discovery for which the company
received approval for its plan of
20
development in December 2014.

Chris Gibson-Robinson, Director
Exploration & Production, said: The
decision to drill Mustika-1 at this time
comes as we are finalizing project
details for the Lengo development.
This prospect is 10 km west of Lengo
and, if successful, we would look
at producing Sakti gas through the
Lengo facilities.
CEB changes name to Andalas

Energy and Power plc
LSEs AIM-listed CEB Resources

plc announced recently its change of
name to Andalas Energy and Power
plc.
The companys new ticker AIM:
ADL and new web address (www.
andalasenergy.co.uk) will go live
Friday (Dec.4)
Managing Director, David Whitby,
said We are delighted to announce
our change of name to Andalas
Energy and Power plc. Andalas is an
ancient name for Sumatra. We believe
this new name reflects our vision for
ASX-listed NuEnergy Gas Limited

announced recently it has been
granted by upstream authority
SKK Migas a one-time extension of
exploration period for Muara Enim
PSC in South Sumatra.
The extension is for a maximum
period of four years to Nov. 29, 2019.
NuEnergy commenced drilling at
the coal bed methane (CBM) block in
November 2011. Initial results from
the first well are positive with a total
of 38.2 meters (net) of coal confirmed
with one continuous coal seam of 19
meters identified in the Suban Coal
group.
The results of the Muara Enim
well are consistent with the previous
estimates for prospective gas-in-place
provided by PT Trias Energy Perkasa
(2011) and RISC (June 2010).
A second well at the Muara
Enim PSC was drilled, cored and
tested in May 2012 showing net
coal thickness of 43 meters. This
well was converted into NuEnergys
first pilot well (Pilot Well #1) with
dewatering commencing in October
2012. Fourteen hours after the
commencement of dewatering, gas
was being flared.
A further resource estimate
prepared by RPS Group Plc for the
Muara Enim PSC reported 2 bcf of
2C and 97 bcf of 3C contigent gas
resources.
ADVErTORIAL
21

has finally signed contract with
international consultant Poten &
Partners to assess the technology for
the LNG plant to be developed for the
Abadi field within Masela block in
Maluku Province.
This was said by Deputy of
Planning Control at SKK Migas
Gunawan Sutadiwirja to Petromindo.
Earlier reports said the plan to
sign the contract was hobbled by
disagreement between SKK Migas
and Poten on the property right
over the result of the assessment
by Potent. The problem has finally
resolved as Poten agreed that
the assessment result will be
considered as the governments
possession, according to an industry
source.
The consultant starts working
from the signature date of the
contract for a duration of three
months, according to the source.
Poten was approached by SKK
Migas following an instruction from
President Joko Widodo to find an
22
international consultant to provide an

input for the minister of energy and
mineral resources to decide whether
an onshore LNG plant of a floating
LNG (FLNG) plant should be built for
Abadi field.
Jokowi calls for accelerated

construction of power plants
and refineries
President Joko Widodo (Jokowi)

calls for the removal of any obstacles
hampering refinery and power plant
projects so that the development of
the projects can be accelerated.
The president said investors
interest in the projects is very high,
which is an opportunity Indonesia
cant afford to lose.
Speed up the delivery of
service (to the investors) so that
this opportunity will not bet lost,
Jokowi told his Cabinet members
in a limited meeting on two state
owned firms, PT Pertamina (Persero)
and PT Perusahaan Listrik Negara
(PLN) (Persero), at the state palace
recently.
He said thanks to the power plant
projects, Indonesias electrification
ratio is expected to reach 100

percent by late 2019. Meanwhile,
new refineries are expected to start
construction in Java and outside Java
the same year.
Genting Oil strikes gas

at Kido Shallow well
Genting Oil Kasuri Ltd, a

subsidiary of Malaysian firm Genting
Oil Berhard, struck gas in Steenkool
Formation while drilling Kido
Shallow-1X well in Kasuri block, West
Papua.
The well was drilled to the
depth of 1600 meter, flowing gas
at a maximum cumulative rate of
approximately 40 mmscfd, Nara
Nilandaroe, Genting Oil Kasuris
General Manager, told Petromindo
recently.
Nara said the firm is in the process
of calculating the reserve.
Kiddo Shallow-1X well is located
close to Kido-1X well, where the firm
also made gas discovery.
PoD (Plan of Development) for
Kasuri block is being discussed (by
Genting) together with SKK Migas,
Nara said.
SKK Migas signs contract with

Poten & Partners
23
24
25
PDSI unit signs agreement

with GE Oil and Gas
PT Pertamina Drilling Services
Indonesia (PDSI) said its subsidiary
Patra Drilling Contractor (PDC)
has recently signed a cooperation
agreement with GE Oil and Gas
Indonesia.
PDSI, a subsidiary of state-owned
oil and gas firm PT Pertamina, said
in a statement that the cooperation
agreement acovers the areas of
power management system, pressure
control, downhole technology, drilling
technology, and turbine compressor,
all of which are aimed at supporting
the operation and portfolio of PDC.
Elsewhere, PDSI said that it has
also signed a MoU with affiliated
company Pelita Air Service
on cooperation in equipment
maintenance.
EOR completes renegotiation

of CEP acquisition price
ASX-listed Enhanced Oil and Gas
Recovery Limited (EOR) said that it
has re-negotiated the purchase price
26
for the acquisition of Centre Energy

Petroleum Limited (CEP) to reflect
the current market price for oil and
gas while maintaining shareholder
value going forward.
CEP holds an 85 percent
economic/participatory interest
in PT Benuo Taka Wailawi (a joint
venture company with PT Perusda
Benuo Taka, which is owned by
Penajam Paser Utara Regency
administration in East Kalimantan),
which is the holder of an Extended
and Amended Co-operation
Agreement with respect to the
Wailawi oil and gas project.
The Wailawi oil and gas project
covers some 30.74 square kilometers
and is located in the southern part of
the Mahakam Delta Complex of the
petroleum producing Kutai Basin,
12km southwest of Balikpapan in
East Kalimantan, Indonesia.
CEP holds the rights on behalf
of the joint venture company to
operate the Wailawi oil and gas
project pursuant to the Extended and
Amended Co-operation Agreement.
Petromindo|Febry
Mitra: SKK Migas approves

divestment of interest in
North Madura PSC
Privately-held independent oil,
gas exploration firm Mitra Energy
Limited announced recently that
upstream oil and gas authority SKK
Migas has approved the farm-out of
its 25 percent participating interest
in North Madura PSC to Azipac Ltds
unit.
Mitra signed in December of 2014
the farm-out agreement with Azipac
North Madura Ltd. The company
said that SKK Migas approved the
transaction on October 12, 2015.
Consequently, Mitra no longer
has an interest in the North Madura
PSC, Mitra said in a statement.
Azipac also acquired another 25
percent interest in the North Madura
PSC from North Madura Energy Ltd.
The North Madura block
covers approximately 1850 square
kilometers and is located offshore
East Java in water depths of 45
meters.
The block is located in the NE
Java Basin, one of Indonesias most
prolific hydrocarbon producing
areas and is along trend with several

producing fields, most notably the
Ujung Pangkah and Poleng oil and
gas fields.
DSLNG targets to produce 11

cargoes this year
PT Donggi Senoro LNG (DSLNG)

has thus far sent eight cargoes,
planning to produce three more
cargoes until the end of this year.
DSLNGs Corporate Affairs
Director Aditya Mandala said on
Monday that it is now in the process
of delivering the ninth cargo to
Japanese firm Chubu Electric.
As of today (Nov. 30), we have
shipped eight cargoes. Until the end
of this year, we estimate the total
produce to reach 11 cargoes, he said,
adding the buyers are Chubu, Kyushu
Electric and Kogas.
The Donggi Senoro LNG plant in
Central Sulawesi has the capacity to
produce two million ton per year of
LNG. It was owned by the consortium
of PT Pertamina (Persero), PT
Medco Energi Internasional Tbk,
Mitsubishi Corporation, and Korea
Gas Corporation.
27
Petromindo|Khalsa
COVER STORY
REVIEW & OUTLOOK
Power industry
booming big time
By: Cepi Setiadi
il and gas companies

are in the doldrums due
to the sharp drop in oil
prices. Coal companies still
struggle to survive the market slump
which has ongoing for three years.
The only industry in Indonesian
energy sector that is now growing
28
is power thanks to the 35,000 MW

power plant development program
launched by President Jokowi Widodo
a.k.a Jokowi.
The power industry is not
only growing. It is experiencing a
stupendous boom.
In the past, few investors were
interested in Indonesian power

sector, the reason few power
plants have been built in the past
decades. Today, confident of the
governments serious intention to
develop power plants, dozens of
investors from around the world
are coming to Indonesia to offer
technologies or invest in the 35,000

MW program. Unwilling to be left
behind, Indonesian companies, which
have never been involved in the
power business, are now vying to set
up subsidiaries to participate in the
program.
The 35,000 MW program is
probably the largest economic
development program ever launched
throughout Indonesias history.
For 70 years since independence,
Indonesia has only been able to build
around 50,000 MW power plants.
With the 35,000 MW program, Jokowi
wants to increase to the installed
capacity by 70 percent within five
years.
While some people dismiss the
program as too ambitious, saying it
is impossible to build 35,000 MW
power plants in such a short period of
time, most people agree with Jokowi
that Indonesia needs to build a large
number of power plants to provide
power to all members of the public
(now, 70 years after independence,,
more than 10 percent of the public
still have no access to power) and
Plan of COD per year (MW)

PLTU
PLTP
PLTGU
PLTG
PLTMG
PLTA
PLTM
PS
to establish a strong basis for an

industrial and economic growth in
the future. Industries need power
supply. Adequate power availability
will attract investors to build
industries.
The 35,000 MW program will
not only bring huge positive impacts
on the national economy in the
future when the projects have been
completed, but also at present when
the projects are still being planned or
under construction, stakeholders of
the industry say.
Resources Sudirman Said said during
a recent seminar to commemorate
the National Electricity Day that the
35,000 MW program will create jobs
for at least 650,000 people directly
and 3 million people indirectly.
This is indeed very positive news
at the time many industries, including
the oil and gas and coal industries,
have been forced to lay off workers
as a result of the global economic
slowdown.
Every project needs consultant
helps from preparation to
construction phase and the 35,000

MW program will create jobs for
thousands of consultants in the
country, Erie Haryadi, Secretary
General of the Association of
Indonesian National Consultants
(Inkindo) said.
He said normally consultants get
4 percent of project value in fee. If
realized investment for the 35,000
program reach US$13.2 billion
per year, it will generate Rp 7.12
trillion in revenue for consultants.
Assuming that 60 percent of the
consultancy fee is distributed
among consultants as remuneration,
consultants involved in the projects
will receive a total of Rp 4.27 trillion
per year or Rp 355.83 billion per
month.
Fees of consultant average Rp
40 million per month. And we shall
need approximately 10,000 expert
consultants per month, Erie said
during the seminar.
Erie noted that the involvement
of local consultants in the 35,000
MW program is necessary in line
with the governments policy of
19,319
: Coal fired power plant

: Geothermal power plant
: Combined cycle power plant
: Gas turbine power plant
: Gas engine power plant
: Hydropower plant
: Micro/minihydro power plant
: Pump storage power plant
9,238
6,379
3,793
4,213
2015
2016
Others
PS
PLTA
2017
PLTM
PLTG/MG
2018
PLTGU
PLTP
2019
PLTU
TOTAL
Source: Presentation by Dr. Agung Wicaksono, Vice Chairman of PMO for 35 GW (UP3KN), on Dec. 2, 2015
29
COVER STORY
strengthening the capacity of national
industries and optimizing local
contents in the national projects. The
domestic consultants will be pushed
to be creative and innovative in
solving problems if they are allowed
to get involved in the projects.
Over time, this will increase their
competitiveness.
Erie said at present there
are 121 consultancy firms in the
country which have been certified
as having competency in power
industry. Besides, there are 111,764
individuals whose competency in
power industry have been certified
There are many domestic
consultants who have successfully
provided consultancy service for
various types of power plant projects

in Indonesia, Erie said.
The governments data say the
35,000 MW program will need
approximately US$73 billion,
consisting of $53.7 billion for
development of power plants,
$10.9 billion for installment of
transmission, and $8.4 billion for
installment of substations.
Supangkat Iwan Santoso, Head
of the Indonesian Electricity Society
(MKI) said during the seminar that
one year since the launching of the
35,000 MW program by Jokowi,
some power plant projects have
been realized and are now under
construction.
At least 60 MW diesel power
35 GW financing needs of 72.9 billion US$ to prevent crisis

Mio USD
Sumatra
11,327 MW
76 Power plants 14.282
19,305 ckm 210 Transmission lines 3.840
398 Substations 2.475
32,406 MVA
Mio USD
Kalimantan
2,852 MW
40 Power plants 4.000
7,883 ckm 68 Transmission lines 1.122
115 Substations
3,910 MVA
324
plants which are part of the program

are scheduled to come onstream this
year.
The small-scale power plant
projects are scattered in remote
islands, including those in border
areas such as North Kalimantan
which is close to Malaysia and
Saumlaki Island in Maluku Province,
located close to the Australian
territory
Next, several combined cycle
power plants and wind farms with
a total capacity of 2000 MW, which
are now in procurement phase,
are scheduled to come onstream in
2016, he said.
State owned electricity firm PT
Perusahaan Listrik Negara (PLN) has
Mio USD
Sulawesi & Nusa Tenggara
4,159 MW
83 Power plants 5,434
7,207 ckm
90 Transmission lines 1,169
165 Substations
5,620 MVA
412
LOCATION
Mio USD
Total Indonesia
42,940 MW
46,597 ckm 732 Transmission lines 10,893
1.375 Substations 8,386
108,789 MVA
Total
72,942*
Mio USD
Java-Bali
23,863 MW
11,185 ckm 349 Transmission lines 4,615
672 Substations 5,114
66,083 MVA
*excl. land acquisition, interest during construction (IDC) and taxes

30
Mio USD
Maluku & Papua
739 MW
43 Power plants 992
1,017 ckm
15 Transmission lines 148
25 Substations 61
770 MVA
Legend: MW : Megawatt
MVA : Megavolt ampere
ckm : Circuit kilometers
signed Power Purchasing Agreement

(PPA) for some large-scale projects
and will sign more in the coming
months.
Large-scale power plants
normally take between four to five
years to develop. This is the peak
time for the signing of PPA for largescale power plants. The peak time for
construction will be in 2016, 2017
and 2018, Supangkat said, adding a
large number of workers and locallyproduced materials will be needed
during the construction period.
According to Supangkat, all the
projects are expected to be near
completion by 2019. The most
challenging activity at present is
procurement. Once it has been
completed, the projects will step into
construction phase, in which delivery
of goods is a challenging activity, he
said.
Supangkat projected PPAs for a
total of 10,000 MW, particularly for
power plants with a capacity of 1000
MW or more, have been signed by
PLN by the end of this year
Supangkat agreed that the 35,000
MW program will create jobs for
650,000 people directly and 3 million
people indirectly. The 650,000
workers will carry out activities
directly related to the development
of the 35,000 MW projects such
as construction, maintenance
and procurement, while the 3
million workers will be involved in
supporting activities.
For instance, if we plan to build
a tower, there will be people hired
to build the tower. Meanwhile, there
are also people who work in the plant
that produce the tower. These are the
people who are indirectly involved in
the tower project. And the number of
people that will be indirectly involved
in the 35,000 MW program could be

more than 3 million, he said.
Supangkat said financing for the
35,000 MW program has not been
entirely secured. But, the interest of
financial industry in the projects is
very high. We are thus optimistic, all
the projects will secure financing, he
said.
Herman Daniel Ibrahim, Head of
the Association of Indonesian Private
Power Plants (APLSI) noted that
the start of the boom in the power
industry is already notable. Several
projects already create a lot of jobs
despite the fact they are still in
preparation.
The peak of the 35,000 MW
projects is happening now and will
continue through 2019, Herman
said.
Look at the expansion projects
of Cilacap and Cirebon power plants.
They already absorb a larger number
of manpower and need supports
from local manufacturers, he said,
referring to three large-scale power
plant projects of the 35,000 MW
program that have signed PPA with
PLN.
The PPA for the Cilacap Phase II
Expansion project was signed on Oct.
30, 2015. The 1x1000 MW power
plant project is owned by PT Sumber
Segara Primadaya (S2P), which is
the consortium of PT Sumber Energi
Sakti Prima (51 percent) and PT
Pembangkitan Jawa Bali (49 percent),
a subsidiary of PLN. S2P already
operates a power plant, called PLTU
Cilacap with a capacity of 2x300 MW
Cilacap, Central Java. It is developing
the Cilacap Phase I expansion project
with a capacity of 1x660 MW, which
is scheduled for completion this year.
The Cilacap Phase II Expansion
project worth $1.094 billion is
scheduled to achieve Commercial

Operation Date (COD) in the first
quarter of 2020.
Meanwhile, the Cirebon power
plant project is owned by PT
Cirebon Energy Prasarana (CEP), a
consortium comprising of Marubeni
Corporation, Indika Energy Tbk,
Samtan Co. Ltd, Korea Midland Power
Co. Ltd, and Chubu Electric Power Co.
Inc. The consortium already operates
a 1x600 MW coal-fired power plant,
called PLTU Cirebon, in Cirebon, West
Java. It is expanding the power plant
by building another power plant with
a capacity of x1000 MW. The PPA
for the project was signed on Oct.
23, 2015. The $2 billion project is
scheduled to achieve COD in the first
semester of 2020.
CEPs President Director Heru
Dewanto admitted that the firm has
started recruiting a large number of
workers for the expansion project.
We are now in the construction
phase. We need around 3,000-strong
workforce for the expansion project,
he said.
Once the project has been
completed, the firm will employ
around 300 professionals, including
nine expatriates, to handle operation
and maintenance at the new power
plant.
Heru explained that the project
whose PPA was signed on Oct. 23,
2015, will need around $2 billion in
investment. The financial closing is
expected to be achieved in May 2016.
According to the governments
data, there are 291 power plants
with a total capacity of 42,940 MW
that will be built under the 35,000
MW program. When he launched
the program late last year, Jokowi
wanted 35,000 MW new power plants
to be developed. By the time the
31
Petromindo doc.
COVER STORY
program was launched, there were

several power plant projects with a
combined capacity 7,940 MW which
were under construction by PLN
and Independent Power Producers
(IPP). The ongoing projects were later
including in the 35,000 MW program,
bringing the total capacity to be built
under the program to 42,940 MW. Of
the 35,000 MW new power plants,
the government initially assigned
PLN to build 10,000 MW, offering
the remaining 25,000 MW to IPPs.
However, due to PLNs financial
problem, PLNs quota was reduced to
5,000 MW, while the IPP quota was
increased to 30,000 MW.
Aside from the power plants, 732
transmission lines with a total length
of 46,597 km and 1,375 substations
with a total capacity of 108,789 MVA
will be built by PLN to ensure that the
power from the new power plants
can immediately transmitted once the
projects have been completed.
32
Iwan Purwana, PLNs Head of

Strategic Procurement Division,
said the projects should be a boon
for manufacturing companies that
produce products for electricity
projects, such as towers, cables and
transformers. PLN will need. 301,300
km aluminum conductors, 2,600 units
of transformer and 3.5 tons of steel.
He said PLN is committed to
prioritizing local manufacturers to
supply the products. However, the firm
is not sure the local manufacturers will
be capable of meeting all the needs
of the power projects. In the past, the
local content of PLNs power projects
was less than the minimum level
required by the government due to the
lacking capacity of local manufacturers.
PLN was forced to import many
materials for its power plant projects
due to the unavailability of such
materials on the domestic market.
Saleh Husen, Minister of Industry,
admitted that the participation
of local manufacturers in the

previous power plant projects was
limited, less than 20 percent of the
project. He however insist that local
manufacturers should be prioritized
to provide materials for the 35,000
MW program.
There are many products to
support the 35,000 MW program that
have been produced locally such as
boilers, turbines, transformer, cables
and others. Our local manufacturers
can supply such products, he said
during seminar.
Meanwhile, Minister of Manpower
M Hanif Dhakiri welcomes the 35,000
MW program as it will create a lot of
jobs for the Indonesian people.
He noted however the quality
of Indonesian workers is still
low. There are now 140 million
workers in Indonesia who are very
uncompetitive as 45 percent of them
are elementary and junior high school
graduates.
ECONOMIES OF SCALE OF 35,000 MW PROGRAM

