2 Japanese Rigs Ready to Enter Indonesia

Two units of the ship supporting activities offshore, type jack-up rig from Japan will go to Indonesia and changed the flag to be Indonesian flag. Ships that fall into category C, this could undoubtedly be able to be provided by the national employers so that the operational restrictions on foreign vessels associated with certain types of cabotage principle extended to May 7, 2011 from earlier on January 1, 2011.

The company is Japan Drilling Company which currently operates at least six units, including jack-up rig, are ready to work in Indonesia. Both of rig will go to Indonesia to follow the rule that requires all marine transport fleet in the country must use ships in Indonesian flag.

Owner and President Director of PT Pelayaran Tamarin Samudera-that explains the company is currently finalizing the plan by looking at the implementation of Law no. 17/2008 on Shipping.

The Japan Drilling Company (JDC) is known to the company that provides specialized services to companies drilling for oil and gas in the sea around the world. JDC currently operates the ship offshore jack-up rig types as much as three units, two units of semi-submersible rigs and one drilling ship. The company has worked more than 40 years in drilling.

Jack-up rigs are operated by company is iu kuryu-10 made in 2008, Sagadril-1 (1984) and Sagadril 2 (1984). The two units are semi submerible rig Naga-1 (1974) and Hakuryu-5 (1977), while the drilling ship named Chikyu (2005).

Previously, jack up rigs operator in Indonesia, PT Apexindo Pratama Duta Tbk known to make the turn flag rig his ship as many as three units of six fleet currently operated. The company has completed three units to replace the flag of rigs operating in Indonesia, while the other three are still in the process.

Disclosure of information will facilitate the national entrepreneurs to provide the ships needed as soon as possible. Shipping Law Revision coercion which was not yet 3 years old can be a bad precedent.

Plan a number of national shipping companies to expand the fleet of offshore supply sector, large-scale FSO type allegedly hampered because the procurement of oil and gas operators that are not transparent.

Pertamina Toward A World Class Oil & Gas Company

Pertamina effort to manifest itself toward the world-class oil and gas company is not just a dream following the company's performance in the upstream and downstream sectors continues to increase. These state enterprises face many challenges as well as hope.

The challenge is how to Pertamina's efforts in realizing the vision of the company's world-class oil and gas as well as to improve its performance as a company a competitive state. Pertamina was born by Government Regulation No 27/1968 as a result of the merger of three oil companies, namely Pertamin, Permigan and Permina.

Ibnu Sutowo was appointed as its first director. Through Law No. 8/1971, Pertamina defined as a state-owned oil and gas company which means all the companies running their business in Indonesia must cooperate with Pertamina, both as the regulator and through cooperation contracts in the working area of Pertamina. Pertamina also acts as an operator because it managed its own working areas.

Driven surge in world oil prices, Pertamina had a golden period in the mid-1970s in which the company posted profits of Rp382, 2 billion. The amount is equivalent to 39% of total state revenues in the budget in the same year. One thing that never happened throughout history, one capable of economic sectors accounted for more than a third of total state revenue. Indonesia was transformed into one of the oil-producing country a respected world.

However, that era has passed. Pertamina is now facing various challenges. In terms of reputation, Pertamina left behind from Petronas, which formerly learned to Pertamina. Meanwhile, Pertamina still trying to get up, Petronas has entered the ranks of giant world oil and gas version of Platt and Fortune magazine.

In terms of economic performance, Pertamina also lagged. Based on the survey of Energy Intelligence, 2008, Pertamina was ranked the 30th as oil and gas company that has a net profit and total assets of the world's largest, while Petronas is ranked 18th world. Petronas even have opened outlets in Indonesia.

Pertamina effort to realize the vision of world-class companies actually been initiated since 2008 and, even in 2006 when the transformation of Pertamina triggered. Pertamina target in 2018, the company became the number one oil company in Southeast Asia. Pertamina intention to manifest itself as a world class company is not kidding. Pertamina is now different, stretching the country's current business is very promising and increasingly aggressive and expansive.

Pertamina will remain the largest oil and gas producer in Indonesia, given Pertamina performance so far does show fantastic results. In the downstream sector, until September 2010 Pertamina's oil production has reached 191,000 barrels per day (bpd) and is targeted to break the 200,000 bpd in 2011.

This figure is much higher when compared with oil production in 2009 is an average of 150,000 bpd. The key to success exceeded the production target because Pertamina has successfully acquired a number of oil and gas companies operating in Indonesia. Pertamina managed to acquire BP's Offshore West Java, including working with the NOC such as BP. Pertamina also acquired assets of Inpex West Java in September 2010.

Not only expansive in the country, the company also started to spread to other countries. Through Pertamina Upstream Energy (PHE), since 2007, Pertamina has been exploring Block SK-305 drilling off the coast of Sarawak, Malaysia, in collaboration with Petronas and Petro Vietnam. This block is predicted to have oil reserves of 541 million barrels and natural gas as much as 1.91 billion cubic feet. On the field, the PHE holds 30% stake.

