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Pertamina seeks to buy more crude oil from Production Sharing Contractors

FSO Gagak Rimang, offshore Cepu Block [Image credit : ExxonMobil]
JAKARTA (RambuEnergy) – Indonesia’s state run energy company is seeking to increase the volume of crude oil it purchases from Production Sharing Contractors (PSCs), including from ExxonMobil, one of the largest of Indonesia’s oil producer other than Chevron.

So far, Pertamina has managed to purchase 123,000 barrels of crude oil per day from 29 PSCs, out of potential 225,000-250,000 bpd.

VP Corporate Communication of Pertamina Fajriyah Usman was quoted by Kontan daily as saying that Pertamina is still in talks with ExxonMobil over the planned purchase crude owned by ExxonMobil.

Assuming that ExxonMobil’s oil production from Cepu Block reaches 208,000 bpd, then as much as 181,000 bpd is sold to Pertamina, representing 71% of the total daily output, in line  with the share of the government in the PSC scheme.

Both parties are now discussing the price of crude owned by ExxonMobil to be purchased by Pertamina.

VP Public and Government Affairs of ExxonMobil Erwin Maryoto said ExxonMobil and Pertamina are discussing over the purchase of crude from Cepu for the period of after July. “We are opened to discussion,” Maryoto said.

In January this year, Pertamina has reached a deal with Chevron, to purchase the portion of crude owned by Chevron. In the past Chevron’s portion of crude has been sold to the international market.

At the initial stage, Pertamina receives 2.5 million barrels of oil per month in the period of January to June 2019 from Chevron. The decision to purchase crude from PSCs to some extent has narrowed oil and gas trade deficit as reflected in the February export and import data.

Banyu Urip field was discovered in 2001. The Production Sharing Contract (PSC) was signed on September 17, 2005. MCL, a subsidiary of ExxonMobil Corporation holds 45 percent interest, Pertamina EP owns 45 percent interest and the remaining 10 percent is held by Joint Operating Body of Cepu Block  (BKS), which represents local governments.

The Banyu Urip field is predicted to have oil reserves of 445 million barrels.

The oil production of Cepu Block has increased from 185,000 bpd in 2017 to target of 216,000 bpd in 2018. As of January this year, the average daily production has reached 220,000 bpd. The production level is expected to last until next year before it declines.

Cepu Block has become the largest oil production in Indonesia, taking over Chevron position, which now records average production of 190,000 bpd. (RK)

 

 

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