Investment : US$72.9 billion**
291 power plants
732 transmission lines

(75,000 towers)
1,375 substations
301,300 km of aluminium conductors

2,600 transformers
3.5 million tons of steel
Employment
Direct: 650,000
Indirect : 3 million
Local Industry
~40% of investment
(~$29.2 billion)
*Estimate
**Excl. land, Interest During Construction (IDC) and taxes
33
Courtesy of ABB
POWER
ABB opens switchgear plant
BB, the leading power and

automation technology
group, announced recently
the inauguration of a new
manufacturing facility for mediumvoltage air-insulated switchgear
(AIS), located in Tangerang, Banten.
The move is part of ABBs
$20-million investment plan for
Indonesia which includes last years
opening of a new factory for lowvoltage products in Cibitung, West Java.
Switchgear produced by the
new factory will facilitate efficient
and reliable power distribution and
help address the increasing demand
for electricity, driven by rapid
urbanization and a growing industrial
sector. In addition to serving the
countrys needs, the unit will also
serve as an important supply hub for
the region.
This state-of-the-art facility will
help us address the growing power
distribution sector and underlines
ABBs commitment to Indonesia and
South Asia said Bernhard Jucker,
34
President of ABBs Power Products

division. The investment supports
our global footprint approach and is
in line with ABBs Next Level Strategy
aimed at accelerating sustainable
value creation and focusing on
growth markets.
The 3,700 square-meter plant
will manufacture a range of mediumvoltage AIS such as ABBs UniSwitch,
UniSec, UniGear and UniGear Digital,
representing some of the latest
innovations in medium-voltage
switchgear. The new semi-automated
factory has been designed for lean
manufacturing operations with the
capability to produce over 4,000
switchgear panels a year.
ABB has more than a million
AIS panels installed in over 100
countries, used in demanding
locations such as offshore platforms,
liquefied natural gas (LNG) or cruise
ships and mines, as well as in more
common applications, like in the
manufacturing industry, utility
substations, power plants, chemical
plants, data centers, wind farms and

major sporting venues.
In a power system, switchgear is
used to control, protect and isolate
electrical equipment to ensure the
reliability of the electricity supply.
Switchgear products deploy different
types of insulation medium, the
most common ones being air, gas
and oil. ABB has more than 80
years experience in switching
technology and has pioneered several
innovations over the past decades.
ABBs Medium Voltage Products
business unit provides utility,
industrial and commercial customers
with safe, reliable and smart
technologies for the distribution
of electricity. The extensive global
offering includes distribution
automation products, switching,
limiting, measuring and sensing
devices, switchgear, modular
substation packages and related
services.
Romel S. Gurky
35
JANUARY
Govt set up special power task force
The government set up a task
force to implement the development
of the 35,000 MegaWatt (MW) power
projects, which is called as UP3KN.
Energy and Mineral Resources
Minister Sudirman Said stated
on Tuesday (Jan. 13) that the
development of the 35,000 MW
power projects requires the
involvement of several related
ministries and government

institutions. To accelerate the
power development by PT PLN,
the government has set up the
UP3KN as has been ruled in the
energy and mineral resources
ministrys regulation no.3/ 2015. The
government appointed Nur Pamudji,
former president director of PT PLN,
to manage the new task force.
Govt issues 2 regulations

to speed up power projects
Resources (MEMR) Sudirman Said
issued two regulations to speed up
the development of power projects.
The two regulations are MEMR
Decree No.74K/21/MEM/2015 on the
Endorsement of the Electrical Power
Provision Plan (RUPTL) of PT PLN
(Persero) for Year 2015-2024; MEMR
Regulation No. 3/2015 on Procedures
for the Purchasing by PT PLN Persero
of Electrical Power from mine mouth
PLTU (coal fired power plant), PLTU,
PLTG/PLTMG (gas turbine power
plant/gas engine power plant), PLTA
(hydrpower plant) through Direct
Appointment.
(Both regulations) aim to push (the
development of) power plant projects,
36
particularly the 35,000 MW program,

Sudirman said during a press
conference organized by the Forum of
Power Industry Leaders.
According to Sudirman, the two
regulations will make it easier for
PLN to procure goods and gives its
flexibility in setting its purchasing price
for power from Indpendent Power
Producers (IPP) without prior consent
from the MEMR minister.
We have agreed on the range
of selling and purchasing price of
power (to be produced by IPP). Thus,
PLN does not need to come to the
minister for approval as long as the
price is within the price range. This
will expedite the process, Sudirman
said.
FEBRUARY
Pertamina, Akuo Energy team up
to develop renewable energy
State owned oil and gas firm
PT Pertamina signed February 11 a
cooperation agreement with French
firm Akuo Energy to develop power
plants based on renewable energies in
Indonesia.
The cooperation agreement was
signed by Pertaminas Director of
New and Renewable Energy Yenny
Andayani and Akuo Energy CEO Eric
Scotto. The cooperation is focused on
the development of power based on
wind, solar PV, Ocean Thermal Energy
Convertion (OTEC).
Yenny noted that the portion of
new and renewable energy in the
national energy mix now stands at

6 percent and under the National
Energy Policy approved last year,
their portion should be raised to 23
percent by 2025.
She said Pertamina and Akuo
will cooperate in identifying
locations where the three types
of renewable energy can be
developed. As publicly known,
the government is paying more
attention to remote areas which still
rely on diesel plants. At present,
we are focusing on such areas,
she said in a statement released by
Pertamina.
Vestas, AGCP sign wind power MoU

Vestas Wind Systems (Vestas) of Denmark and Asia
Green Cappital Partners (AGCP) of Singapore have signed
in Jakarta a memorandum of understanding to develop a
20-Megawatt wind power plant in West Timor, East Nusa
Tenggara (NTT).
Vestas Wind system is a Danish based company which
has been internationally recognized as the manufacturer
of wind turbine. The Asia Green Capital Partners is a
Singaporean company which has already had a wide
portfolio as a renewable energy developer across
Southeast Asia.
Both Vestas and Asia Green did not give any further
details about the wind power project. But the two

companies stated that Indonesia is a potential market for
developing wind power plants as only around 75 percent of
its population have access to electricity and the Indonesian
government has wanted to diversify its energy sources to
renewable ones, including to the wind power plants.
Vestas APAC Chief Operating Officer Danny Nielsen said
during the MoU signing ceremony in the Danish Embassy in
Jakarta on Thursday (February 12, 2015) that his company
sees Indonesia as having a great demand for electricity
supply development and the wind power can get its share
to meet the rising demand.
37
MARCH
Govt launches power wheeling scheme
The Ministry of Energy and Mineral
Resources (MEMR) has issued a
regulation allowing the usage of
available transmission networks by
other parties.
The MEMR Regulation No. 1/2015
on Cooperation in the Provision of
Electric Power and Joint Utilization of
Electric Network allows the existing
transmission lines, which are mostly
owned by state owned electricity firm
PT Perusahaan Listrik Negara (PLN),
to be used by other parties.
38
The practice is known in the

industry by the term power wheeling.
Wheeling refers to the transfer of
electrical power through transmission
and distribution lines from one power
service area to anothers. Wheeling
allows a power company in certain
power service areas with too much
supply to transmit its excess power
to other power service areas with too
much demand.
At present, all power companies
must sell its power to PLN and
have to sign a Power Purchasing

Agreement (PPA) with the state firm
for the purpose. Such firms are
called Independent Power Producers
(IPP). With the new regulation, the
government wants to promote
another type of power business
that is Private Power Utility (PPU),
which are granted the permit to build
power plants in certain power service
areas rather than signing a PPA with
PLN, according to the ministry in a
statement.
MARCH
JGC to build 1,000 MW in Papua
Japan Gasoline Co. Ltd (JGC) plans
to build a 1,000 MW power plant in
Papua, using low rank coal as fuel.
The plan was unveiled by
JGC Groups Chairman Emeritus
Yoshihiro Shigehisa during his
recent courtesy call to Vice
President Jusuf Kalla. During
the visit, Shigehisa asked the
government to support the firms
plan. The power plant will be located
in Sorong, West Papua and the firm
will build a 50 MW capacity in the

beginning.
JGC Coal Fuels President Director
Tetsuo Fujita said the investment
needed to build the 50 MW capacity
is between US$200 million $300
million. The firm will kick off the
project this year by land preparation
or groundbreaking.
Sofjan Wanandi, Head of Vice
President Expert Team, said JGC
will use low rank coal as fuel of the
power plant, the type of coal which

is available in abundance in eastern
Indonesia and is not qualified for
exports. JGC chose to build the
power plant in eastern Indonesia
because the region still lacks power
supplies.
He also noted that JGC also plans
to build LNG receiving terminals in
Indonesia.
According to Shigehisa, Kalla
welcomes the firms plans.
Multinationals bid for Sumatra-Java

transmission project
Five multinational corporations
Siemens of Germany, Hitachi of
Japan, Toshiba of Japan, ABB of
Swiss, Marubeni of Japan, Alstom of
France took part in the tender for the
construction of power transmission
lines from South Sumatra to West
Java.
ABB was bidding for the project
in a consortium with Marubeni, while
Alston teamed up with Indonesian firm
PT Wijaya Karya, Nasri Sebayang,

Construction Director of state owned
electricity firm PT Perusahaan Listrik
Negara (PLN), said recently.
The project involves the installation
of power transmission lines from
Bangko Tengah area in South Sumatra
to Bogor, West Java. Thanks to the
transmission lines, coal-rich South
Sumatra, where a number of coalfired power plants are now under
construction or have been planned

for construction, can send its power
production to Java. A section of
the power plant will be installed
underwater in Sunda Strait.
Cables used for the 700-km power
are of DC type rather than AC type
since on the grounds that power
losses reach 20 percent using AC
cables, while the losses reach only 5
percent using DC cables, he said.
39
APRIL
Investors flock to 35,000 MW projects
Investors response to the
governments 35,000 MW is so far so
good. The Investment Coordinating
Board (BKPM) has passed a dozen of
business permits for foreign investors
to build power plants with a total value
of US$8.94 billion in the first quarter
of this year.
The 12 permits will facilitate power
projects that will produce nearly
6,000 megawatts (MW) of electricity
nationwide. The capacity is expected
to be produced by various kinds of
power plants ranging from hydro to
coal-fired and will contribute to the
production of an addition of 35,000
MW of electricity for the country by
2019.
BKPM deputy director for
investment planning Tamba Hutapea
was quoted by The Jakarta Post as
40
saying recently that the figure for the

planned investments was more than
10-fold the $780 million recorded in
the initial quarter of last year.
We see that the one-stop licensing
service has helped raise interest in
the electricity sector, as seen by the
significant jump in investment plans,
he said during a press briefing at his
office.
Out of the overall figure, the
largest sum of $6.26 billion will come
from a Chinese investor, followed
by $1 billion from three Japanese
firms and $444 million from five
Singaporean firms, according to
BKPM data. The 15 power projects
are set to be developed in 12
provinces on Sumatra, Java, Sulawesi
and Maluku.
Apart from the licenses given to
foreign investors, the board has also

granted permits for 17 power plant
projects funded by local firms worth
Rp 3.45 trillion (US$265.64 million) in
the January to March period.
The BKPM has been appointed
by President Joko Widodo to handle
all licensing process for investment
as part of the governments efforts
to simplify the licensing process and
remove bureaucratic hurdles that
have been a subject of concerns
of all investors in the past. All
ministries have transferred their
licensing authority to the board. In
the update on investment permit
reforms, the board claimed that it
would be able to shorten the permit
process for electricity investment
from the present 923 days to 256
days.
MAY
Chinese firm plans nuclear
power plant in E. Kalimantan
China General Nuclear Power
Company (CGNPC) plans to build
nuclear power plants with combined
capacity of more than 1,000 MW in
East Kalimantan, teaming up with
Indonesias state-owned PT Industri
Nuklir Indonesia (Inuki).
Inuki President Director Yudi
Utomo stated that ground-breaking of

the project is targeted to be held in
2019. He added that the project will
be implemented in several stages, with
the first stage targeting a capacity
of 50 MW. Investment requirement is
estimated at between US$ 1.5 million
and $ 2.5 million per MW.
Separately, East Kalimantan

Governor Awang Faroek Ishak said
that the planned investment by
CGNPC forms part of the provincial
administrations ambition to develop
nuclear power plants in the province
as a source of cheaper and clean
energy.
Jokowi kicks off several

power plant projects
has officially kicked off the
construction of several power plant
projects in the country, which are
part of the 35,000 MW power plant
program.
The event was held on May 4, 2015

in Samas, Bantul regency, Yogyakarta,
where one of the power plant projects,
PLTB Samas wind farm, is located.
During the event, Jokowi also
witnessed the signing of several
Power Purchasing Agreements (PPAs)

by state owned electricity firm PT
Perusahaan Listrik Negara (PLN) and
Independent Power Producers (IPP),
and Letter of Intent (LOI) of EPC for a
power project.
KOMIPO starts construction

of Lampung hydro power plant
Korea Midland Power Co.
(KOMIPO) has started construction of
the Semangka hydro power plant in
Lampung Province. This is the second
development project in Indonesia,
following the Wampu hydroelectric
project in 2011.
KOMIPO said in a statement
recently the Semangka
hydroelectric power plant project
will have a construction period
of two years and seven months
from now and be completed in

Sept. 2017. The project includes
an electricity sales contract that
the Indonesian government will
guarantee, and its state-owned
electricity company PT PLN will
purchase the electricity, the
company added. KOMIPO expects
to turn over approximately 128
billion won (US$118.42 million) by
selling electric power for nearly 30
years after the development.
41
JUNE
ADI Systems gets contract from Wings
ADI Systems Asia Pacific, a
subsidiary of Canadian firm ADI
Systems Inc., announced it has
received a contract from Indonesias
widely-diversified conglomerate
Wings Group for the design,
construction, and installation of a
waste-to-energy plant at the latters
palm oil mill in Jorong, South
Kalimantan.
The waste-to-energy plant will be

built by PT Gawi Makmur Kalimantan.
Biogas will be produced from the
fermented Palm Oil Mill Effluent
(POME) and utilized as a fuel. The
biogas will be utilized in a gas engine
to produce electrical power to be
used by the mill, replacing diesel
generators.
The ADI-CGR selected for
this project is an engineered high

yield in-ground anaerobic system
used predominantly for bioenergy
production (in the form of biogas).
The design of the system facilitates
efficient mixing between the anaerobic
sludge and the feedstock, and
separates the hydraulic and solids
residence to maximize biogas
production and solids breakdown.
INPEX acquires Medcos

interest in Sarulla
Japanese firm INPEX Corporation
announced that it has agreed with a
consortium of Japanese, Indonesian
and US companies to indirectly
participate, by acquiring 49 percent
of an affiliate of PT Medco Power
Indonesia (Medco), in the Sarulla
Geothermal Independent Power
Producer (IPP) Project in North

Sumatra.
The worlds largest singlecontract geothermal power project
is expected to contribute to meeting
local power demand and developing
the Indonesian economy, the firm
said.
UK investors to pump $4b into

RIs solar, tidal energy
Investors from the United
Kingdom have expressed interest
in planting a combined US$4.01
billion in Indonesias renewable
energy sector, the Investment
Coordinating Board, or BKPM, said
in a statement.
The investments will be in solar
energy, higher than 10 megawatts,
and offshore tidal energy, said
Himawan Hariyoga, the BKPM deputy
42
in charge of investment promotion.

Some of the companies have asked
our help in finding potential local
partners in Indonesia.
Investment realization in the sector
that can contribute to environmental
preservation have reached around Rp
486 trillion ($37 billion), or 30 percent
of the total investment plan of Rp
1,600 trillion recorded by BKPM from
2010-2014.
JULY
Govt raises hydropower tariff
Resources (MEMR) has decided
to increase the tariff of electricity
generated from hydropower plants,
hoping to encourage investors to build
more hydropower plants.
The tariff increase is stipulated on
the energy and ministerial regulation
number 19/2015 on the purchase
of electricity from hydropower plants
with a capacity of up to 10 megawatts
(MW) by the state owned electricity
company PT PLN.
The MEMRs New and Renewable
Energy and Energy Conservation
Director General Rida Mulyana said
that the new ministerial regulation is

part of the governments commitment
to use water resource for electricity
generation.
He stated that with the new
regulation, the hydropower
investors will get attractive
prices, while the government
can expect the developers to be
fully committed to developing
the hydropower plants. With the
new regulation, we hope no more
developers will slow down their
developments of hydropower plants
although they already got their
permits, he added.
ISDN begins construction of

hydropower plant in S. Sulawesi
SGX-listed ISDN Holdings Limited,
an integrated solutions provider for
diverse industries, is on track to
developing the 9.7 megawatt (MW)
Datara mini-hydropower plant (MHPP)
in South Sulawesi, Indonesia as it
witnessed its recent ground breaking
ceremony by officials from the local
Gowa District Government - the joint
venture partner of the hydropower
project.
ISDN said in a statement that
attending the ground breaking
ceremony included the Gowa Regent
Ichsan Yasin Limpo as well as the
South Sulawesi Governor, Syahrul
Yasin Limpo.
The District Government,
through its holding company, Gowa

Perusda, owns 20 percent of the joint
venture entity while ISDN through
its Indonesian subsidiary, PT SDM,
owns 49 percent and a local business
partner PT Bukit Lau owns the
remaining 31 percent.
PT SDM will offer support in the
form of financing and developing
the infrastructure of the Datara
MHPP while the Gowa Government
will assist in the necessary land
acquisition as well as the obtainment
of the requisite relevant permits
and approvals such as the in
principle approval and location and
environmental clearance permits,
ISDN explained.
43
AUGUST
PLN books huge loss,
pleading for help
State owned electricity firm PT
Perusahaan Listrik Negara (PLN)
recorded a huge loss totaling Rp
10.5 trillion in the first semester of
the year, a reversal from a profit of
Rp 14.5 trillion in the same period
of last year, despite of increase in
sale and power, according to the
firms first-half unaudited financial
report.
The firm ascribed the huge loss
to foreign exchange loss which
amounted to Rp 16.9 trillion in the

first semester of the year, compared
to a foreign exchange gain of Rp 4.4
trillion in the same period of last year,
the firm said.
The firm buys power from the
Independent Power Producers (IPP)
at fixed prices in dollar, while sell the
power to the public in rupiah. PLN
pocketed Rp 11.7 trillion in net profit
last year after suffering a Rp 30.9
trillion net loss in 2013.
Pesanggaran 200 MW power

plant begins operation
The Pesanggaran 200 MW gas and
diesel-fired power plant started Aug.
28 commercial operation, supplying
electricity to the power system on the
resort island of Bali.
The power plant, owned by PT
Indonesia Power, a subsidiary of stateowned electricity firm PT PLN, can be
run on gas, MFO, or HSD.
Developed by a consortium
44
comprising of Finlands Wartsila (as

provider of the technology and lead
partner), and Indonesias state-owned
construction and engineering firm PT
Pembangunan Perumahan, the power
plant is dubbed as the largest gas
engine power plant in the country.
The power plant receives gas
from Sengkang block, in South
Sulawesi.
AUGUST
Aggreko to invest $40m in RI
Aggreko, the Glasgow, UKbased temporary power and cooling
specialist, is pumping further
investment into Indonesia totaling
some US$40 million.
The group has been operating in
the country for more than six years
through its local venture, PT Aggreko
Indonesia, employing some 100
people in several locations, Scotsman.
com reported.
It currently has around 210
megawatts of generating capacity
operational and recently secured
contracts in the mining and utility
industries to the value of $10 million.
This includes work supporting the
Sumatra Gold and Copper mine over

a five-year period and providing sixmonth emergency power for Bintan
Island.
The planned fleet investment
will total $40 million over the next
three years, with Aggreko set to
open a new depot within the Jakarta
area. Equipment will come from the
groups manufacturing facility in
Dumbarton.
Robert Wells, managing director
for south-east Asia, said: Aggreko
continues to believe in the market
opportunity that exists in Indonesia
and supports all current and future
employees in the country.
45
SEPTEMBER
IFC, Asia Green Capital to develop wind power
The International Finance
Corporation (IFC), a member of the
World Bank Group, and Asia Green
Capital Partners Pte Ltd, a renewableenergy developer and investment
company, have taken another step
in co-developing the first wind-power
project in Indonesias South Sulawesi
province to help the country increase
its clean-energy supply and stimulate
the local economy.