In addition to SK-305, PHE also has several other blocks such as Block 17-3 and Block 123-3 in the whole Libyan-owned by the PHE. Block 17-3 is estimated to have reserves of 3.5 trillion cubic feet of gas and block 123-3 has 427 million barrels of oil reserves. PHE also pocketed a 10% stocks in Block 10 and 11.1 in Vietnam. In the block, PHE works with Petronas, Petro Vietnam and Quad Energy.

In addition, PHE also has Block 13 in Sudan and Block 3 in Qatar. On the domestic upstream sector, Pertamina, through its subsidiary Pertamina EP, also recorded remarkable achievements. As of January 2010, Pertamina EP managed to produce 130,000 bpd of oil, an increase compared to January previous year (year on year), which amounted to 125,000 bpd. Although the increment is not too fast (about 2.5%), but that achievement should be appreciated in light of the decline in the capacity of oil fields are naturally quite high which is an average of 18% per year.

Field of the central well of Pertamina EP is Java Region with a range of production 25,000 bpd, 19,000 bpd of Sumatra, 32,000 bpd Sukowati field, and Business Unit Limau with 12,000 bpd. Other fields varies between 2,000 to 10,000 bpd. Pertamina EP is the second largest oil producer after Chevron with total profit in 2009 more than Rp20 trillion (not taxed) or equivalent to 80% of the total income of the parent company.

Since established in 2003, the company that was born as a consequence of changes in the status of Pertamina into this company did show satisfactory performance from year to year. In 2003, Pertamina EP's production amounted to 95,000 bpd and jumped to around 102,000 bpd in 2006. This production continues to increase to 110,300 bpdbpd (2008). By the end of 2009, Pertamina EP has exceeded the production target of 125,500 bpd.

For natural gas sector, the average production of Pertamina EP in November 2009 amounted to 1,050 million cubic feet per day. Of these, 28% supplied to the National Gas Company (PGN), 22% to meet the needs of industry, 18% for the fertilizer industry, 18% for power supply, and 14% more to the needs of Pertamina refineries. According to data from the Ministry of Energy and Mineral Resources, Pertamina EP is the largest domestic gas supplier in Indonesia after Total Indonesia.

In the downstream sector, Pertamina also do not want to be whiz at home. Since 2006, Pertamina lubricant has been exporting products to several countries including China, Pakistan, Japan, Singapore, Australia, Malaysia and Cambodia with an average volume of 80,000 kl per year with an average export value of USD240 million per year. In addition to maintaining its market share above, the company also co-branded with local companies, including in Pakistan, Belgium, Qatar, Singapore, and Thailand.

Aviation fuel production of Pertamina has also been recognized internationally. Pertamina is working with airports has been supplying aviation fuel to Singapore, Jeddah, Dubai, Bangkok, Hong Kong and Kuala Lumpur. Not only that, the General Fuel Filling Station owned by Pertamina plans to expand into neighboring countries. In the near future, Pertamina will soon open the first retail outlets in Australia. As a result, various efforts to expand upstream and downstream sectors in the above led to bigger profits.

In 2006 the profits from state enterprises ranging from Rp19 trillion, then rose in 2007 to Rp24,5 billion and rise again in 2008 to Rp30,2 trillion. Based on data from Forbes Global 2009 and LKPP RI 2008, Pertamina is the state with the largest profit of Rp30,2 trillion, followed in second place with earnings of PT Telkom Indonesia Rp14 trillion. The increase in corporate profits in line with the increase in dividends paid to the state.

Performance as indicated Pertamina upstream and downstream sectors in the above shows that what Pertamina aspired to achieve world-class oil and gas company is not just a dream. Since the change of status of Pertamina into a company as stipulated in Law No. 22/2001 on Oil and Gas and followed by Government Regulation No. 31/2003 concerning Amendment to Form a company Pertamina, Pertamina is better. However, behind the various successes, Pertamina still has some homework to be completed.

Pertamina must minimize the cost recovery oil and gas production and more keen anticipation of external factors, especially international oil prices. Both of these affect to Pertamina business and profitability in the upstream sector. As is known, cost recovery resulting from Pertamina's production process is still relatively high. Pertamina's cost recovery during the period 2004-2006 an average of USD27 per barrel.

It is not particularly felt when the international oil price is constant in the range of USD100 per barrel, but it would be very detrimental if oil prices slumped. No less important, as a profit-oriented company Pertamina also have to maintain the quality in every product and services to suit customer satisfaction. For example, applying the standard dose at all filling stations, LPG cylinders to prevent the circulation of counterfeit, fake or lubricants on the market. All the above services must be considered because it deals directly with the daily life of people so of course directly affects the image of Pertamina.

BP Migas Supports The Acceleration of Oil Exploration Program Pondok Makmur

Pertamina EP discovered new oil and gas reserves. Results of the fifth delineation well test (PDM-5) in the area of Pondok Makmur, Bekasi, managed to produce 3600 barrels of oil per day and 5.7 million cubic feet of gas. The result is a production test wells in the largest openings conducted from 1 January 2010.

This success complements previous success in the area of Pondok Makmur, which has been done put on production (POP), which takes oil production from exploration wells.

