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Indonesia’s SKK Migas receives revised POD of the $12 bln IDD project from Chevron

gendalo-and-gehem

JAKARTA (rambuenergy.com) – The Indonesian Special Task Force for Upstream Oil and Gas Business (SKK Migas) at the Energy and Mineral Resources (ESDM) said it has received revised plan of development (PoD) of the Indonesia Deepwater Development (IDD) in Makassar Strait on Dec. 31, 2015 with early estimated investment of $12 billion.

Chairman of SKK Migas Amien Sunaryadi said SKK Migas will kick off meeting to evaluate the revised PoD of IDD project in second week of January. “We can’t tell you much about it as we have just received it,” he said.

He said the revision was made on the Gendalo and Gehem fields. The revision of the POD was made as the company recalculate the project and take into account the higher oil and gas reserves.

Under the proposed revision, Chevron projects the Gendalo field to come on stream in 2022, while Gehem field will come onstream in 2023.

Amien also declined to disclose the planned investment value to develop the project after it was revised.

Director General for Oil and Gas at the Energy and Mineral Resource Ministry (ESDM) I.G.N. Wiratmaja said late last year that the investment to develop the IDD project could now be below US$10 billion following the decline of oil price.

Two years ago, Chevron decided to postpone the development of the IDD project as it needs to recalculate the cost of investment. It was also seeking to extend its production sharing contract (PSC) much earlier, which is yet to be approved by the government.

The mega IDD project investment plan has been revised several times. In 2008, the project cost was estimated at US$6 billion and further increased to US$12 billion in 2013.Chevron secured a plan of development (PoD) approval from the government in 2008. The project involves four production sharing contracts (PSC), namely Ganal, Rapak, Makassar Strait and Muara Bakau.

The Makassar Strait PSC will expire in 2020. Chevron has requested the government to extend the Makassar Strait PSC to 2028, so that the four PSCs will expire at the same time.

Industry players have said the delay of the IDD project was also due in part to legal issue related with bioremediation case in which some executives of CPI and its contractors were accused of wrongdoings. Bioremediation is a process that uses biological organism to remove or neutralize pollutants.

The Jakarta Corruption Court (TIPIKOR) has sentenced the director of environmental services of PT Green Planet Indonesia, Ricksy Prematuri, and director of construction service firm PT Sumigita Jaya, Herlan in Ompo, to five and six years in jail, after finding that both executives were guilty of causing state losses.

The court verdict stated that Green Planet carried out the testing of the oil-polluted soil characteristic wrongly as well as applied wrong bacteria to neutralize the pollutants.

Four employees of CPI, Bachtiar Abdul Fatah, Endah Rumbiyanti (environmental manager), Kukuh Kertasafari (team leader) and Widodo are now facing court proceedings. (*)

 

 

 

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