As part of the celebrations of
the 70th anniversary of Indonesias
independence, PT Energi Angin
Indonesia a subsidiary of Indo
Wind Power Holdings Pte Ltd
that is wholly owned by Asia
Green Capital Partners and the
Government of South Sulawesi
recently signed a memorandum
of understanding to develop the

62.5 MW Jeneponto 1 wind farm.
It will be tied to the South Sulawesi
electricity grid and is expected
to produce a net annual energy
yield exceeding 200 GW enough
electricity to supply to more than
450,000 people and help avoid
120,000 tons of carbon dioxide
emissions a year.
Jokowi kicks off PLTU Batang

kicked off the construction of the
2x1000 MW PLTU Batang coal-fired
power plant in Central Java.
The groundbreaking ceremony was
attended by a number of ministers,
companies leaders, and local leaders.
The construction of the US$4
billion key project suffered lengthy
delays after its developer BPI
faced difficulties in completing the
acquisition of the required 226.4
46
hectares of land amid opposition

from some land owners and
environmental activists. Upon the
instruction of the government, late
last year, PLN stepped in to help
the firm acquire the lands. Still,
until the groundbreaking of the
project, the land issue remained
unsettled.
According to Ferry, there are still
11.1 ha of lands which BPI is still
unable to appropriate for the project.
Jokowi said Governor Ganjar has

promised to settle the land issue
within a month. There shouldnt
be any projects which are stalled
because of licenses, because
of land appropriation. This is an
evidence that the Government
of Indonesia is able to solve the
existing problems. There shouldnt
be any doubts remaining on the
part of investors, the president
said.
OCTOBER
ADB approves $500m loan
for RI energy sector
The Asian Development Bank
(ADB) has approved a US$500
million loan, including $100 million
from the ADB-administered ASEAN
Infrastructure Fund, to help stimulate
Indonesias energy sector, support
the governments reform agenda, and
unleash the sectors potential as a
key engine of sustainable economic
growth.
Indonesias energy sector has

suffered severe underinvestment
due to long-standing subsidies
on fuel and electricity. This has
resulted in poor access to modern
forms of energy despite the
countrys vast energy resource
endowment, said Pradeep
Tharakan, Senior Energy Specialist
in ADBs Southeast Asia Regional
Department in a statement.
The funds will support President
Joko Widodos reform agenda to
improve overall governance in the
energy sector by lowering subsidies,
adopting cost-recovery-based tariffs
and boosting the performance of
state-owned enterprises such as PT
Perusahaan Listrik Negara (PLN), the
state-owned electrical utility.
CG wins $62m order from PLN

for power transformers
Indias leading conglomerate
Avantha Group Company CG has
bagged an order from state owned
electricity firm PT Perusahaan Listrik
Negara (PLN) to manufacture and
supply power transformers, valued at
US$62 million.
The scope of work includes
design, manufacture, supply,
construction and installation of the
power transformers in the range

of 30MVA to 268MVA. They will be
installed in Java, Sumatra, Kalimantan
and Sulawesi. The project is aimed at
enhancing the performance of PLNs
transmission grid, the firm said in a
statement.
Power transformers are very
critical equipment for PLN considering
the present power situation in
Indonesia. CG products meet the

stringent quality parameters of
PLN, particularly in terms of Partial
Discharge, wherein its standards
far exceed the IEC standards and
the Degree of Polymerization, thus
ensuring long lasting, trouble-free
operations. Their compact design
maximize space utility and achieve
optimum energy efficiency.
47
NOVEMBER
Crompton Prima starts construction
of RIs first switchgear plant
PT Crompton Prima Switchgear
Indonesia (CPSI) has started the
construction of Indonesias first
switchgear production facility with a
ground-breaking ceremony on Monday
(Nov.2).
CPSI is a joint venture between PT
Prima Layanan Nasional Enjiniring, a
subsidiary of state-owned electricity

firm PT PLN, and CG International
Holdings Singapore Pte Ltd, a unit of
Indias Crompton Greaves Ltd (CG).
The US$22.5 million high voltage
and extra high voltage switchgear
plant, located at the Cikande Modern
industrial estate in Serang, Banten,
is expected to start commercial

operation in the second quarter of
next year with annual production
of 1,000 units of SF-6 gas circuit
breakers, 2,000 units of lightning
arresters, and 4,000 units of
instrument transformers, at voltage
level of 70 kV to 500 kV.
Special agency planned to

purchase renewable electricity
The government is drafting a
regulation to set up a special agency
tasked with purchasing electricity
from power plants fueled by new and
renewable energy sources in a bid
to help accelerate investment in the
sector, Director General of New and
Renewable Energy Rida Mulyana said.
Rida said that the special agency

will purchase the electricity based on
the new feed in tariff and re-sell it to
state-owned electricity firm PLN at
lower price. The price difference will
be covered by the government.
He said that PLN has been
reluctant to buy electricity from new
Batam-Bintan electricity
interconnection inaugurated
Acting Governor of Riau Islands
Agung Mulyana has recently
Batam-Bintan 150 kV electricity grid
interconnection, helping to temporarily
resolve the power crisis on Bintan
Island.
An inauguration ceremony
was held in Tanjung Uban, Bintan
Regency, on November 10. In
48
the same day, the governor also

3x3 MW PLTMG Dompak gas
engine power plant in Tanjung
Pinang.
Agung said that the inauguration
of the two projects would help resolve
the power shortage in Bintan as
electricity will be distributed from
Bantam.
and renewable sources due to the

high price.
He pointed out for example
that currently there are 171 power
purchase agreements on electricity
produced by micro hydro power plant
projects which have yet to be signed
by PLN.
DECEMBER
Government to simplify regulations
on waste-to-energy projects
instructed the simplification of existing
regulations on waste-to-energy
projects to help accelerate investment
in the sector.
Jokowi said that there are huge
interests among private investors
to process waste into energy
power plants but existing regulatory
environment has been seen as a major
obstacle.
He was speaking at the opening

of a limited cabinet meeting on the
processing of waste into power
energy at the presidential office.
Jokowi said that accelerating
investment in the waste-to-energy
projects will help clean up the
problem of huge pile of waste in
major cities in the country. It will
also help meet the governments
target for new and renewable
sources of energy to account for 23

percent of the countrys energy mix
by 2025.
Elsewhere, the president
suggested for the possibility
of providing subsidy to stateowned electricity firm PT PLN
in purchasing electricity from
waste-to-energy power plants to
help accelerate investment in the
sector.
Korindo to develop 10 MW biomass

power plant in Pangkalan Bun
PT BioGreen Power Kobar, a
subsidiary of Korindo Group, is
planning to develop a biomass power
plant with the capacity of 10 MW at
Pangkalan Bun, Kota Waringin Barat
Regency, Central Kalimantan Province.
Geunhyo An, Director of the
company told Petromindo on
Wednesday that the project will use
mangium (Acacia mangium) and pelita
(Eucalyptus pellita) wood as the feed
stock.
He said the company has
proposed the project to the
directorate general of new, renewable
energy and energy conservation
(EBTKE) at Ministry of Energy and
Mineral Resources.
We expect to obtain license
from EBTKE this month and sign the
power purchase agreement (PPA) with
PLN (state owned electricity firm PT
Perusahaan Listrik Negara) next year.
After that, well start the development
of the project, he said adding
investment for the project may reach
US$20 million or around $2 million
per MW.
We shall develop the power plant
by ourselves. We thus far have no plan
to cooperate with other parties, he
said adding that the company will use
South Korean or Japanese technology
for the power plant.
To provide feedstock for the

power plant, the company is planting
mangium and pelita trees on about
70,000 ha of lands.
We will need around 120.000
tons of biomass per year for
the power plant and it is not a
problem since we have abundant
mangium and pelita trees, he
said adding that Korindo Group is
experienced in developing such
power plant.
We already have a 7.3 MW
biomass power plant which was built
to support our operation in Pangkalan
Bun. The excess power is sold to
PLN, he said.
49
Petromindo|Khalsa
OIL&GAS
50
REVIEW & OUTLOOK
Bad years for

oil industry
his year is indeed a bad one

for the oil and gas industry
as the oil price continues to
decline, hitting the lowest
level in seven years in December.
Oil players and analysts universally
believe no recovery will happen next
year and the oil price could even fall
further.
In Indonesia, the government
vows to keep the oil and gas industry
attractive for investors amid the
difficult situation by providing
various incentives.
It is indeed a very difficult
situation. We can do nothing to
change it. But the government will
continue doing its best (to attract
investors), Djoko Siswanto, Director
for the Management of Upstream
Activities at the Directorate General
of Oil and Gas, said.
Oil price was consistently low
throughout the year since its first
collapse in late last year. Many
expected oil producing countries
to cut to their production to raise
the price. However, the price was
tumbling further after the OPEC
countries, which account for a third of
global production, refused to cut their
production in their last ministerial
meeting of the year in early
December. The OPEC countries even
pumped more crude in November
despite the weak price, according to
reports.
As of this writing, the West Texas
Intermediate (WTI) crude hit above
$35 per barrel, while the Brent
price dipped below $38, the lowest
throughout the year. A year ago,
Brent and WTI crudes were trading
at around $60 a barrel, and above
$100 in July and August 2014. WTI
low during financial crisis in 2008
was above $32, while Brent low was
above $36.
In its December 2015 report,
investment bank Goldman Sachs said
oil price risks further declining in the
near term due to storage capacity
constraints. In the near term, we see
risk of reaching storage capacity in
the oil market which could force spot
prices to cash costs of around $20 per
barrel, the bank added.
Meanwhile, energy watchdog
International Energy Agency said
crude prices could continue to decline
next year. When we look at 2016, I
dont see many reasons why we can
see upward pressure on the prices
Demand is weaker and we may well
see Iran come back (to the market)
and there will be a lot of oil, Fatih
Birol, IEAs Executive Director, said in
December.
The oil price collapse has dealt a
heavy blow to the global oil and gas
industry, substantially cutting the
revenue of all companies, forcing
Petromindo|Khalsa
By: Johannes Simbolon, Bernard Lubis & Febry Silaban
Djoko Siswanto
many of them to lay off many workers

and suspend investment plan.
As of October this year, the
collapse in oil prices has claimed
more than 200,000 jobs worldwide.
Leading the bloodbath are the oilfield
51
service giants; Schlumberger has axed

more than 20,000 oilfield service
workers, about 15% of its staff.
Rival Halliburton is cutting 18,000,
Weatherford International 14,000,
and Baker Hughes 13,000. Among
the big integrated oil companies
Royal Dutch Shell appears to have
the highest total with 7,000 laid off,
Forbes magazine reported.
And the pain has been felt much
farther afield. Equipment giant
Caterpillar has cut 5,000, Siemens
13,000. Makers of steel drilling
pipe have been hit, as have miners
of sand used in fracking and the
manufacturers of rail cars used to
transport crude oil.
No data is yet available regarding
layoffs in Indonesia. Various reports
indicate many supporting companies
have cut the number of their workers
as oil and companies decided to
reduce activities. They however
rejected the term layoff to describe
the situation.
In May of this year, it was
reported that one of the service
companies that handled the project of
ConocoPhillips Indonesia in Anambas,
Riau Islands Province decided to
stop employing 17 workers. Conoco
said the workers were not laid off.
Instead, their work contracts were
not extended. Conoco conveyed
alternative solution for those whose
contract has ended: four of these
workers have been offered to work
under another contractor, as there is
a match between the job requirement
and the workers capabilities.
Meanwhile, the rest will be offered
in-kind support to set up their own
small business.
ConocoPhillips is currently
reviewing all of its activities to
ensure that they are conducted
52
in the most efficient way possible

while maintaining our safety culture.
Operation activities are reduced,
optimizing all available resources.
This will impact some projects: some
still continue but many of them
cancelled, put on hold, due to end
soon or cease, the firm said in a
statement.
Meanwhile, ExxonMobil Indonesia
(EMOI) announced in April of this
year that it was offering some of
its local staff to resign as the firms
activities have been reduced in
Indonesia.
ExxonMobil Indonesia plans to
offer a voluntary separation program
to a very limited number of staff in
our Jakarta office. Employees will be
treated fairly and in accordance with
their contracts and all applicable
laws, EMOIs spokesperson Erwin
Maryoto said.
As of this writing, upstream
authority SKK Migas has yet to
release the activities of oil and gas
contractors throughout the year.
However, the drop in the activities
was clearly stated in its first-half
report
As of June of this year, SKK Migas
said only eight 2D seismic acquisition
activities had been realized reached,
covering 2,370 km, compared to
the target of 33 activities covering
9,612 km set in the revised Work
Program & Budget (WP&B) for the
whole year. Meanwhile, the number
of 3D seismic acquisition activities
that had been realized was only four
covering 425 sq km, compared to the
revised WP&B whole year target of
13 activities covering 5,995 sq km.
Based on field monitoring and
contractors readiness, SKK Migas
projected only 15 activities of 2D
and 3D seismic acquisition will be
Petromindo|Lucky
OIL&GAS
realized for the whole year, a mere 26
percent of the target, according to the
report.
Meanwhile, during the same
period, there were only 25
exploration wells that had been
drilled and the number of realized
re-entry exploration activities was
only seven.
Based on field monitoring and
contractors readiness, SKK Migas
projected the number of exploration
wells that will be drilled throughout
the year is 71 or a mere 17 percent of
the revised WP&B target of 157, while
the number of re-entry activities that
will be realized is nine, or 26 percent
of the revised WP&B target of 27
activities.
SKK Migas spokesperson Elan
Biantoro said the national oil
production is estimated at 790,000
barrels per day (bpd) this year,
slightly higher than 789,000 bpd
Elan Biantoro
Oil price WTI crude oil & Brent crude oil

120
110
100
Dollar per barrel
90
80
70
60
50
40
30
May-14 Jul-14
Sep-14
Nov-14 Jan-15
WTI crude oil
last year, still lower the state budget

target of 825,000 bpd. Gas production
is projected to reach 6,570 mmsfd
this year, lower than the state budget
target of 6,835 mmscfd.
For next year, the state budget
targets oi production at 830,000 bpd
and gas production at 6,470 mmscd.
The 2016 Work Program & Budget
(WP&B) that has been agreed upon
by SKK Migas and contractors target
oil production at 826,000 bpd and gas
production at 6,256 mmscfd.
The 2016 state budget targets the
governments take at $11.65 billion
and cost recovery at $11.09 billion.
The 2016 WP&B however sets a
lower a target for the governments
take, that is $10.77 billion, and much
higher target for cost recovery, that is
$14.92 billion.
This is the consequence of the
falling oil price, Elan said, adding
the Indonesian Crude Price (ICP) is
projected at $50 per barrel next year.
To keep Indonesian oil and gas
blocks attractive for investors, the
governed has taken several measures
starting this year, including raising
Mar-15 May-15 Jul-15

Brent crude oil
Sep-15
Nov-15
the production shares of contractors

in blocks auctioned this year. While
normally, the production is shared
in the ratio of 85:15 for oil and 70:30
for gas with the government taking
the largest portion, the government
in this years block tender offered
Production Sharing Contractor (PSC)
holders production shares of between
30-35 percent for oil and between
35-40 percent for gas, depending on
the locations and characteristics of
respective block.
Starting next year, Djoko said, PSC
holders may propose to negotiate
their production shares.
Until now, production split for
each block has been determined
by the government during tender.
Contractors can only negotiate with
the government on the amount of
signature bonus and firm exploration
commitment. During the tender of
blocks next year, the production split
will be also negotiable, he said.
The new rule will be applied
for both conventional and nonconventional blocks, he said.
Contractors may propose the
production split they want. We shall

only make an owners estimate.
Contractors that propose the largest
production split for the government
will win the tender, Djoko said,
adding the ministry is revising the
existing regulation and standard
operating procedures to allow the
application of the new rule
This is one of the incentives
offered by the government for
investors at the current market
downturn. We hope this incentive can
become a solution, he said.
Aside from incentives, the
government is seeking to remove all
obstacles that have been hampering
oil and gas business activities. One
of the major problems faced by
contractors is related to licensing.
There are many licenses that
contractors need to obtain and the
obtainment process is often tedious
and long due to the complexity of
Indonesian bureaucracy.
President Joko Widodo has
instructed the establishment of the
One-Door Integrated Service at the
National Investment Coordinating
Board (BKPM) to provide one-stop
licensing service for investors.
This year the Ministry of Energy
and Mineral Resources has cut the
number of permits that contractors
should obtain to 42 from 104. And
the ministry has officially delegated
its licensing authority to BKPMs new
service unit.
This year, a total of 12 oil and gas
blocks comprising eight conventional
blocks and four unconventional
blocks have been auctioned. In
view of all the incentives that have
been and will be provided by the
government, Djoko is optimistic that
the ministry will be able to auction a
similar number of blocks next year.
53
OPINION
Staring down the barrel
ndonesia has a long history in

the oil and gas industry with oil
first discovered and produced in
Indonesia in the late 1800s; but
not until 1967 the active exploration
work really began when Indonesia
introduced the Production Sharing
Contract (PSC). The results of
increased exploration drilling since
1967 were encouraging. Numerous
and prolific discoveries were made
in both onshore and offshore. More
than 100 new fields have been
discovered during the period 1967
and 1977, some with reserves
more than 500 million barrels. The
discovery of the E-structure in Java
Sea by Arco in 1969 marked the
54
first commercial oil discovery in

the offshore areas. During the ten
years period the crude oil production
increased more than three times
to 1.7 million barrels a day in 1977
with a recoverable oil reserves of 8.0
billion barrels.
Also in 1977 Indonesia started
its role as supplier of LNG when the
facility at Bontang, East Kalimantan
was opened and followed a year
later by the second plant at Arun,
North Sumatra. Arun gas field was
estimated to have 17 trillion cubic
feet of gas reserves, placing it among
the largest gas field in the world.
The progress or achievements
reflected a total revitalization of the
nations petroleum industry. They

can be attributed for the most part
to a healthy atmosphere created by
the Suharto government in 1967,
and a concerted, yet cooperative,
multinational effort, sided by
technological advances.
While the phase of exploration
boom has resulted in the opening
up of new oil and gas province,
however, the overall activities in the
oil and gas industry slowed down in
1977. This was prompted by revised
sharing formula 85/15 (in favour of
Pertamina); also contributing to this
decline was the US Treasury ruling,
which denied the US companies the
benefit of treating a portion of their
Madjedi Hasan
payments to Pertamina as a credit

against their US income tax return.
The ruling held that such payments
were royalties and no portion could
qualify as a foreign tax credit.
Exploration activities began to
upturn when the government offered
economic incentives and revised the
terms of PSC to specify payment of
Indonesian income tax. Numerous
new oil and gas fields discoveries
were made, however, in terms of
reserves, the size of discoveries
was relatively small, as compared
to those discovered in the early
seventies, but their development
helped offset the productive decline
of some older fields. However,
world economy recession in the
eighties hampered Indonesias
ability to increase or maintain its
production. Fundamental elements
of the petroleum industry started to
weaken as crude prices dropped, i.e.
exploration expenditures declined
and only a few PSCs were signed.
As the decline in oil prices was
relatively short, during the 1988
1999 time period, exploration/
development activities increased, but
at a lower level as compared to in the
1970 and 1980s. While the spending
increased, the average number of
exploratory wells and seismic activities
in the 1990s were below the previous
decades. The increase in expenditures
reflected more to the increase in unit
cost rather than the activity.
Also, since the nineties the
commercial success rate from
exploration drilling declined both
in terms of number and size of
discoveries. In the non-producing
areas, the commercial success rate
(oil and gas) was only about 10
percent versus 14.3 percent for

the period 1971 1991. In the
producing areas, the success rate
was considerably higher, with,
however, an increasing trend in the
number of gas discoveries and also,
overall it was still below the previous
years. In terms of size of reserves,
the majority of oil discoveries in the
1990 were below 25 million barrels.
As a result of declined exploration
activities, Indonesias oil production
has declined now at below 0.8 million
barrels a day, down more than 50
percent from its peak of 1.7 million
barrels a day in 1977. Indonesias
proved oil reserves at the end of
last year stood at 3.7 billion barrels,
compared with 267 billion in Saudi
Arabia and 103 billion in Russia.
Indonesias last significant oil
discovery was the Cepu field in
2001, but its development took a
long time to get off the ground due
Indonesias oil & gas production
to protracted negotiations between