Pondok Makmur is a new exploration concept of Pertamina to produce oil from the most basic layer or basement. This concept is now to be evaluated and developed carefully, and be aggressive effort Pertamina EP to acquire new oil and gas reserves that is able to be produced quickly.

Acceleration of drilling program at Pondok Makmur not be separated from the support of BP Migas, which has approved work program and budget (WP & B) prior to fiscal year 2010 run, as well as the cooperation of local government of Bekasi who strongly supports the operation of Pertamina in the region.

PDM-5 wells to reach the final depth of 3450 meters that penetrate bedrock marble or similar to a depth of 2918 meters final. Until now the area of Pondok Makmur has produced three wells, the PDM-1, PDM-2 and PDM-3 through a pattern of POP over a total average oil production of 1900 barrels per day and 5.5 million cubic feet of gas. Production was deliberately maintained at a level not too high to maintain reservoir pressure given the wells are still in the status of exploration wells.

Pertamina EP will also be producing wells PDM-4 which is now in the evaluation stage to present a POP proposal to BP Migas.

In 2010, Pertamina EP aggressively carry out exploration drilling of 26 wells with the target of exploration in various regions and the implementation of the 1345 km2 of seismic surveys are three-dimensional (3 D) and 721 km survey of two-dimensional (2 D). During 2009, Pertamina EP, produced 46.4 million barrels of oil and found 60 million barrels of oil. That is, oil discovery of Pertamina EP exceeds the amount produced.

EP Pertamina's oil production target in 2010 of 128 thousand barrels per day and continue working hard to improve the growth of production in the next year. Although this step is not easy considering the majority of field conditions that have been classified as old and natural production decline rate on average is very large: by 18 percent.

OGDCL is Inviting Partners for Gas Development in Jhal Magsi

Oil and Gas Development Company Limited (OGDCL) is inviting tenders for building a gas processing plant in Jhal Magsi. The Jhal Magsi Field is located about 5 KM North East of Jhal Magsi Town, District Dera Murad Jamali, Baluchistan Province.

The initial production from the proposed gas processing plant will be around 15 million cubic feet per day (mmcfd). There are proven gas reserves from two wells while three others are being drilled. The field has high contents of H2S, requiring removal before gas is injected into the transmission network.

Experts predict the possibility of oil being found in the same lease block and the OGDCL may soon give the nation good news in this regard. Although there is little information about the Jhal Magsi gas field in the public domain, the reserves may be larger than a number of existing fields in Sindh, Balochistan and Khyber-Pakthunkhwa.

The company expects the Zin Block in Baluchistan to generate its first gas flows within two years. The Zin block is estimated to have about 9-10 trillion cubic feet (TCF) of gas reserves and we are moving in the area in a couple of weeks to start drilling.

The government is playing down the Jhal Magsi discovery for political reasons. Independent economists hope that Jhal Magsi reserves will help bridge the domestic demand and supply gap. The local industry, already reeling under the effects of excessive power outages, will also get some benefit.

There are also bright chances of finding oil and gas reserves in the Bolan block, particularly in a hilly track near Dhaddar. Foreign firms are engaged in exploring oil and gas in this part of Balochistan. The federal government is providing adequate security to firms exploring oil and gas in this block.

OGDCL and other companies are facing difficulties in carrying out oil and gas exploration in Marri and Bugti tribal territories for political reasons as local tribesmen are demanding full control over their resources.

The people of the area are not prepared to gave Pakistani or foreign companies to exploit there resources only for few jobs they want to be the master of their lands and they must decide on which conditions their natural resources should be exploited, are not prepared to abandon their opposition to Western exploration companies operating in the province, fearing that they will ultimately take over control of their lands.

Almost all companies exploring oil and gas in the Marri and Bugti regions had stopped working after attacks on their officials by Baloch militants.

Qatar Petroleum Sets Offshore Gas Exploration Bids in Early 2011

Qatar Petroleum (QP) is calling for bids for offshore gas exploration to be submitted in early 2011, people familiar with the auction said. The company is the state run energy company in the country with the world’s third largest gas reserves. Bids for rights to explore for gas off the coast of the Arabian Gulf state in an area called block A are due on January 9.

The country, which is the world’s biggest exporter of liquefied natural gas and is the single largest supplier of liquefied natural gas, plans to increase gas output to 23 billion cubic feet a day by 2014 to boost exports and provide fuel for domestic industries and power plants.

Qatar has offered exploration rights to three companies over the past two years. A joint venture between Royal Dutch Shell and China National Petroleum Corp signed a 30 year exploration and production sharing agreement in May for block D. The deal, which includes a five-year exploration period, covers onshore and offshore exploration for natural gas and its production in Qatar Block D. Cnooc Ltd of Hong Kong signed a 25-year agreement with Qatar Petroleum in August 2009 to search for gas in a separate offshore block.

The country expects by early next year to increase its annual capacity for exporting liquefied natural gas to 77 million tons, equivalent to about 3.75 trillion cubic feet of pipeline gas, with the completion of its final planned liquefaction plant. Qatar's future growth may lie in construction of sub-sea pipelines to oil-rich neighbours, which are desperate for gas for energy-intensive economies but reluctant to pay market rates for it.