Pertamina and ExxonMobil over
issues like equity split and operation
of the block. The full development
is now running five years behind
schedule on attaining peak output of
165,000 b/d at the block. Exxon and
Pertamina were originally expected
to achieve this level of production in
2009 but that has been pushed back
to 2015 due to delays in the award
of some major EPC contracts for the
development.
In order to maintain oil
production and to increase ultimate
recovery from each field, Enhanced
Oil Recovery (EOR) technology has
also been applied, particularly for
the oil fields operated by Chevron in
Central Sumatra and Total Indonesie
in East Kalimantan. On the Chevrons
operated fields, the EOR technology
(mostly water flood) has been
carried out in the early life of the
MBOED
Gas
Oil
3,000
2,500
2,000
1,500
1,000
500
0
1930
1940
1950
1960
1970
1980
1990
2000
2010
55
OPINION
field and has been very successful in
maintaining high oil production rate
and achieving high oil recovery. This
has been reflected by that Chevrons
operated fields have consistently
contributed about 40 percent of the
Indonesias oil production.
Also, this has resulted that the
ultimate oil recovery in Central
Sumatra has exceeded 50 percent
of the original oil in place (some is
up to 70 75 percent), as compared
to 40- 50 percent for Pertaminas
most operated fields. For the more
sophisticated EOR technology
includes steam flood in Duri
field. The limited application of
sophisticated EOR technology is due
to high cost and risk, lack of incentive
for conducting EOR and investors
perceiving uneconomically justifiable
returns for the projects considering
the geological, reservoir risks and
uncertainty of regulatory measures
and contract terms.
With respect to gas, Indonesia
has maintained its position as the
worlds top LNG exporter up until
2004 however the number one has
been challenged by other countries
which have significant quantities of
uncommitted gas reserves. Note that
the statistics on gas discoveries may
be somewhat skewed. Firstly, most
wells were drilled for finding oil and
only re-classified as gas wells after
encountering gas. Beginning in the
late eighties, the growing demand for
gas for electrical power generation
along with the improvement in gas
pricing for domestic use, created a
renewal interest in natural gas.
Indonesias future in natural gas
may look brighter than oil, but this
would be probably not too long if
active exploration is not maintained.
Exploration and development of new
56
gas reserves have been delayed by

uncertainties in commercial terms,
including payment guarantee and
domestic gas pricing policy that has
subsidized local industry. In 2004,
Indonesia began facing difficulties
in meeting both domestic demand
and LNGs export commitment. This
condition was a result of that many
of these gas reserves have been
exploited since the 1970s and were
in depletion stage.
Also, while gas production has
been increasing for the past decade,
domestic demand has reduced the
countrys capacity for LNG exports.
This may result that the potential
of Indonesia eventually becoming
an LNG importer is unavoidable
to fulfill domestic demand. It is
envisioned that current and future
LNG plans to become receiving and
re-gasification facilities. For instance,
as the reserves are depleted the Arun
LNG processing has been converted
to receiving LNG and re-gasification
facility. Also, although Indonesia
has significant of undeveloped gas
reserves however it would require
right domestic gas price policy to
promoting its development.
Having been a mainstay of the
economy for many decades since
the first discovery of oil in 1885,
Indonesias oil and gas sector is now
perceived as in a state of decline.
As a net importer of oil in 2004 oil
production figures have continued
to decrease from their peak at 1.7
million barrels a day in 1977. This
will also be followed by declining gas
production, unless a good investment
climate for oil and gas exploration is
maintained. Since the Asian Crisis
of 1998, investment in exploration
of new fields has dwindled and
the sector shrank by more than 10
percent in 2014 and is continuing.

The country still has significant
reserves of both oil and gas, but
substantial investment is required to
access them and fund the necessary
exploratory infrastructure. The
government is targeting 1 million bpd
by 2015 - 2016 to once again make
the country a net oil exporter; but this
will be no easy task.
According to the Indonesian
Petroleum Association, replacement
of oil reserves had dropped to
47 percent in 2013 as a result
of declining investment in oil
exploration. Subsequently, the
future for Indonesias oil industry
is an uncertain one given the lack
of exploration being undertaken
in the sector and with 3.7 billion
barrels of proven reserves with only
15 years left at current production
figures. The two largest oil fields by
production and reserves are Minas
and Duri in Central Sumatra are
all maturing with over 80 percent
of reserves realized for both. The
countrys position as a net importer
of oil has been heralded as a sunset
of the industry with focus on
other sources of energy being the
governmental priority.
With a diversity of geological
basins Indonesia will continue to offer
sizeable oil and gas reserve potential.
Of the estimated 128 oil basins, about
40 have been extensively explored.
Most oil production and exploration
is currently carried out in the basins
of Western Indonesia (the bulk of
Indonesias oil reserves being located
onshore and offshore of Central
Sumatra, Java and East Kalimantan).
As the 2014
PriceWaterhouseCoopers (PWC)
survey shows, a number of issues that
have been identified pertaining to the
investors declining interest included

the climate of uncertainties brought
about by factors such as the issuance
of the new laws that many of which
conflict with the existing contractual
framework, emerging issues related
to regional autonomy and taxation
and the governments desire to
increase tax revenues from the
upstream oil and gas industry. From
the surveys, the most compelling
issues on the industry include
contract sanctity, uncertainty over
cost recovery and the governmental
audit, intra governmental
coordination, taxation, and security
assets, people and ownership rights.
Indonesia needs to move
to deepwater exploration and
production activity, which is now
focused in the Kutei Basin (off the
coast of Kalimantan), Western Papua,
and the Bonaparte Basin (adjacent
to Australia in the Arafura Sea).
Chevron, Eni, Niko Resources, Statoil,
Total, and Hess are the firms most
active in Indonesias deepwater field

development. Currently, technical
and commercial success rates have
not spurred further development in
these areas. Accordingly, additional
incentives to encourage increased
exploration particularly in Eastern
Indonesias frontier and deep-sea
areas are urgently needed. This may
include revising the sharing formula
and observing the contract sanctity.
Other countries such as Malaysia, has
been successful with this.
Last but not least, after one year
in the office President Jokowi has
not shown significant efforts in
improving Indonesias investment
climate for oil and gas resources
development. In the program, the
Ministry of Energy and Mineral
Resources seems to delving into
the potential of renewable energy;
nonetheless the global importance
of - and dependency on oil cannot
be denied, nor neglected. As stated
in the IMF report in April 2011,
fossil fuels will remain to be the

most important sources of global
primary energy, with oil accounting
for 33 percent, natural gas for 23
percent and coal for 28 percent of
the total. Renewable sources only
constitute a fraction of the total global
primary energy supply. Given aging
reservoirs, it is much more critical
for the government to create a stable
and encouraging environment for
investment in oil and gas. More
flexibility in contractual terms,
increase in the contractors share,
reduction in the requirements for
approvals from the government,
clarity on taxation and royalty
arrangement should be considered to
promote efficient operations.
In English idioms staring down

the barrel of a gun means that theres
a high risk of something very bad
happening. Or in the figurative sense,
someone has the ability to cause you
very serious trouble.
57
OPINION
2015 LNG REVIEW
ased on data from the

International Energy
Agency (IEA) in 2015, the
natural gas has become
the main energy source, accounting
for 25 percent of the global energy
sources. Of the total gas supply,
10 percent is supplied in the form
of liquefied natural gas (LNG).
Compared to that in 1990, when LNG
market share was only at 4 percent
of the total consumed gas, since 2000
the supply of LNG has been increasing
more rapidly than the other sources
of gas, with an average growth per
year at around 7 percent.
But the oil price crisis since
the end of last year (2014) which
has continued until this year, had
impacted the business value chains in
the sector of oil and gas along the year
2015. The oil prices plunged from
the level of US$ 100-110 per barrel in
June-July 2014 to US$ 45 per barrel in
November-December 2014, and such
a condition has been continuing along
the year 2015 at relatively constant
level at US$ 60 per barrel.
The condition has drawn the
attention of all of global oil and gas
players. In Indonesia, the drop of the
oil prices had been followed with the
weakening of rupiah against the US
dollars, putting more pressures on
industries and the government.
A number of analysts have
predicted that such a condition will
continue until the next 2 years. Even
Golden Sach has predicted that the
oil prices will drop to US$ 20 per
barrel at the end of 2016 (Bloomberg,
Sept. 7, 2015). The declining prices
58
of oil was triggered by the rising

trend of oil production from member
countries of the Organization of
Petroleum Exporting Countries
(OPEC) during the first half of 2015,
especially from Saudi Arabia, Iran,
and Iraq. The price war has been also
continuing when the development
projects of shale gas and shale oil in
the US are reaching a harvest time.
Saudi Arabia has declared a price
war as it does not want to see the
booming of shale gas and shale oil
to occur in other countries, such as
China, Australia, and India.
It is expected that by keeping the
oil prices at low level, companies
developing the unconventional oil
and gas will go bankrupt because
their production cost is averagely
above US$ 45 per barrel.
In the meantime, the producers
of the shale gas and shale oil in the
US have wanted their products be
sold soon to return their massive
investments in the phase of
explorations and production of their
fields. The technology of hydraulic
fracturing needed to extract the shale
oil and gas from the rocks is costly.
Under the hard condition, the LNG
business has been also affected. The
year of 2014, which was claimed to
be the year of largest LNG trading in
history with LNG traded amounting
to a total of about 241.1 million
tons per annum (mtpa) or about 4.3
mtpa higher than that in 2013, saw a
continual pressures on prices.
There were also new LNG
producers who entered the market
in 2015. Among them include Papua
New Guinea (PNG LNG), and Angola.

But Qatar still maintained its
position as the worlds largest supplier
of LNG along the year of 2015. Japan,
Korea, Taiwan, China, and other
Pacific countries still dominated as the
worlds largest LNG buyers.
From the perspective of prices,
countries in northern part of Asia,
such as Japan and China, in 2014
were still able to buy LNG on the
spot markets at the average of about
US$ 15.0 per mmBtu. But with the
pressures of oil prices which dropped
drastically, the spot prices of LNG in
the region had also decreased. Even
the spot prices had been cheaper
compared to those in European
countries.
In the meantime, the prices of the
US gas sold under the price scheme
of Henry Hub were at US$ 3.4 per
mmbtu free on board (FOB), so that
in Europe the LNG prices on the
spot dropped from about US$ 10 per
mmbtu in early 2014 to US$ 8 per
mmbtu in the middle of 2015. The
very dynamic prices on the spot have
influenced almost 27 percent of the
total LNG supply traded in the world,
of which the Pacific region accounted
for around 75 percent.
For long term and medium term
contracts, the LNG trading was still
stable with the growth reaching
around 4 percent (10 mtpa) in 2014
and 2015.
The growth of LNG production
in new producing countries has
been continually followed by
the developments of units of regasification facilities in the LNG
Salis S. Aprilian
President Director & CEO of PT Badak NGL
consuming countries. Since 2011,

the capacity of re-gasification units
increased by almost 10 mtpa. The
increase of the re-gasification units
was seen below the growth of the
LNG plant developments. In East
Africa and Australia alone, there
are LNG plants currently under
construction and will have a total
production capacity of 130 mtpa in
the next 5 years.
Considering the current ongoing
projects, Australia will possibly
become the worlds largest exporter
of LNG with an additional capacity of
58 mtpa in 2018. In the US there will
be an additional production capacity
of 44 mtpa before the year 2020.
Several fields of shale-gas
developed in the US and Canada, and
deep-water basins in East Africa have
already contributed to a condition of
LNG supply glut in the next 10 years.
Not to mention the development of
stranded gas in Malaysia, Russia, and
in the Eastern Mediteranian countries
by using the technology of Floating
LNG. All of the LNG projects will
amount to a total LNG production of
With the developments

of conventional and
unconventional gas
reserves, in the years
to come the natural
gas will become the
prima donna of energy
sources, in which LNG
will be on top.
about 750 mtpa.

Globally speaking, the capacity
of re-gasification until the year 2015
has reached more than 740 mtpa.
The new facilities of re-gasification
are developed in Brazil, Chile, China,
Kuwait, Japan, South Korea and
Indonesia. Besides onshore, a number
of the re-gasification units are also
developed as floating storage and
regasification unit (FSRU).
There are 16 active terminals in
11 countries, including Indonesia,
Brazil, Kuwait, and Lithuania. Of the
5 new terminals, 4 terminals are
the new markets of LNG with a total
capacity of about 16.2 mtpa.
The LNG business has also grown
the shipping business. There are 375
units of LNG ship tankers with each
having an average capacity at 55,000
m3 back and forth from producers
to consumers. But oversupply and
sluggish market of LNG has affected
the shipping businesses, especially
those under short-term charter.
With such unconducive condition,
many countries have turned to the
Small-scale LNG (SSLNG), which
are LNG plants with capacity of
about 20-30 mmsfd. Currently, the
already installed SSLNG facilities
have a capacity of about 20 mtpa. The
industries which were previously
isolated from big capacity LNG
tankers, are now ready to absorb
the LNG from the SSLNG in order to
cut their fuel cost, and participate in
reducing the carbon emissions. At
least, the SSLNG will cut the initial
costs of investments. China has been
advanced in the development of the
SSLNG technology.
In Indonesia, the natural decline
of gas productionin Arun Block
(Aceh) has closed 6 trains of Arun

LNG plants and had been modified
into regasification unit which has
been in operation since early in 2015.
The LNG received from Tangguh
LNG plant is used to supply the gas
need of PT PLN in Belawan, the
Medan Industrial Estates (KIM), and
the special economic zone (KEK) in
North Sumatra.
Later, the LNG supply can be
derived from the Badak LNG plant,
Donggi-Senoro LNG, and from other
LNG plants across the globe. The
drop of gas production in Mahakam
block had also reduced the active
trains operated by PT Badak LNG,
from the previous 8 trains in 2000 to
4 trains in 2015. It is expected that
the discovery of new explorations in
Mahakam block, such as those made
by Mubadala and ENI, will extend
the operation of Badak LNG until 20
years ahead.
In its report, the IEA has also
predicted that the growth of the
worlds LNG consumption will be at
1.6 percent per year. It also predicted
that in 2040, the natural gas will
account for 24 percent of the total
energy mix in the world.
Therefore, the LNG will play a
significant role in the global LNG
market, and the development of LNG
plants in various countries, such as
Australia, the US, Russia, East Africa,
and the Middle East will create
a flexibility and security of LNG
supply in the global market. With
the developments of conventional
and unconventional gas reserves,
in the years to come the natural
gas will become the prima donna of
energy sources, in which LNG will be
on top.
59
INVESTMENT
$20b needed for gas

infrastructures
nergy and Mineral Resources Ministry said the

development of gas infrastructure in Indonesia
until 2025 will need a total investment of US$20
billion.
This was said by the ministrys Director General Oil
and Gas IGN Wiratmaja on Oct. 28, 2015 in a gathering
attended by dozens of top executives of world-class
companies on the sidelines of Gastech Convention and
Exhibition 2015 in Singapore.
Indonesia is currently a hotspot in the development
of gas infrastructure. In the roadmap of gas infrastructure
development for 2015-2025, the total amount of required
Gas infrastructure road map 2014 2030

No.
Projects
Open Access
Upstream
Dedicated
Pipeline [km]
Downstream
Dedicated
Own Use
Large Plant
Liquefaction [Unit]
Mini Plant
FSRU
Regasification [Unit]
Land based
Inland
CNG Application [Unit]
Marine
CNG
Gas Fueling Stations [Unit] LNG
LGV
Distribution Network Area [Area]
City Gas [Connnection]
184K
8
9
LPG Plant (mtpa]

LPG Storage [mt]
4,594
486K
2
3
4
5
60
Period Period
II
III
Period I
Existing
investment is estimated to reach $20 billion, comprising

$8.5 billion for pipeline development, $8 billion for
liquefaction and regassification, $400 million for gas
station, and $2.5 billion for city gas, Wiratmaja said.
He promised to establish a good communication with
investors so that they are willing to invest in Indonesia.
We already send a clear message to investors
regarding our roadmap. One of their main concerns is
related to licensing, which has been addressed by the
government by simplifying the licensing process. Of course
this will make them very happy to invest in Indonesia, he
said.
2015
2016 2017
2018
2019
2020
2021 2026
2025 2030
3,665
4,165.7 6,153 6,153
6,215
6,776
7,390
9,604
12,580
4,110
4,123 4,123 4,123
4,123
4,123
4,123
4,123
4,123
4,213.54
4,337 9,177 9,211
9,431 11,546 11,546 13,480
13,584
66
66
66
66
5
5
5
6
7
7
9
10
9
10
11
11
46
62
64
66
72
106
108
108
9
12
15
20
189
210
289
800
0
2
4
7
80
100
120
200
16
20
25
75
924 1.308
1.5
3
213K 326K 608K
million million million million
4,640 4,754 4,754 4,755 4,755 4,755
6
490K 500K 510K
66
6
12
12
68
161
30
1,300
12
400
150
5
million
7
46
2
0
2
1
14
2
55
0
27
0
66
4
0
2
3
42
2
104
0
27
4
66
4
3
2
17
68
4
136
0
27
8
66
5
5
5
24
72
6
163
0
77
12
61
JANUARY
Vico, BNI
sign trustee
agreement
Lampung starts getting gas

State-controlled gas distribution
company PT PGN Tbk started
supplying gas to three companies
in Lampung as part of a gas sales
and purchase agreements signed
in the middle of last year with 14
industries.
PGN Corporate Secretary Heri
Yusuf said in a statement that the
three companies which have received
gas from PGN since early this month
included PT Nestle Indonesia, PT Coca
62
Cola Amatil Indonesia, and PT Philips

Seafood.
He said that 11 other companies
will also start to receive gas soon
from PGNs floating storage and regasification unit in Lampung.
Heri said that the gas distribution
to the large industries in Lampung
was made following the completion
of distribution a 90 Km pipeline
linking Labuan Maringgai and Tanjung
Panjang.
State owned PT Bank Negara

Indonesia (BNI) has been appointed
as Trustee Paying Agent (TPA) for the
sale of LNG from the Sanga-Sanga
block in East Kalimantan, operated by
Vico Indonesia. The transaction value
is estimated at US$300 million.
The TPA agreement was signed
on Jan. 15, 2015 by BNIs President
Director Gatot M Suwondo, Vico
Indonesias President & CEO Gunther
Alois Newcombe and Finance Director
of PT Pertamina Arief Budiman,
upstream authority SKK Migas said in
a statement.
It was the second time BNI had
been appointed as TPA by an oil and
gas firm. BNI was first appointed as
TPA by French firm Total Indonesie for
the sale of LNG from Mahakam block,
also in East Kalimantan.
BNI will use a new scheme to
handle the LNG revenue from SangaSanga block, which is different from
the one it employed for revenue
from Mahakam. The Sanga-Sanga
LNG revenue will be handled by BNIs
branch office in Singapore acting as
TPA in cooperation with a Unit Trust in
Indonesia.
The Trustee agreement is in line
with central bank Bank Indonesias.
regulation ((PBI) No. 16/10/2014
dated May 14, 2014) which obliges
revenue from oil and gas exports to
be handled by local banks.
JANUARY
All permits to be handled by BKPM

A total of 16 ministries and
the National Police had agreed to
transfer full authority to issue a
total of 135 investment permits
to the Investment Coordinating
Board (BKPM) as the government
is determined to create a one-stop
licensing service for investors, local
media have reported.
Soon, investors will no longer
have to travel back and forth across
the city, they need only come here,
BKPMs Chief Franky Sibarani told the
press.
He did not specify all the 16
ministries but the Ministry of Energy

of Mineral Resources has issued
statement that it will cut down
the number of permits in the oil
and gas sector, and create a one
stop licensing service in a bid to
lure badly needed investments in
the sector particularly upstream
industry.
Then Acting Director General of
Oil and Gas Naryanto Wagimin said
in a statement recently that going
forward that licensing procedure in the
oil and gas sector will be simpler and
integrated.
63
FEBRUARY
IPA, Pertamina opposes L/C requirement
The Indonesian Petroleum
Association (IPA) and state-owned oil
and gas firm PT Pertamina oppose
a new government regulation that
requires the use of letter of credit
(L/C) payment system in the export
of the countrys key commodities
including oil and gas.
Didik Sasongko Widi, senior vice
president for marketing of gas at
Pertamina, said that the new L/C
requirement would undermine the
countrys LNG export to the traditional
buyers. Amid the current tight market
condition, it (the L/C requirement)

will make Indonesias LNG to be less
competitive, he said.
The Ministry of Trade has recently
introduced a new regulation requiring
the use of L/C payment system in the
export of several commodities starting
April of this year.
IPAs President Craig Stewart said
the association is in communication
with the Ministry of Trade, Ministry of
Energy and Mineral Resources and
upstream authority SKK Migas about
the new regulation.
Craig Stewart
Around Rp 2,400 trillion investment

in energy sector
The government targets
investments of Rp 2,392.5 trillion
(US$188 billion) in five years until
2019 in line with its plan to develop an
additional 35,000 MW power plants
and boost the utilization of natural gas
domestically.
Of the Rp 2,400 trillion funds,
95.4 percent or Rp 2,282.5 trillion
64
will be invested in the oil, gas and

power sectors, while the remaining
4.6 percent of Rp 110 percent
in the mining (coal and minerals)
sector, Widhyawan Prawiraatmadja,
Head of newly-established
Performance Management Unit at
the Ministry of Energy and Mineral
Resources (MEMR), said in the
IndoGAS 2015 conference held in

Jakarta.
Of the Rp 2,282.5 trillion
investment for oil, gas and power
projects, Rp 1,325.5 trillion is
expected to be invested in the oil
and gas sector, with the remaining
Rp 957 trillion in the power
sector.
FEBRUARY
First cargo from Tangguh arrives at Arun Regas
The first liquefied natural gas
(LNG) cargo purchased by PT. PLN
(Persero) arrived at the Blang Lancang
port in Aceh Darussalam on February
19, 2015. The cargo was shipped
from the Tangguh LNG facility in
Teluk Bintuni Regency, West Papua
province on the Tangguh Towuti
LNG vessel to commission the Arun
regasification facility.
This is a real effort from
the upstream oil and gas sector
to prioritize domestic energy
needs. SKK Migas is committed to
increase gas supply allocation for
the domestic market. Since 2003,
domestic gas supply has increased

on average by 9% per year. In 2013
gas volume for domestic was bigger
than the volume for exports. In
2015 we are committed to provide
4,403 BBTUD (Billion British Thermal
Unit per Day) for domestic (market),
or equals to 61%, while for exports
the volume is 2,836 BBTUD, SKK
Migas Chairman Amien Sunaryadi
said.
The LNG shipment is part of
Tangguhs commitment to the
domestic market. The BP-operated
Tangguh LNG plant is expected to
deliver 9 LNG cargoes to PLN in
2015. This cargo from Tangguh

LNG will help commission Arun and
begin its new operational life as
a regasification terminal. Amien
added.
This is an important milestone
for Tangguh in its commitment to
supply domestic gas to help meet
the increasing demand in Indonesia.
The Tangguh partnership is proud
to support the commissioning of
the Arun regasification facility and
looks forward to safely delivering
future cargoes to the terminal, said
Christina Verchere, BP Asia Pacific
Regional President.
Five gas agreements signed

Five gas sales and purchase
agreements (GSPAs) with a state
revenue potential of Rp 7.7 trillion
(US$617 million) have been signed
during the opening of International
Indonesia Gas Conference and Exhibition
(Indogas) in Jakarta on January 27.
Its a major step for the upstream
oil and gas sector in prioritizing
domestic demands, upstream
authority SKK Migas head Amien
Sunaryadi said as quoted by Antara
news agency in Jakarta.
Acting Director General of Oil
and Gas I Gusti Nyoman Wiratmaja
and state oil and gas company PT

Pertaminas (Persero) Director Dwi
Sutjipto were present in the signing
ceremony.
Amien said all parties could
hopefully give their support so that
the distribution of gas from the signed
five agreements could run well.
With such a situation, state revenue
potentials expected this year could be
fully realized, concerning that the gas
absorption by buyers was lower than
commitments in 2014.
There is a production loss
potential of 95 million standard cubic
feet per day (mmscfd) or equal to

17,000 barrels of oil per day, he
said.
Since 2013, the domestic gas
supply has increased by 9 percent per
year. In 2013, the volume of gas to
meet domestic demands was higher
than for exports.
In 2015, the commitment for
domestic demands has reached
4,403 billion British thermal units
(bbtud) or 61 percent of the total
production while for exports, it
reaches only 2,836 bbtud, said
Amien.
65
MARCH
ITOCHU enters gas pipeline business
Japanese firm ITOCHU Corporation
has taken a step into Indonesias gas
pipeline business by acquiring an
interest in a private firm which has
been engaged in the business.
The firm announced it has reached
an agreement with IDX-listed Rukun
Raharja Tbk (RAJA) on the acquisition
of 33 percent of the stocks of the
latters subsidiary PT Triguna Internusa
Pratama (TIP) for US$12.5 million.
TIP, which was 99.98% owned by
RAJA prior to the acquisition, provides
gas distribution and transportation
services utilizing its onshore gas
pipeline and compressors, according
to the firm.
TIP owns and utilizes gas-related
infrastructures such as onshore
66
pipelines and compressors in the

western area of Java and the southern
area of Sumatra to provide stable gas
transportation to gas traders who sell
gas to power plants and industrial
complexes. The company is currently
constructing new pipeline in the
eastern area of Java, accumulating
high quality infrastructure assets and
expanding the scope of business
operations successfully. It will
continue to proactively engage in
gas infrastructure development in
Indonesia.
With steady economic growth and
the increasing population, domestic
demand for natural gas is rising in
Indonesia.
However, since there are
not sufficient infrastructures, the

Indonesian government is planning
to develop new gas pipelines
with a combined total length of
around 45,000 kilometers to add
to the existing gas pipelines (a
combined total length of around
11,000 kilometers). By developing
businesses jointly with RAJA, which
boasts the largest share of the gas
infrastructure market among private
companies apart from the state
owned enterprises, ITOCHU intends to
capture expected new opportunities
in the Indonesian gas infrastructure
market to generate long-term stable
profits, and aims to expand its
business in the energy infrastructure
field, the firm said.
MARCH
Jokowi inaugurates Arun Regas
inaugurated on March 9 the
commercial operation of the Arun
LNG Storage and Regassification
Terminal in Aceh, an important gas
infrastructure that enables Aceh and
neighboring province North Sumatra,
to receive gas from other parts of the
country and outside the country.
The facility also known as the
Arun Regas terminal, located on Jl.
Medan-Banda Aceh, Blang Lancang,
Lhokseumawe, Aceh is owned by PT
Perta Arun Gas, a subsidiary of state
owned oil and gas firm PT Pertaminas
subsidiary of PT Pertamina Gas
(Pertagas).
The operation of the terminal will
make Pertamina much more efficient,
Jokowi was quoted by Antara as
saying.
Present at the inauguration
ceremony were Minister of Energy
and Mineral Resources Sudirman
Said, Acehs Governor Zaini Abdullah,
Pertaminas President Director
Dwi Sutjipto and Perta Arun Gass
President Director Teuku Khaidir.

In its first commercial operation,
the Arun Regas terminal is sending
gas to PLTU Belawan combined cycle
power plant in Belawan, the port city
of North Sumatra, owned by state
owned electricity firm PT Perusahaan
Listrik Negara (PLN). Later, it will also
send gas to industrial zones in North
Sumatra and Aceh.
The gas is transmitted to North
Sumatra via a recently-completed 344km pipeline owned by Pertagas. The
Arun-Belawan pipeline was inaugurated
on Dec. 12, 2014 by Minister of
Sudirman Said.
PLN said thanks to the operation
of the Arun Regas terminal and the
Arun-Belawan pipeline, it can now use
natural gas instead of high speed
diesel oil at PLTGU Belawan and as
such can cut its fuel costs by Rp 5
trillion each year.
PLTGU Belawan has been using
HSD for many years due to the
absence of gas supply and this made
it one of the most costly power plants

owned by PLN in the country.
PLN said PLTGU Belawan needs
96 bbtud of gas for its GT 1.1, GT
2.1 and GT 2.2 gas turbines and
another 2.2 bbtud for a leased gas
engine power plant (PLTMG) in the
port city. The firm thus needs a total
of 98 bbtud of gas for its power plant
operation there.
It noted however that the power
plant will still use marine fuel oil
(MFO) for two power units each with
a capacity of 65 MW, but the gas
supply from Arun Regas has enabled
the power plant to cut its oil fuel
consumption by 80 percent.
PLN signed a contract with BP
Tangguh, the operator of Tangguh
LNG plant, on Oct. 17, 2014 to supply
PLN with LNG through 2033 with
destinations including the Arun Regas
terminal. PLN pays fees to Perta Arun
Gas for the regassification of the gas
and for Pertagas for the transportation
of the gas from Arun Regas to
Belawan.
67
MARCH
Masela gas reserve doubles
Proven reserve (P1) of Abadi field in
Masela PSC offshore Maluku has been
revised upwards to 12 trillion cubic feet
(tc), double the previous estimate of
6.05 tcf, according to a source.
The sharp increase in the P1
reserve has been certified by
DeGolyer & MacNaughton and
LEMIGAS, the source told Petromindo.
Abadi field is one of the most
significant gas discovery made in
the country in the past decade. The
block is operated by INPEX Masela,
a subsidiary of Japanese firm INPEX
Corp., with a 65 percent participating
interest in partnership with Shell
Upstream Overseas Services (I)
Limited, a subsidiary of Royal Dutch
Shell plc, which holds a 35 percent
68
participating interest.
INPEX and Shell plan to build
a floating one-train LNG plant to
process Abadis gas, with a capacity
of 2.4. mtpa, but it is reportedly
proposing to increase the number of
trains to three, thus raising the plants
capacity to 7.2 mtpa. If realized, it will
become the worlds largest floating
LNG plant.
Both firms plan to develop a
floating LNG plant to process gas
from Abadi field of Masela. Muliawan
said that the floating LNG plant to be
built by Inpex would be the largest in
the world.
Deputy for Control and Operation
at the upstream oil and gas authority
SKK Migas, Muliawan recently said
INPEX has proposed to postpone the

commercial operation of the plant
to 2024 from the initial schedule of
2019/2020.
The two firms, however, have
said that the project would not be
feasible unless the government
extend the existing contract expiring
in 2028. INPEX has made a request
for contract extension, but existing
regulation rules that such request can
only be made no earlier than 10 years
before expiry
The authority has previously said
that it may entertain the contract
extension request if INPEX has signed
gas sales agreements. To date no gas
sales agreement has been signed by
INPEX.
MARCH
Shell, Petronas, Statoil, Pertamina
win block tenders
The Ministry of Energy and
Mineral Resources has announced the
winners of the 2014 block tenders,
which include major companies such
as Royal Dutch Shell Plc, Petronas,
Statoil and state owned PT Pertamina
(Persero).
The tenders comprised of three
categories: First, the Phase 1 Direct
Offer Tender of Conventional Oil and
Gas Block, held from June 2 through
July 16, 2014; second, the Phase 2
Regular Tender of Conventional Oil and
Gas Block, held from June 2 through
Oct. 6, 2014; and third, the Direct
Offer Tender of Non-Conventional Oil

and Gas Block held from June 23
through Aug. 7, 2014.
In the Phase 1 Direct Tender
of Conventional Oil and Gas Block,
a total of 13 bid documents were
bought for eight working areas.
But, there are only six winners,
including the consortium of PT Petcon
Resources and Petronas Carigali
International E&P BV for Kualakurun
block onshore Central Kalimantan;
Shell Exploration Company B.V
for Offshore Pulau block, offshore
Maluku; and Pertamina for Abar and
Anggursi blocks, both offshore West

Java.
In the Phase I Regular Tender
of Conventional Oil and Gas Block,
five working areas were offered,
but only three of them attracted
bidders. There are only two winners
in the tender, namely Petronas
Carigali International E&P BV for
North Madura II block, offshore
East Java and Statoil ASA for Aru
Trough 1 block offshore Aru Island.
Two blocks offered in the tender,
Yamdena and South Aru II, failed to
attract bidders.
69
APRIL
ConocoPhillips commitment to RI still solid
American firm ConocoPhillips has
announced spending cuts globally in
response to the oil price drop, but the
firms Chairman & CEO Ryan Lance
has noted the firms commitment to
Indonesia is still strong and it would
not lower its investment in the country.
Lance said the firm will invest
around $2.5 billion in Indonesia in the
next two to three years. We have
spent $2.5 billion in the past four
years and we are still committed to
spending a similar amount in two to
70
three years, Lance told the press

following a courtesy call on President
Joko Widodo at the state palace.
Lance was accompanied by Minister
of Energy and Mineral Resources
Sudirman Said, ConocoPhillips
Indonesia (COPI) President & GM Erec
S. Isaacson, COPIs VP Commercial &
Business Development Taufik Ahmad,
and COPIs VP Development & Relations
Joang Laksanto.
Sudirman said COPI has been
operating in Indonesia over the past
forty years and is still committed to

continuing participation in developing
Indonesias energy sector.
Aside from gas, COPI contributes
oil to Indonesia, accounting for 5-10
percent of Indonesian oil production
and 24 percent of the national LPG
production, Sudirman said.
COPI is an important partner.
What is important is that COPI is still
committed to investing in Indonesia
despite the current oil prices,
Sudirman added.
APRIL
Govt decides to relocate Cilamaya seaport project
Vice President Jusuf Kalla said
recently the government has decided
to relocate the Cilamaya seaport
to prevent potential troubles it may
cause on oil and gas activities.
The seaport project was initially
planned in a Cilamaya coastal area in
Karawang regency, West Java. Kalla
said the project should now be moved
to another location eastward, either in
Subang or Indramayu regencies.
Indeed, we need a seaport in
West Java. But we also need gas.
Thus we have to find a compromise
solution, Kalla said during a visit to

Karawang.
Cilamaya was chosen as the
location of the seaport project by the
previous government after evaluating
several other alternatives. It is close
to industrial parks in Karawang.
However, the selection of the location
drew protests from state owned oil
and gas firm PT Pertamina as it is
close to the ONWJ block operated
by PT Pertamina Hulu Energi (PHE).
It is feared that some vessels may
hit rigs at the block. ONWJ is the
main supplier of gas to Jakarta and

surrounding areas.
Kalla said the government has not
yet decided where the project will be
relocated to.
We are looking for a safer
location, Kalla said.
According to Kalla, there wont be
any losses if the project is moved to
a new location as spending for the
project has thus far been made only
for preliminary study. There isnt
even any engineering study yet, Kalla
said.
Three killed in Pertaminas tanker explosion

A fuel tanker belonging to state
owned oil and gas firm PT Pertamina
(Persero) exploded on April 3
afternoon in Belawan seaport, North
Sumatra, killing three people.
The three people were all workers
of PT Waruna Nusa Sentana (WNS)
which was repairing the tanker. They
were rushed to the Pirngadi hospital

in Medan soon after the incident,
but doctors failed to save their lives,
according the local media.
The MT Palu Sipat tanker with a
capacity of 17,500 LTDW was made
by state owned shipbuilder PT PAL
in Surabaya. It exploded while it was
in a docking process at the Belawan

seaport, Pertaminas spokesperson in
North Sumatra Zainal Abidin said.
The police is still investigating the
causes of the incident. As of April 7,
the police was still reluctant to get
into the tanker on fear of possible new
explosions.
71
MAY
Reshuffle at ministry and SKK Migas
Resources Sudirman Said has
announced new leadership lineups for
the ministry and upstream authority
SKK Migas in a reshuffle aimed to
refresh the management of both
organizations.
The minister installed a total of 38
officials to fill in the director general
and director-level positions at the
ministry and five officials at SKK Migas
in a ceremony held on May 7.
Sudirman applied a new
method in selecting officials for
the director general positions,
which was considered by many
as a breakthrough. While in the

past, a minister usually chose
directors general through a
process unknown to the public,
Sudirman formed a selection team
comprising experts, academics
and industry players to screen
potential candidates and all people
from inside and outside of the
ministry were allowed to apply
for the positions. The screening
process resulted in five names for
each director general position.
The names were then submitted
to President Joko Widodo for final
decision.
Halliburton opens new Indonesian HQ

US-based oil field services
company Halliburton opened its
new Indonesian headquarters (HQ)
in Jakarta to provide services to
support customers activities in the
country.
The company said in a statement
the new facility will increase the
efficiencies and capabilities of the
companys resources specifically

focused on the mature fields, deep
water and unconventional markets in
Indonesia.
The additional synergies from the
facility include enhanced integrated
services, equipment maintenance, job
preparation and execution and a highlevel of service quality for Halliburtons
customers in Indonesia, it added.

Halliburton has been operating
in Indonesia for 40 years, and,
even in the current global market
condition, we remain committed to the
Indonesian market to help the country
meet its energy needs, said Jeff
Miller, president of Halliburton, at the
event.
Ministry cuts number of oil

and gas permits
Mineral Resources has cut the
number of permits that oil and
gas contractors need to obtain
as part of the efforts to create a
simpler, faster, transparent licensing
process, the ministry said in a
statement.
The number of permits has been
cut to 42 types from 51, effective
early May of this year, the ministry
72
said, adding that in the past, the

number of permits that contractors
were obliged to obtain reached 104
types. The number was cut to 51 in
2012.
The ministry said all the permits
can be obtained at the Investment
Coordinating Board (BKPM), which has
been assigned by the government to
become the one-stop licensing service
provider.
MAY
Jokowi issues regulation on CPO
funds for biodiesel
signed on May 5 a governmental
regulation imposing a levy on the
exports of palm oil to help develop the
local palm industry and pay biodiesel
subsidies.
Effective since end of May, palm
oil exporters must pay a levy of
US$50 per metric ton for crude palm
oil (CPO) and $30 for processed palm
oil products. The levy is imposed only
if the CPO price exceeds $750 per

ton.
Coordinating Economic Minister
Sofyan Djalil said that the government
was preparing a ministerial regulation
as a legal basis for the establishment
of a special public service agency
(BLU) within the ministry that would
collect and manage the levy.
He said the agency would have a
structure comprising three boards of
management a steering committee

consisting of six ministers and a board
of commissioners as well as a board
of directors filled with professionals.
According to Sofyan, the agency
is expected to collect at least $700
million each year, of which 40
percent is to be allocated to biodiesel
subsidies, while the remaining
60 percent is for improving state
plantations.
Ophir completes deepwater PSCs acquisition

LSE-listed Ophir Energy plc
announced that it has completed
the acquisition of four deepwater
Production Sharing Contracts
(PSCs) in Indonesia from Niko
Resources.
The PSCs that have been
acquired are West Papua IV, Aru,
Kofiau and Halmahera-Kofiau, all

of which will be operated by Ophir.
The PSCs are located in two core
areas in Eastern Indonesia West
Papua and the Western Birds
Head, both of which are highly
prospective basins with exposure
to a mix of proven and frontier oil
and gas plays.

Ophir is also in the process of
completing the acquisition from
Niko of two additional PSCs North
Makassar Strait and North Ganal.
Ophir has separately decided that it
will no longer be proceeding with the
acquisition of the Obi PSC.
73
JUNE
Aceh has a special oil and gas regulation

President Joko Widodo has signed
a special regulation governing the
development of oil and gas in the
autonomous territory of Aceh.
The Governmental Regulation No.
23/2015 on the Joint Development
of Oil and Gas Resources in Aceh
was signed on May 5, 2015. The
regulation was an implementing
regulation of Law No. 11/2006 on
Aceh autonomy, the Cabinet Secretary
office said in a statement on its
website.
The regulation rules that oil and

gas resources in Acehs lands and
sea belong to the state and are to
be jointly developed by the central
government together with the Aceh
administration.
The authority to develop the
resources located in between 12
and 200 miles offshore lies with the
central government with the Aceh
provincial government participating in
overseeing and monitoring production
reports. Contractors operating in
those areas are thus obliged to

regularly submit reports to the Aceh
governor.
The regulation also states a
special agency called the Aceh Oil
and Gas Development Agency (BPMA)
will be established to implement,
control and oversee the cooperation
contracts on both working areas in
the onshore and offshore areas of
the province. The BPMA has functions
similar to the ones now performed by
SKK Migas at present.
Govt signs 12 oil, gas contracts

The government signed 12 oil
and gas production sharing contracts
comprising of eight conventional oil
and gas working areas and four nonconventional working areas.
Resources said in a statement that the
government also signed the contract
extension of the Pase working area in
Aceh.
The ministry said that the
eight conventional working areas
74
comprise of six working areas

resulting from the phase 1 of 2014
direct offer including Kualakurun,
Garung, Offshore Pulau Moa Selatan,
Southeast Papua, Abar, and Anggursi;
and from phase 1 2014 regular
tender including North Madura II and
Aru Trough I working areas.
The ministry said that total
investment commitment for the eight
oil and gas working areas in the first
three years of exploration period
is US$107.23 million. The ministry

added that signature bonus to be
received by the government is $9
million.
Meanwhile, the four oil and gas
non-conventional (MNK) working areas
comprise of 1 working area resulting
from the 2013 direct offer (MNK
Kisaran), and three working areas
from director offer in 2014 (MNK
Sakakemang, MNK Selat Panjang, and
MNK Palmerah).
JUNE
Govt decides on Mahakam Block
The government has finally made
its decision on the structure of
share ownership in Mahakam Block,
Kutai Kartanegara regency of East
Kalimantan (Kaltim) province, after the
end of its contract on December 31,
2017. PT Pertamina is secured to get
70 percent, while the other 30 percent
is given to the current operator Total

E&P Indonesie of France and its
partner Inpex Corporation of Japan.
President Joko Widodo has
agreed to give 70 percent share
to PT Pertamina and the other 30
percent to current contractors Total
and partner Inpex, said Energy and
Mineral Resources Minister Sudirman

Said during a press conference to
announce the governments decision
on the Mahakam shareownership on
Friday, June 22 in Jakarta.
He was accompanied by Stateowned Entreprises (BUMN) Minister
Rini Soemarno.
Two PSC holders get Gold rating

announced recently it has awarded
two exploration PSC holders PHE
Nunukan Company and PT Saka
Indonesia Sesulu Gold rating
in appreciation of their excellent
performance in meeting their
exploration commitment.
Besides, the agency also awarded
the Green rating, the second-highest in
the SKK Migas rating system, to four
companies and the Blue rating, the
third-highest, to six companies.
Exploration contractors who
perform well deserve appreciation,
SKK Migas Vice Chairman M.I.
Zikrullah said after bestowing the
awards to the 10 PSC holders.

The companies were selected
from among 96 PSC holders who have
been holding their contracts for three
years.
SKK Migas places exploration
PSC holders into six categories in
its rating system in view of their
performance: Gold, Green, Blue,
Pink, Red and Black. Gold means
the contractors have met their
firm commitment in full and made
economic hydrocarbon discovery;
Green means the contractors have
met their firm commitment in full
and made technical hydrocarbon
discovery; Blue means the
contractors have met their firm

commitment in full; Pink means the
contractors have met most of their
firm commitment; Red means the
contractors have only met a bit of
its firm commitment; Black means
the contractors have carried out
geological and geophysical studies
and nothing else.
Zikrullah admitted there are a lot
of obstacles faced by contractors
in meeting their firm commitment.
The obstacles range from problems
inside of the PSC holders, unfavorable
regulations, lack of operational
equipment, subsurface problems, and
fiscal-related problems.
75
JULY
8 infrastructure projects inaugurated

Eight downstream infrastructure
projects worth Rp 687.3 billion owned
by state owned oil and gas firm PT
Pertamina were inaugurated on July
14.
The inauguration ceremony
was held at Pertaminas LPG depot
in Tanjung Priok, North Jakarta,
presided over by Director General of
Oil and Gas IGN Wiratmaja Puja, and

attended by Pertaminas President Dwi
Soetjipto.
The six projects are the relocation
and capacity upgrading of LPG depot in
Tanjung Priok, the aviation fuel pipeline
in Surabaya, East Java; an LNG filling
station in Bontang, East Kalimantan;
three Liquefied Gas for Vehicle (LGV)
stations and a Compressed Natural

Gas (CNG) station.
The Tanjung Priok LPG depot
project worth Rp 440 billion involved
the relocation of ten LPG storage
tanks along with its filling sheds
and supporting facilities and the
development of a new LPG tank with a
capacity of 4x2,500 MT.
Murphy pulls out of Indonesia

US firm Murphy Oil Corp. has
decided to pull out of Indonesia after
years of unfruitful investment in the
country.
The firm has paid a farewell
visit to SKK Migass Chairman
Amien Sunaryadi, SKK Migas chief
spokesperson Elan Biantoro said.
76
The firm used to have interests in

four blocks including Semai II PSC,
Semai IV PSC, Wokam II PSC, all in
West Papua; and South Barito PSC in
South Kalimantan. The firm has 28.33
percent of Semai II in partnership with
PTTEP (28.33 percent), INPEX (28.33)
and PT Petamina Hulu Energi (15
percent); and 100 percent in Semai IV,

Wokam II and South Barito.
State owned gas distributor
PT Perusahaan Gas Negara (PGN),
through its subsidiary PT Saka Energi
Indonesia, is seeking to take over the
Wokam II and Semai IV blocks through
farm-in process.
JULY
Pertamina signs gas supplies from
Jangkrik, Mahakam, DSLNG
State owned oil and gas firms PT
Pertamina signed three agreements
to purchase gas in the form of LNG
from Muara Bakau PSC, Mahakam
PSC, both in East Kalimantan; and PT
Donggi Senoro LNG plant in Central
Sulawesi.
The first Gas Sales Purchasing
Agreement (GSPA) was signed with

Eni Muara Bakau, an affiliate of Italian
firm Eni Spa, the operator of Muara
Bakau PSC for the supply of 1.4 mtpa
of LNG over a period of seven years
starting in 2017, the time the project
is scheduled to come onstream.
The volume is larger than the
Domestic Market Obligation (DMO)

volume set in Muara Bakau PSC.
The gas is expected to be used to
support Pertaminas refinery projects,
industrial demand in North Sumatra
and West Java, as well power
generation needs in West Java,
Pertamina said in a statement.
Pertamina, Pupuk sign MoU on

petrochemicals
State owned oil and gas firm PT Pertamina and state
owned fertilizer firm PT Pupuk Indonesia have signed a
Memorandum of Understanding (MoU) to jointly study
on the possibilities to cooperate in gas and coal-based
petrochemical business.
The MoU was signed by Pertaminas President Director
Dwi Soetjipto and Pupuk Indonesias President Director Arifin
Tasrif in the presence of Minister of State Enterprises Rini
M. Soemarno, Pupuk Indonesia said in a statement.
The MoU also covers cooperation in synergy and

knowledge sharing on Engineering, Procurement and
Construction (EPC) and Operation and Maintenance (O&M),
the statement said.
Both firms will form a joint team, comprising officials of
both companies, with the following tasks: Study technical,
study potential synergy in EPC and O&M, share knowledge
through consultation by both firms or their affiliates, make
reports and issue recommendations for both companies.
77
AUGUST
Medco suspends operation in US and Yemen
IDX-listed PT Medco Energi
Internasional Tbk has suspended the
operations of concessions in the United
States and Yemen due to the sharp
drop in oil prices and security issue.
The firm suspended activities at
the East Cameron gas concession
in the Gulf of Mexico, the U.S. due
to its deteriorating economics as
a result of the sharp decline in oil
prices, and. However, the firm still
maintains operation at its Main Pass oil
concession, located in the same area.
We are focused on assets which

are still good economically and
have good exploration potentials,
President Director Lukman Mahfoedz
told Petromindo.
The East Cameron concession
covers more than 60 sq km area
offshore Lousiana State. The acreage
has three blocks, namely 316, 317
and 318 blocks. Medco through
Medco Energi US LLC, the operator,
has 75 percent interest (in partnership
with Northstar Offshore Group LLC) in
317 and 318 blocks and 100 percent

interest in 316 block. The company
holds Lease Agreements over 317
and 318 blocks, through the 100%
acquisition of Novus Petroleum Ltd.
in 2004. The blocks produce natural
gas that is fed into the nearest gas
pipeline.
Medco also has 75 percent
interest in the 64 and 65 blocks of
Main Pass acreage, covering 28.4
sq km, in partnership with Northstar
which holds the remaining shares.
Donggi Senoro LNG onstream

After years of construction, the
Donggi Senoro LNG plant in Central
Sulawesi has finally come into
production with the first cargo of
LNG shipped on Aug. 3, 2015 in a
ceremony presided over by President
Joko Widodo (Jokowi).
The first cargo was delivered to
Arun Receiving and Regasification
78
Terminal in Nanggroe Aceh Darusalam,

better known as Arun Regas, to meet
the gas needs of industries and power
plant in the northern part of Sumatra.
The inauguration ceremony was
held at Donggi Senoro LNG plant at
Uso Village, Batui District, Banggai
Regency, Central Sulawesi.
During the event, the president
also inaugurated the Senoro Gas Field

Production Facility owned by Joint
Operating Body Pertamina Medco
E&P Tomori Sulawesi (JOB PMTS)
and the GG Field Project of Pertamina
Hulu Energi Offshore Northwest Java
(PHE ONWJ); and broke ground on an
ammonia plant project owned by PT
Panca Amara Utama (PAU).
AUGUST
Riot in Banyu Urip
Oil and gas contractors have often
faced security problems in Indonesia,
but all the problems were caused by
outsiders angry activists or villagers
living nearby. The riot that took place
at the Banyu Urip project on Saturday,
Aug. 1, 2015, seems unprecedented:
It was caused by the workers of the
project.
Thousands of angry workers
at a construction site at the Banyu
Urip oil field in Bojonegoro, East
Java, destroyed facilities at the site
after they found that were unable to
immediately leave the site at lunch
time.
The incident disrupted
production activities at the field,
located within the oil-rich Cepu
block. The field saw production
dropping by 55,000 barrels per
day (bpd), but was able to resume
production at full rate of 80,000
bpd on the following day.
Bojonegoro Police Chief Adj. Sr.
Comr. Hendri Fiuser said the incident,
which took place at the engineering,
procurement and construction (EPC
1) area of the Banyu Urip project site
in Gayam district, started at noon and
lasted 30 minutes.
Prior to the incident, the workers,
were about to leave the site for lunch.
However, unlike regular days, only two
exit gates were open instead of five,
Hendri said.
Thousands of workers who
had waited so long to leave the site
eventually got angry and attacked
onsite vehicles and offices at the
Cepu block project site, Hendri
said.
He said the number of exit gates
had been reduced as a result of
changes in management policy.
West Java gets 10% of ONWJ

The government has finally decided
to allocate 10 percent interest in
the ONWJ block in West Java to a
company owned by the provincial
administration.
Director for Upstream Oil and
Gas Management Djoko Siswanto
said that the decision was taken
during a meeting between the

central government, the provincial
government, and the shareholders of
the block. It has been confirmed to
(give) 10 percent (to West Java), he
said, adding that a formal letter on
the decision has yet to be sent to the
provincial administration.
79
SEPTEMBER
Govt gives C. Java 10% interest in Muriah block
The government has finally approved a request from
the Central Java provincial administration for a 10 percent
participating interest (PI) in the Muriah block.
Minister of Energy and Mineral Resources Sudirman
Said officially handed over the 10 percent PI in the
block to the provincial administration, along with a
10 percent PI in the ONWJ block to the West Java
administration.
The ministry said in a statement obtained recently
that a ministerial decree on city gas network was given to
state-controlled gas distribution firm PT PGN Tbk at the

same ceremony.
The ministry first announced its decision to allocate 10
percent PI in ONWJ block to West Java earlier in August.
Muriah is 100 percent owned by Petronas Carigali. The
offshore Kepodang gas field in the block is projected to
start operation in the fourth quarter this year with an initial
volume of 60 mmscfd and peak volume of 120 mmscfd.
The gas will be channeled to state-owned power firm PT
PLN via pipeline through Central Java mainland.
Golden Agri to build $150m biodiesel facility

SGX-listed Golden Agri Resources
(GAR), the worlds second largest
plantation company, was disbursing
up to US$150 million in capital to
establish two biodiesel facilities, to
benefit from Indonesias anticipated
energy mixture policy that is expected
to boost sustainable fuel consumption.
The companys head of investor
relations, Richard Fung, told reporters
in a teleconference that GAR was
aiming at seeking benefits from the
governments policy to blend more
80
bioftuel in diesel by being directly

involved in the efforts of boosting
sustainable energy.
We are currently in the process
of building two biodiesel plants of
300,000 tons per annum each in
capacity, of which we expect can be
completed by next year, he said.
The construction for one of the
plants started earlier so it is expected
to be fully completed in the first half
[of next year] while the second one
has just started recently so it will be
done toward the second half.

For the two plants, Fung said that
a total of $150 million in investments
would be disbursed, and the
expansion was carried out by one of
GARs subsidiaries. The new plants,
he explained, are located in Marunda
in North Jakarta and Tarjun in South
Kalimantan.
He said the biodiesel production
was expected to be fully absorbed
by the governments biodiesel
program.
SEPTEMBER
Saka: Production at Fasken shale gas

block jumps five-fold
PT Saka Energi Indonesia, a subsidiary of IDX-listed gas
distribution company PT Perusahaan Gas Negara (PGN) Tbk,
said that output at the Fasken shale gas field in Texas, the US,
has jumped to 154 mmscfd from 30 mmscfd in July 2014
when the company has just acquired interest in the block.
Saka said in a statement issued by PGN recently that
output until end of this year is expected to further increase
to 190 mmscfd.
Were grateful that the performance of the Fasken
block has been in line with projection. The shale gas
production which has increased by five-fold since the block
started production proves that this strategic decision (to
invest in Fasken) is positive for the company, said Saka
Energi Director of Operation Tumbur Parlindungan in the

statement.
Saka last year set up a joint venture with US-based Swift
Energy, in which the former holds 36 percent sake and the
latter 64%, to develop the Fasken shale gas block, which
is estimated to have shale gas reserves of about 1 trillion
cubic feet.
Elsewhere, Saka said that gas pipeline infrastructure
supporting the Fasken field has a capacity of up to 250
MMSCD, while output dedicated for export can be made via
LNG plant in Texas. Tumbur hopes that Sakas investment
in Fasken would help strengthen Indonesias gas supply
security.
81
OCTOBER
Saka discovers huge oil in Pangkah
PT Saka Energi Indonesia,
the upstream subsidiary of
state-owned PT Perusahaan Gas
Negara Tbk (PGN), recently made
a significant discovery during
exploration in Pangkah PSC
offshore East Java with preliminary
assessment indicating the reserve
amounts to 300 million barrels of

oil.
The new reserve was discovered
during the drilling of the Sidayu-3
exploration well on Aug. 17, 2015
using COSL rig, Chief Operating
Officer Tumbur Parlindungan said in
Jakarta.
He said, the first Drill Stem

Test (DST-1) within the Ngimbang
carbonate reservoir over the intervals
7225-7235 and 7265-7310
produced in 1,800 bopd at 28/64
choke with WHP 901 psi, GOR 766
scf/stb, BSW 0% and API gravity of
37.5o.
ExxonMobil sells Aceh assets to Pertamina

ExxonMobil Indonesia, a unit of American firm
ExxonMobil, has sold all its assets in Aceh to state owned
oil and gas firm PT Pertamina, according to a senior official
of ExxonMobil.
ExxonMobil has assigned its interest in the North
Sumatra Offshore and Block B production sharing contracts
to Pertamina and has sold its shares in PT Arun, an entity
that operates the Arun LNG plant facilities, Vice President
Public & Government Affairs of ExxonMobil Indonesia Erwin
Maryoto told Petromindo.
82
He said that Pertamina will operate the facilities and

require a significant proportion of the workforce. We are
working closely with Pertamina to minimize impacts and
ensure a smooth transition, Erwin said, adding that his firm
remains committed to Indonesia.
He did not provide commercial details, saying the
terms are confidential. ExxonMobil continually reviews its
assets for their contribution toward meeting the companys
operating needs and financial objectives, as well as their
potential value to others, he explained.
OCTOBER
Six gas deals for local market signed
Upstream authority SKK Migas Chairman Amien
Sunaryadi said that 6 agreements on the sale and purchase
of gas (PJBG) for domestic buyers were signed in Nusa
Dua, Bali, on Tuesday (Oct.20).
The six deals have the potential to increase state
income by US$ 587 million or around Rp 7.86 trillion,
Amien Sunaryadi said after witnessing the signing
ceremony, which was held in conjunction with the opening
of the Asia Pacific Oil and Gas Conference and Exhibition
(APOGCE) in Nusa Dua, Bali.

The six signed contracts consist of three contracts for
power plants, two contracts for industries, and one for
LPG. The first of the 3 contracts for power was signed by
PetroChina International Jabung Ltd and PT. Perusahaan
Listrik Negara (PLN) Batam.
The second contract was signed by Energy Equity Epic
(Sengkang) Pty Ltd and South Sulawesi regional owned
company (BUMD).
Pertagas, PKG sign agreement

PT Pertamina Gas (Pertagas)
signed an agreement with state
owned fertilizer firm PT Petrokimia
Gresik (PKG) on transportation of
gas from Madura Strait PSC to the
latters petrochemical plant in East
Java.
The gas will be delivered via
East Java Gas Pipeline (EJGP), an
open access gas pipeline owned

by Pertagas, at the volume of
85 mmscfd from 2017 through
2026.
The gas will be sourced
from MDA and MBH fields of the
Madura Strait block owned by
Husky CNOOC Madura Limited
and delivered a new ammonia
and urea production plant now

under construction by PKG. The
construction of the Amoniak-Urea II
plant is scheduled for completion
in 2017. PKG has signed a gas
sales and purchasing agreement
with Husky CNOOC Madura Limited.
Pertagas will thus only act as
shipper of the gas.
83
NOVEMBER
MEMR cuts down oil and gas permits to four
Resources (MEMR) has further
simplified licensing for oil and gas
business, cutting down the number of
permits to four types from 42 types.
IGN Wiratmaja said the ministry will

coordinate with regional governments
over the policy, adding the new policy
aims to revitalize investment climate in
the country.
Speaking during the 2015 National
Natural Gas Stakeholders Workshop

early this week, Wiratmaja said the
permits totaled 104 types several
years ago. Earlier this year, the
number was cut to 42 types and now
it has been cut to only four types.
Minister issues regulation on

non-conventional oil and gas
Resources (MEMR) Sudirman Said has
issued a ministerial regulation aimed
to speed up the development of nonconventional oil and gas.
Key points in the MEMR Regulation
No. 38/2015 on the Acceleration
of Non-conventional Oil and Gas

Development are as follows:
The director general of oil and gas
on behalf of the minister of energy
and mineral resources determines
working areas and terms and
conditions for cooperation contracts
in consideration of technical and

economic aspects of each nonconventional working area. The types
of the contracts are conventional
production sharing contract (PSC),
Sliding Scale PSC, and Gross Split
Sliding Scale PSC.
Vice president inaugurate RFCC Cilacap

Vice President Jusuf Kalla
inaugurated has the operation of
the Residual Fluid Catalytic Cracker
(RFCC) of the Cilacap refinery in
Central Java owned by state owned oil
and gas fir PT Pertamina.
The RFCC has the capacity
of processing 62,000 bpd
of Low Sulfur Waxy Residue
84
(LSWR), which is produced by the

refinerys Crude Distillation Unit
(CDU) II, into high-value product,
namely HOMC. It also increase the
refinerys LPG production and add
a new product, namely propylene,
to the refinery, Pertamina said in
a statement.
The US$ 846.89 million project
was constructed by the consortium of

Adhi-GS E&C.
The RFCC, which consists 21
units of equipment, came onstream
on Sept. 30, 2015. At 100 percent
operation, it can produce 37,000
bpd of HOMC, 1,066 tons per
day (tpd) of LPG and 430 tpd of
propylene.
NOVEMBER
Petronas inaugurates maiden production
of Bukit Tua, Kepodang fields
Malaysias oil and gas firm
Petronas inaugurated the maiden oil
and gas production of Bukit Tua field
in Ketapang PSC, and Kepodang field
in Muriah PSC, both offshore East
Java.
Petronas said in a statement
that the inauguration ceremony,
held at the onshore receiving facility
(ORF) in Gresik, East Java, was
led by Director General of Oil and
Gas at the Ministry of Energy and
Mineral Resources, IGN Wiratmaja
Puja, and attended among others
by Head of the upstream oil and
gas regulator SKK Migas, Amien
Sunaryadi, company officials and
local government officials.
The Bukit Tua field, operated by
Petronas subsidiary PC Ketapang
II Ltd, is an integrated oil and gas
project which is expected to reach
production peak of 20,000 bpd of oil,
and 50 mmscfd of gas.
Poten & Partners named to assess

Masela block technology
The government has appointed
Poten & Partners Inc as independent
consultant to make assessment
on what technology to be used in
developing the Abadi gas field in
Masela block, Maluku.
Yes, we have appointed Poten
& Partners. SKK Migas (upstream oil
and gas regulator) is processing the
work contract before the parties sign
on it, hopefully tomorrow (Tuesday),

said Director for Upstream
Management at the Directorate
General of Oil and Gas Djoko Siswanto
to Petromindo.
The government has decided
to get the help of an independent
international consultant following
disagreement among officials on
whether to use floating LNG facility
or onshore facility in developing the

Masela block.
Inpex Corp, the operator of
Masela block, has proposed for
the use of 7.5 million tons per
annum capacity floating LNG
facility to develop the Abadi field
in its plan of development (POD),
which has also been approved by
SKK Migas.
85
NOVEMBER
TPPI plant resumes operation, able
to save $2.2b in forex reserves
PT Trans Pacific Petrochemical
Indotama (TPPI) has resumed
the operation of its refinery and
petrochemical plant in Tuban, East
Java after years of stoppage, allowing
state owned oil and gas firm PT
Pertamina to significantly cut its oil
fuel and LPG imports, the Ministry of
Energy and Mineral Resources said in
a statement.
The operation of the TPPI plant
allows Indonesia to save its foreign-
exchange (forex) reserves by

US$2.2 billion per year as a result
of the reduction of the fuel imports,
Pertaminas President Director Dwi
Soetjipto said on Wednesday in a
ceremony attended by President Joko
Widodo.
Dwi said TPPI is able to produce
61,000 bpd of Premium gasoline,
10,000 bpd of HOMC and 11,500 bpd
of diesel oil and 480 metric tons per
day of LPG.
Pertamina signs contracts with 11

biodiesel producers
State owned oil and gas firm PT
Pertamina signed contracts with 11
producers of Fatty Acid Methyl Ester
(FAME), also known as biodiesel,
for the purchasing of a total of 1.84
million kiloliters (kl) of biodiesel over
the period of November 2016 through
April 2016.
Pertaminas spokesperson Wianda
Pusponegoro said in a statement the
purchasing contracts come in line with
the existing regulation that raises the
mandatory level of biodiesel blended
in diesel oil to 20 percent next year
86
from 15 percent this year.

Wianda did unveil the names
of the 11 FAME producers. But,
According to the directorate general
of oil and gas website, the 11 firms
are PT Cemerlang Energi Perkasa,
PT Wilma Bioenergi Indonesia, PT
Pelita Agung Agriindustri, PT Ciliandra
Perkasa, PT Musim Mas, PT Darmex
Biofuels, PT Energi Baharu Lestari,
PT Anugerahinti Gemanusa, PT
Wilmar Nabati Indonesia, PT Bioenergi
Pratama Jaya, and PT Primanusa
Palma Energi.
DECEMBER
Govt mulls measures to cut domestic gas price
The government is mulling several measures to cut
the price of natural gas on the domestic market, Director
General of Oil and Gas IGN Wiratmaja said on Tuesday
(Dec.8).
One of the measures is cutting the governments
take from gas production. This is part of President Joko
Widodos Phase I Economic Policy Package announced

several months ago.
There are as many as 31 gas supply from oil and gas
contractors across the country where the governments
take is being studied for reduction. We assure the
contractors take will remain unchanged, he said.
Government
allows BP to
export part of
output from
Tangguh train 3
Mineral Resources (MEMR) said
in a letter to BP Plc, the leader in
the Tangguh LNG consortium, that
part of the output from the planned
third train facility at the Tangguh
LNG plant in West Papua can be
exported.
at the ministry Djoko Siswanto said
on Wednesday that part of the output
from train 3 allocated for the domestic
market can be exported if the
domestic market could not absorb the
entire output allocation.
He added that the ministry, in the
letter, also expressed its support for
the development of the Tangguh train
3, and acknowledged that certainty
of buyers is crucial for the project to
proceed.
As has been reported by this portal
on November 12, BP has sent a letter
to the MEMR, asking for certainty
regarding domestic demand for LNG
from the train 3.
87
Courtesy of Eatskal
OIL&GAS
Eastkal Supply Base starts

providing service for rigs
By: Bernard Loebs
he Eastkal Supply Base port

in East Kalimantan, owned
by PT Pelabuhan Penajam
Banua Taka, a subsidiary
of IDX-listed conglomerate PT Astra
International, has started providing
service for oil and gas rig since
September of this year.
The first rig to use the service is
the Panama-flagged Soehanah jack-up
rig.
Eastkal Supply Bases Marketing
88
Director Billy P. Kadar explained

Soehanah rig was previously leased
by Total E&P Indonesie (TEPI) for
operation at Mahakam block in East
Kalimatan. After the work contract
ended in August of this year, it was
brought to Eastkal Supply Base for
repair and maintenance.
After Soehanah, another jackup
rig, called Raniworo, will be
brought to the port for repair and
maintenance once its work contract
for Mahakam block has ended. In

the near future, a swamp barge
drilling rig, called Hibiscus, will also
be brought to the port for the same
purpose, Billy said.
Eastkal Supply Base has been
developed by Astra in order to
capture business opportunities in the
oil and gas sector. Under the cabotage
policy that has come into effect in
the country for several years, oil and
gas companies are only allowed to
lease Indonesian-flagged rigs. Due to

the lack of Indonesian-flagged rigs,
many oil and gas companies have
to lease foreign-flagged rigs. The
government allows this to happen
but require them to obtain the socalled Temporary Import License for
the rigs. After the contracts on the
rigs have ended, they must be taken
outside of the country. Most of the
rigs are taken to Singapore ports for
repair and maintenance.
Thanks to the development of
ports such as Eastkal Supply Base,
foreign-flagged rigs do need to be
taken outside of the country after
their contracts end. The government
has issued the Second Package of
Economic Policies which allow
certain ports such as Eastkal Supply
Base as bonded zones to provide
service for foreign-flagged rigs.
Foreign-flagged rigs, which in the past
had to be taken to ports outside of the
country after their contracts ended,
can now receive such service at ports
such as Eastkal Supply Base.
Aside from oil and gas companies,
Eastkal Supply Base also serve mining
companies by providing storage for
ammonium nitrate, Billy said.
Facilities that have been built
at Eastkal Supply Base include a
200m-long dedicated jetty with a
water depth of 12 meters, which
can accommodate two vessels each
with the capacity of 10,000 dwt; a
12,000 sq m closed warehouse, an
open-space stockpiling field; heavy
equipment such as cranes, forklifts,
trailers etc.
Eastkal Supply Base is 100
percent owned by Astratel Nusantara,
the infrastructure unit of Astra
Internasional, which acquired the
port from investment firm Bahana
Securitas back in January 2013. The
acquisition was made in line with

Astras strategy of strengthening the
value chain of the groups businesses.
Astra has a widely-diversified
businesses automotive, mining,
plantation, IT, infrastructure and
logistics industries.
In November 2014 Eastkal Supply
Base received a decree from the
Finance Minister that declares the
operational area of Eastkal Supply
Base a custom area. Furthermore
the company has obtained a permit
to operate as Custom Temporary
Storage (TPS). Thanks to the TPS
permit, PSC holders may place their
imported goods at Eastkal Supply
Base without having to pay import tax
before undergoing master clearance.
Arya N. Soemali, President
Director of Eastkal Supply Base, told
Petromindo in May of this year that
oil and gas contractors are challenged
to work more efficiently amid the oil
price drop. Eastkal Supply Base can

help them to work more efficiently.
Like or not, everyone in oil and
gas upstream sector has to work
efficiently now at the time the crude
price has dropped to US$50 per
barrel. The contractors will benefit
from reduced logistics costs, he says.
He says if PSC holders bring their
imported goods and equipment
directly to Indonesian ports, such as
Eastkal Supply Base facility, rather
than through Singapore, they can cut
their logistics time by five to seven
days. Saving from fuel expenditure
for one shipping activity can reach Rp
1-2 billion, not including other costs
such as docking fee which may costs
hundreds of Singaporean dollar a day.
Compared with logistics costs,
including handling, docking and
storage costs, in Singapore, the
costs in Indonesia are 30-50 percent
lower, he said.
Arya N. Soemali
89
bIOFUEL
11 firms to supply biodiesel

to Pertamina, AKR
90
General of New and Renewable

Energy and Energy Conservation at
the Ministry of Energy and Mineral
Resources Rida Mulyana as saying
that the 11 firms will start supplying
the biodiesel this month (November
2015) so as to help realize the
governments target this year for 15
percent biodiesel mix, under which
every one liter of automotive diesel
oil contains 15 percent biodiesel.

According to the directorate
generals website, the 11 firms
assigned to supply Pertamina with
biodiesel are PT Cemerlang Energi
Perkasa, PT Wilma Bioenergi
Indonesia, PT Pelita Agung
Agriindustri, PT Ciliandra Perkasa,
PT Musim Mas, PT Darmex Biofuels,
PT Energi Baharu Lestari, PT
Petromindo|Boim
he government has
appointed 11 palm oil
companies to supply
fatty acid methyl ester, or
biodiesel, to state-owned oil and gas
firm PT Pertamina (Persero), and
IDX-listed fuel distributor PT AKR
Corporindo Tbk, Bisnis Indonesia
reported recently.
The paper quoted Director
Anugerahinti Gemanusa, PT Wilmar

Nabati Indonesia, PT Bioenergi
Pratama Jaya, and PT Primanusa
Palma Energi.
Meanwhile, PT Musim Mas, PT
Wilmar Nabati Indonesia, and PT
Wilmar Bioenergi Indonesia are
assigned to supply biodiesel to AKR.
The paper said that the 11 firms
will supply biodiesel from November
of this year until April of 2016, with
supply to be made in every six-month.
Biodiesel is considered crucial in
Indonesias efforts to minimize the
national consumption of oil fuels and
reduce pressure on local currency.
Pertamina imports a large amount of
oil fuels to meet domestic needs and
routinely buys dollar on the market to
finance the imports, putting pressure
on the local currency in the process.
Meanwhile, biodiesel is available in
abundance on the domestic market
and Pertamina can buy it using the
local currency.
In Indonesia, biodiesel is mostly
produced from palm oil, which
Indonesia has in abundance. The
obligation to mix biodiesel with diesel
oil was introduced by the government
several years ago to cut Pertaminas
imports of diesel oil and thereby to
save the countrys foreign exchange
reserves.
Pertamina recently said it targets
to absorb 5.14 million kiloliters of
biodiesel next year, five times as
much as this year.
This is in line with the
governments regulation which
increase the mandatory level of
biodiesel mixture in diesel oil to be
sold for public service obligation
(PSO) and power generation. The
mandatory level of biodiesel mixture
for PSO a local term referring to
diesel oil sold for transportation
sector at subsidized price will

increase to 20 percent next year
from 15 percent this year, while the
mandatory level for power industry
will rise to 30 percent from 25
percent.
If the target is realized, Pertamina
will be able to save its dollar
spending by US$1.94 billion on the
price assumption of around $60 per
barrel, Vice President for Corporate
Communication Wianda Pusponegoro
said recently.
According to Wianda, Pertamina
is projected to absorb 966.785 kl of
biodiesel through the end of this year.
Resources Sudirman Said recently
issued new Ministerial Regulation
No 29/2015 on the provision of
biodiesel in a bid to help achieve the
governments target of 15 percent
biodiesel mix in diesel oil.
The new regulation, which was
signed by the minister on Sep. 11,
2015 allows diesel fuel distributors

such as Pertamina to directly appoint
its suppliers of biodiesel and their
respective quota, instead of tender
mechanism, starting November of
this year. The provision of biodiesel
will be held in every six months,
according to a statement from the
directorate general of new and
renewable energy and energy
conservation.
An evaluation team, comprising
of related government offices such as
the directorate general, the ministry
and consumers groups, will also be
set up to evaluate the implementation
of the biodiesel provision, the
statement said
The government has increased
the mandatory biodiesel mix in diesel
fuel to 15 percent starting April of
this year from 10 percent previously.
However, implementation of the
policy has been hampered due to the
lack of supporting regulations.
91
Technology
Cambridge University
creates ultimate battery
cientists have developed

a working laboratory
demonstrator of a lithiumoxygen battery which has
very high energy density, is more than
90 percent efficient, and, to date, can
be recharged more than 2,000 times,
showing how several of the problems
holding back the development of
these devices could be solved, the
University of Cambridge said recently
in a press release.
Lithium-oxygen, or lithiumair, batteries have been touted as
the ultimate battery due to their
theoretical energy density, which is
ten times that of a lithium-ion battery.
Such a high energy density would be
comparable to that of gasoline and
would enable an electric car with a
battery that is a fifth the cost and a
fifth the weight of those currently on
the market to drive from London to
Edinburgh on a single charge.
However, as is the case with other
next-generation batteries, there are
several practical challenges that need
to be addressed before lithium-air
batteries become a viable alternative
to gasoline.
Now, researchers from the
University of Cambridge have
demonstrated how some of these
obstacles may be overcome, and
developed a lab-based demonstrator
of a lithium-oxygen battery which
has higher capacity, increased energy
efficiency and improved stability over
previous attempts.
Their demonstrator relies on
92
a highly porous, fluffy carbon

electrode made from graphene
(comprising one-atom-thick sheets
of carbon atoms), and additives that
alter the chemical reactions at work
in the battery, making it more stable
and more efficient. While the results,
reported in the journal Science, are
promising, the researchers caution
that a practical lithium-air battery
still remains at least a decade away.
What weve achieved is
a significant advance for this
technology and suggests whole new
areas for research we havent
solved all the problems inherent
to this chemistry, but our results
do show routes forward towards a
practical device, said Professor Clare
Grey of Cambridges Department of
Chemistry, the papers senior author.
Many of the technologies we
use every day have been getting
smaller, faster and cheaper each

year with the notable exception of
batteries. Apart from the possibility
of a smartphone which lasts for days
without needing to be charged, the
challenges associated with making a
better battery are holding back the
widespread adoption of two major
clean technologies: electric cars and
grid-scale storage for solar power.
In their simplest form, batteries
are made of three components: a
positive electrode, a negative electrode
and an electrolyte, said Dr Tao
Liu, also from the Department of
Chemistry, and the papers first author.
In the lithium-ion (Li-ion)
batteries we use in our laptops and
smartphones, the negative electrode
is made of graphite (a form of
carbon), the positive electrode is
made of a metal oxide, such as lithium
cobalt oxide, and the electrolyte is a
Petromindo|Boim
lithium salt dissolved in an organic

solvent. The action of the battery
depends on the movement of lithium
ions between the electrodes. Liion batteries are light, but their
capacity deteriorates with age, and
their relatively low energy densities
mean that they need to be recharged
frequently.
Over the past decade, researchers
have been developing various
alternatives to Li-ion batteries, and
lithium-air batteries are considered
the ultimate in next-generation
energy storage, because of their
extremely high energy density.
However, previous attempts at
working demonstrators have had low
efficiency, poor rate performance,
unwanted chemical reactions, and can
only be cycled in pure oxygen.
What Liu, Grey and their
colleagues have developed uses a
very different chemistry than earlier
attempts at a non-aqueous lithium-air
battery, relying on lithium hydroxide
(LiOH) instead of lithium peroxide
(Li2O2). With the addition of water
and the use of lithium iodide as a
mediator, their battery showed far
less of the chemical reactions which
can cause cells to die, making it far

more stable after multiple charge and
discharge cycles.
By precisely engineering the
structure of the electrode, changing
it to a highly porous form of
graphene, adding lithium iodide, and
changing the chemical makeup of the
electrolyte, the researchers were able
to reduce the voltage gap between
charge and discharge to 0.2 volts.
A small voltage gap equals a more
efficient battery previous versions
of a lithium-air battery have only
managed to get the gap down to 0.5
1.0 volts, whereas 0.2 volts is closer
to that of a Li-ion battery, and equates
to an energy efficiency of 93%.
The highly porous graphene
electrode also greatly increases
the capacity of the demonstrator,
although only at certain rates of
charge and discharge. Other issues
that still have to be addressed include
finding a way to protect the metal
electrode so that it doesnt form
spindly lithium metal fibres known as
dendrites, which can cause batteries
to explode if they grow too much and
short-circuit the battery.
Additionally, the demonstrator
can only be cycled in pure oxygen,

while the air around us also contains
carbon dioxide, nitrogen and
moisture, all of which are generally
harmful to the metal electrode.
Theres still a lot of work to
do, said Liu. But what weve seen
here suggests that there are ways
to solve these problems maybe
weve just got to look at things a little
differently.
While there are still plenty of
fundamental studies that remain
to be done, to iron out some of the
mechanistic details, the current
results are extremely exciting
we are still very much at the
development stage, but weve shown
that there are solutions to some of the
tough problems associated with this
technology, said Grey.
The authors acknowledge support
from the US Department of Energy,
the Engineering and Physical Sciences
Research Council (EPSRC), Johnson
Matthey and the European Union via
Marie Curie Actions and the Graphene
Flagship. The technology has been
patented and is being commercialized
through Cambridge Enterprise, the
Universitys commercialization arm.
93
COMPANIES
T Rukun Raharja Tbk (RAJA)

has expressed optimism that
it will manage to increase
its net profit by 6.56 percent
to US$ 199 million next year. Its
optimism was based on the plan to
increase capital expenditure allocated
for their projects next year.
RAJAs Finance Director Djauhar
Mauladi said recently in Jakarta
that his companys target of capital
expenditure next year will be around
US$ 40 million. But this will depend
on its negotiations with others
concerned.
The US$ 40 million target was
said to be minimal. If the negotiations
with the companys partners can be
concluded earlier, then the target will
be higher. The company has reported
that it has a number of projects that
are ready to be realized next year and
will contribute to the performance of
the company.
During the 3rd quarter of this
year, Djauhar said that the companys
revenue increased slightly to US$
147.011 million, as compared to
US$ 145.545 million at the same
period last year. Most of the revenue
was derived from distribution,
transmission of natural gas and
compressed gas.
He said that at the end of this year
its revenue is predicted to decrease
to US$ 191.241 million, from USD
197.117 million at the same period
last year.
Until the 3rd quarter this year,
the company has booked a net profit
94
Courtesy of Raja
RAJA upbeat on next year

performance
Budiman Parhusip
at US$ 5.489 million, or decreased

by around 10 percent from the
same period last year at US$ 6.106
million. It is mainly caused by the
appreciation of the US dollar against
the rupiah that had resulted in higher
income tax, reaching up to 33.80
percent compared to that at the same
period last year. It was also caused
by deceleration of economic growth,
especially during the last six months..
But he said that there will be
improvement in the next few months.
He said by improving efficiency his
company will be able to book a net
profit by the end of this year at US$
7.950 million, as compared to US$
7.803 million in 2014.
RAJAs President Director
Budiman Parhusip said that
since Itochu Corp joined with a
share ownership of 33 percent,
expectations are high that the
company will significantly improve

its performance. As Itochu has
technological capability, financial
sources, and international network,
then the companys plans in the years
ahead can be more easily realized.
By having a strategic partner,
we hope that in the future we will
be more progressive in pursuing
development programs, said
Parhusip.
On increasing value added to its
gas business, RAJA has entered the
downstream business. One option it
had implemented is to venture to the
power business. It is also considered
as a way to create demand for gas
they have.
Among the projects, the company
expected to be realized next year
were several power projects as part
of the national power project of
35,000 MW. The company stated that
it had participated in tenders of 4 gasbased independent power producers
(IPP) and 1 tender for LNG supply.
Weve passed pra-qualification stage
for several tenders. One of them is for
developing a gas-fired power plant
with capacity of 2 x 800 MW in Java.
Well become an IPP developer and
gas provider as well. It will need a
total of 350 mmscfd for 25 years. On
this we partner with Mitshubishi corp
and PJB, said Parhusip, adding the
company will also build a 100-MW
power plant in Jambi, and supplier of
gas for a number of power plants.
Thomas Robiana Sembiring
OIL&GAS
Worker protests hit CPI fields
Courtesy of Riau
undreds of subcontract workers of PT Chevron

Pacific Indonesia (CPI) held rally for two
consecutive days in early December to protest
layoffs.
SKK Migas Chief Representative for northern Sumatra
Supriyono told Petromindo that the protest was organized
by a labor group called the All-Indonesia Workers Union
(SBSI).
The workers first held protests in Rumbai on Dec.
3, 2015 and continued the following day in Minas. The
protest in Rumbai involved 300 people while the protest
in Minas involved 350 people. During the protest in Minas,
they blocked the access road to the oil field.
The protestors threatened to forcibly suspend
production activities unless CPI agrees to hire back dozens
of workers that have been laid off by the companys subcontractor.
We will convey our aspirations to Chevron. One of
them is that around 82 employees that have been laid off
by one of CPIs subcontractor should be hired back, one of
the protesters, Sohib, said.
Supriyono said the 82 workers who lost their jobs
were employed by a subcontractor who failed in the recent
tender for housing maintenance held by CPI. CPI now hires
a different subcontractor.
CPI has replaced its subcontractor because the old

one failed in the tender. The contractor of the previous
subcontractor ended on Sept. 30, 2015. It has been
replaced by the tender winner, Supriyono explained.
The old subcontractor is PT Surya Mulia Gita Graha
(SMGG), while the new one is PT Beasco.
According to Supriyono, Beasco has given chances
for the employees of SMGG to move to the firm so that
they may continue working at CPIs projects. It sent
letters to SMGG workers for interview but the letters got
no response. Beasco then decided to hire workers from
outside SMGG.
Supriyono said production at CPI remains normal
despite the protests.
Meawhile, CPI Corporate Communications Manager
Dony Indrawan said CPI has no right to interfere with the
problem.
CPI has no right to interfere with the internal problems
of its business partners. Still, CPI will assure our business
partners to provide service in line with their contracts
and follow the existing regulations, Dony said, while
expressing hopes that all problems can be resolved the
peaceful way and all parties come to the best solution.
Febry Silaban
95
OIL&GAS
Medco invests $460m for gas

development in Block A
96
Upstream authority SKK Migas said earlier that the

first gas from the Block A is expected to come on stream
in 2018 at a volume of 63 bbtud, which will be distributed
to industries in Aceh and North Sumatra via the ArunBelawan pipeline.
Last January, Medco signed a Gas Sales and Purchasing
Agreement (GSPA) with Pertagas in which the latter
agrees to offtake the gas from Block A. Total volume of
gas to be supplied under the GSPA is 200 trillion British
thermal unit (tbtu) worth US$2 billion with a period of
13 years. The total volume is 198 tbtu with daily supply
amounting to 78 bbtu. The price is set at $9.45 per mmbtu
at tie-in point of the Arun-Belawan gas pipeline. Arun is
located in Aceh, while Belawan is the main port in North
Sumatra.
Block A is 41.67 percent controlled by Medco
(operator), 41.66 percent by SGX-listed KrisEnergy and
16.6 percent by Japanese firm Japex.
The hospital that was officiated on Nov. 3, 2015
was developed Medco and its partners as part of their
community development program.
This hospital has been built at a cost of Rp 75 billion,
which is borne by Medco together with our partners. The
cost is a contribution for the PSC holders, and not part of
cost recovery, he said.
Febry Silaban
Petromindo|Khalsa
DX-listed integrated energy company PT Medco

Energi Internasional Tbk through its subsidiary PT
Medco E&P Malaka will invest US$460 million for gas
field development in Block A PSC, Aceh.
President Director Lukman Mahfoedz told Petromindo
that the amount is the total investment to be spent by
the firm and its partners until the Commercial Operation
Date (COD) of the block, including $230 million for the
Engineering, Procurement, and Construction (EPC) work
to be carried out by a consortium comprising of PT Encona
Inti Industri and PT JGC Indonesia.
The rest will be used to finance the drilling of 10
development wells in the field, Lukman said on Nov. 3,
2015 during the ceremony to inaugurate the Dr. Zubir
Mahmud General Hospital in Aceh Timur regency
Lukman explained the gas reserve of the block was
discovered by a company called Asam Merah back in 1972.
After changing hands several time, in 2007, the block
was acquired by Medco along with partners who finally
realized the construction of facilities to produce gas from
the block.
We can now smoothly monetize the gas reserve
thanks the existence of the Arun-Belawan pipelines, he
said, referring to the gas pipelines owned by PT Pertamina
Gas (Pertagas), the subsidiary of state owned oil and gas
firm PT Pertamina, which has been in operation since late
last year.
Petromindo|Dasir
OIL&GAS
DSLNG, GE signs contract

service agreement
T Donggi-Senoro LNG
(DSLNG) and PT GE Oil and
Gas Indonesia signed on
Nov. 30, 2015 a contract
service agreement for maintaining
the formers LNG plant equipment
amounting 102 million euros.
DSLNG said in a statement the
contract service agreement is a long
term contract to support reliability
and stability of the plant operation
performance.
The work scope of GE Oil and Gas
Indonesia is to monitor and maintain
the existing equipment at the site,
both GE and non-GE manufacturing,
including the personnel assignment at
the site to guarantee the constant and
reliability of the plant operation.
Our main purpose is to ensure
the plant is well performed and
able to produce LNG reliably so that
we can meet our commitment to
deliver LNG to our buyers aligned
with the companys mission. We
want to ensure there will be no
hiccups to operate the plant due to
technical issues in order to meet our
goal. Therefore, we appoint GE to
support our LNG plant operation. GE
is a reputable and reliable company

which has advance technology. GEs
products and services are used by
majority of LNG plant in the world
which makes us confident to work
with GE, said Gusrizal, President
Director of DSLNG, at the signing
ceremony, in Jakarta.
Donggi Senoro LNG Plant, worth
US$2.8 billion of investment, located
at Banggai Regency of Central
Sulawesi Province, has successfully
entered the operation phase since
June 2015 and delivered the LNG
cargo starting on August 2, 2015
for both domestic and international
markets.
DSLNG has entered into Gas
Sales Agreements (GSA) with gas
sellers of PT Pertamina Hulu Energi
Tomori Sulawesi, PT Medco E&P
Tomori Sulawesi and Tomori E&P
Ltd. undera Joint Operating Body
(JOB) of Pertamina-Medco E&P
Tomori Sulawesi ( JOBPMTS)]
and PT Pertamina Eksplorasi dan
Produksi (EP) [under Matindok Gas
Development Project (MGDP)]. Based
on GSAs, the DSLNG LNG Plant will
receive gas supply from the Senoro-
Toili Block operated by JOB PMEPTS

amounting to 250 million cubic feet
per day and from the Matindok Block,
operated by MGDP, amounting to 85
million cubic feet per day. In addition,
the upstream parties will also supply
gas for domestic users among others
for ammonia plant and power plant.
DSLNG has entered into LNG SPA
for long term supply with Chubu
Electric, Kyushu Electric, and Korea
Gas Corporation. The LNG shipments
have been delivered to KOGAS and
Kyushu, whilst for Chubu will be
delivered by end of this year.
The Donggi Senoro LNG
project is the first model under the
downstream business scheme which
separates the gas production at
upstream and the liquefied natural
gas processing at downstream. The
downstream business development
allows optimization of state revenue
since the LNG plant investment is not
subject to cost recovery. The Donggi
Senoro LNG plant is the fourth LNG
plant in Indonesia.
Godang Sitompul &

Febry Silaban
97
OIL&GAS
ice President Jusuf Kalla has

inaugurated the operation
of the Residual Fluid
Catalytic Cracker (RFCC) of
the Cilacap refinery in Central Java
owned by state owned oil and gas
firm PT Pertamina (Persero).
The RFCC has the capacity of
processing 62,000 bpd of Low Sulfur
Waxy Residue (LSWR), which is
produced by the refinerys Crude
Distillation Unit (CDU) II, into highvalue product, namely HOMC. It
also increases the refinerys LPG
production and add a new product,
namely propylene, to the refinery,
Pertamina said in a statement recently.
The US$ 846.89 million project
was constructed by the consortium
of PT Adhi Karya (Persero) Tbk and
Goldstar Co. Ltd of South Korea. The
RFCC, which consists 21 units of
equipment, came onstream on Sept.
30, 2015. It produces High Octane
98
Mogas Component (HOMC) with

octane content more than 93. At 100
percent operation, it can produce
37,000 bpd of HOMC, 1,066 tons
per day (tpd) of LPG and 430 tpd of
propylene.
Most of the HOMC product is
further processed into Premium
gasoline. The RFCC has increased
the refinerys Premium gasoline
production capacity to 91,000 bpd
from 61,000 bpd. It thus enables
Pertamina to reduce its Premium
gasoline imports.
The government fully supports
all efforts that are aimed to create
national energy independence,
including increasing the national
oil fuel production to meet the
continually-growing demand.
Gradually, Indonesia must be able to
reduce its oil fuel imports. Thanks
to efforts that have been and will be
carried out by Pertamina to increase
the capacity of its refineries, we are

optimistic that Indonesia will no
longer need to import oil fuels in the
future, Jusuf said.
Minister Sudirman Said stated
that the Cilacap plant is the largest
refinery of Pertaminas 6 refineries,
as it has the production capacity of
348,000 barrels per day. The Cilacap
refinery which was established in
1974 supplies 60 percent of the total
oil fuels (BBM) need in Java and 34
percent of the total in Indonesia.
He said that in the next six years,
Pertamina RU IV Cilacap will become
the largest refinery in Southeast
Asian region.
Sudirman said that besides
the refinery, there was also a
groundbreaking ceremony of the
Cilacap Blue Sky Project, which is a
revitalization of the old refinery of
Cilacap.
Petromindo|Khalsa
Vice president inaugurates

RFCC Cilacap
Petromindo|Khalsa
POWER
PLN leasing Turkeys power

plant vessel
vessel which also functions as power plant has

arrived in Indonesia. The so-called Marine
Vessel Power Plant (MVPP) is leased by state
owned electricity firm PT Perusahaan Listrik
Negara from a company in Turkey to supply power in
North Sulawesi Province.
A see-off ceremony was held on Dec. 8, 2015, attended
by President Joko Widodo, to mark the departure of the
vessel from the Tanjung Priok port in Jakarta to Amurang,
Minahasa Selatan Regency in North Sulawesi.
The 120-MW vessel power plant called Karadeniz
Powership Zeynep Sultan will be stationed close to the
PLTU Amurang coal fired power plant, where it will be
operated to strengthen power supplies for the North
Sulawesi-Gorontalo grid. Built in 2014, the vessel power
plant is leased by PLN for five years, the firm said in a
statement but did not name the company that owns the
vessel.
PLN said it will sign contracts to lease similar vessels
to be stationed in somewhere northern Sumatra, Kupang,
Ambon and Lombok. The vessel for northern Sumatra has
a capacity of 240 MW, while the ones for Kupang, Ambon
and Lombok have a similar capacity of 60 MW.
One of the advantages of such power plant is that it is
easy to be relocated, PLN said. It takes only three to four

weeks to move it from one location to another. It allows
PLN to cut costs by Rp 350 billion per year and enable the
firm to make a quick response in case of power shortage
suddenly occurring in certain areas.
The power plant is equipped with a dual fuel engine,
making it able to use either heavy fuel oil or gas. In the
beginning, PLN will use fuel oil, according to PLN.
The MVPP will arrive in Amurang in seven days. It
arrived in Tanjung Priok on Dec. 1, 2015 after 30 days of
voyage from Turkey through Suez Canal, Indian Ocean and
Sri Lanka.
The peak load of the North Sulawesi-Gorontalo grid
now stands at 325 MW, while the installed capacity of the
power plants there is 325 MW. However, at present, the
grid is experiencing a shortage of 50 MW because several
power plants are either shut down for maintenance or can
operate optimally due to various problems.
PLN is finishing the construction of PLTG Gorontalo
gas turbine power plant (100 MW), which is par to the
35,000 MW program. A unit of the power plant will come
onstrream at the end of this year or early next year. It is
the first power plant of the 35,000 MW program that will
come onstream.
99
eVENTS
KEEP SPIRIT HIGH

Photos: Petromindo Team
Petromindo Group holds its regular annual meeting in
every December. Participated by all staff members of all
divisions, such a meeting is aimed to evaluate the current
year and design a new strategy for next year. This year, the
meeting was held at a venue in the national park of Mount
Halimun, Bogor, West Java. The theme of the meeting was
Keep the Spirit High in 2016.
100
101
Petromindo
Year-End
Gathering
Photos: Dasir
Petromindo Group invited its colleagues
and partners both from mining and oil and gas
sectors for a year-end gathering at Mercure
Hotel TB Simatupang, Jakarta. In a lively and
warm event, Petromindo also celebrated the
5th anniversary of CoalAsia Magazine.
102
103
STATISTICS
Indonesian crude price (August November 2015)
80
Indonesian crude price (US$/bbl)

BENCHMARK CRUDE
1.
2.
3.
4.
5.
6.
7.
8.
SLC
ARJUNA
ATTAKA
CINTA
DURI
WIDURI
BELIDA
SENIPAH (C)
Nov-14
Oct-15
Nov-15
70
76.33
74.63
77.59
76.37
73.54
76.50
79.66
77.93
42.92
43.72
46.49
42.77
40.55
42.92
47.83
48.08
41.03
41.33
43.72
39.87
37.42
40.02
45.43
45.94
60
50
42.81
43.13
Aug-15
Sep-15
OTHER CRUDE
ANOA
ARUN (C)
BADAK
BEKAPAI
BELANAK
BENTAYAN
BRC
BULA
BUNYU
CAMAR
CEPU
GERAGAI
GERAGAI (C)
HANDIL MIX
JAMBI
JATIBARANG
JENE/SERDANG
KAJI
KERAPU
KLAMONO
COMP. PLB. SLT.
LALANG
LANGSA
LIRIK
MADURA
MENGOEPEH
MESLU
MUDIMIX
NSC/KATAPA/ARBEI
PAGERUNGAN (C)
PAM.JUATA/SANGA2 MIX
PANGKAH
RAMBA/TEMPINO
RIMAU/TABUHAN
SANGATTA
SELAT PANJANG
SEPINGGAN YAKIN MIX
SOUTH JAMBI (C)
TANJUNG
TAP
TIAKA
UDANG
WALIO MIX
WEST SENO
30
Arjuna
Duri
Senipah (C)
Nov-14
Oct-15
Nov-15
77.99
77.93
77.59
77.59
69.67
74.37
69.86
73.04
76.33
75.01
69.99
76.52
69.60
74.78
76.52
76.33
76.33
76.73
79.32
73.04
72.89
76.38
77.19
76.22
74.76
76.52
74.42
74.33
77.48
77.18
76.43
73.33
76.52
76.23
76.33
76.33
74.63
75.99
76.52
73.10
70.54
76.41
72.58
76.94
46.89
48.08
46.49
46.49
38.76
40.96
46.92
40.05
42.92
44.10
39.08
43.11
46.66
43.87
43.11
42.92
42.92
43.32
47.49
40.05
41.98
42.97
46.09
42.81
43.85
43.11
43.32
43.42
46.38
47.33
43.02
42.42
43.11
42.82
42.92
42.92
43.72
46.14
43.11
42.19
37.55
43.00
41.67
45.84
44.12
45.94
43.72
43.72
36.37
39.07
46.95
36.92
41.03
41.71
36.69
41.22
46.69
41.48
41.22
41.03
41.03
41.43
45.09
36.92
39.59
41.08
43.32
40.92
41.46
41.22
40.55
41.03
43.61
45.19
41.13
40.03
41.22
40.93
41.03
41.03
41.33
44.00
41.22
39.80
34.42
41.11
39.28
43.07
Source: Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources
104
41.44
Oct-15
Nov-15
40
SLC
Cinta
Belida
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
43.68
Attaka
Widuri
ICP
INDONESIAN OIL, GAS & POWER

POWER INDUSTRY BOOMING BIG TIME
VOLUME 57 | DECEMBER 22 - JAMUARY 22, 2016

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INDONESIAN OIL, GAS & POWER

POWER INDUSTRY BOOMING BIG TIME

VOLUME 57 | DECEMBER 22 - JAMUARY 22, 2016

PETROMINDO DECEMBER 22 JANUARY 22, 2016

54 opinion | Madjedi Hasan

PETROMINDO DECEMBER 22 JANUARY 22, 2016

PETROMINDO DECEMBER 22 JANUARY 22, 2016

PETROMINDO DECEMBER 22 JANUARY 22, 2016

OIL & GAS

astkal Supply Base

PETROMINDO DECEMBER 22 JANUARY 22, 2016

Vice President Jusuf Kalla has

Overseas advertising representative

PETROMINDO DECEMBER 22 JANUARY 22, 2016

PETROMINDO DECEMBER 22 JANUARY 22, 2016

Advertising inquires contact

PETROMINDO DECEMBER 22 JANUARY 22, 2016

A big boom time in

ndonesia is seeing something unprecedented in the countrys history: A

PETROMINDO DECEMBER 22 JANUARY 22, 2016

DX-listed power company PT

PETROMINDO DECEMBER 22 JANUARY 22, 2016

Nasser Ali Yaslam, CEO National

construction industry in the regions

are happy that finally we can sign

alliance with NGI and FO Trading,

temporary power generators in

INDUSTRY NEWS: OIL & GAS

Indonesia was officially readmitted

Craig Stewart re-elected

The Indonesian Petroleum

PETROMINDO DECEMBER 22 JANUARY 22, 2016

the target of 279,000 bopd, SKK

Erec S. Isaacson of Conocophillips

IEA admits Indonesia

CPIs production reaches

Current oil production from fields

Indonesia has been officially

PETROMINDO DECEMBER 22 JANUARY 22, 2016

Courtesy of SKK MIGAS

INDUSTRY NEWS: OIL & GAS

Local market unable

PETROMINDO DECEMBER 22 JANUARY 22, 2016

domestic demand for LNG from

Minister sets deadline

Minister of Energy and Mineral

decision regarding the Mahakam

PETROMINDO DECEMBER 22 JANUARY 22, 2016

INDUSTRY NEWS: OIL & GAS

State Minister of State-Owned

Gas traders must build

The government is calling on gas

PETROMINDO DECEMBER 22 JANUARY 22, 2016

PGN to be appointed as sole

which already have built their own

PSC to save $250m in costs

Upstream authority SKK Migas

oil prices that will result in saving of

PETROMINDO DECEMBER 22 JANUARY 22, 2016

INDUSTRY NEWS: OIL & GAS

Coordinating Minister for

PETROMINDO DECEMBER 22 JANUARY 22, 2016

of Maritime Affairs Rizal Ramli who

Perpres issued to boost use of