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ntegrated energy services provider PT Elnusa plans to manufacture an artificial lift for the oil industry in cooperation with PT GE Oil & Gas Indonesia, a local subsidiary of the global advanced technology and services provider GE Oil & Gas.

The local production of artificial lifts was aimed at increasing local content in equipment widely used in the oil industry.

The artificial lift, which uses an electrical submersible pump (ESP), is used in oil wells to help increase pressure and push oil to the surface.

'€œThe cooperation is one way to support the government in improving national manpower quality and increase the use of local components in oil and gas services. We are committed to increasing the use of locally made submersible pumps by more than 50 percent within the next four years,'€ said Elnusa president director Syamsurizal Munaf after the recent signing of the agreement.

Energy and Mineral Resources Ministerial Regulation No. 15/2013 on local component use in the upstream oil and gas industry aims for the use of locally made ESPs in the country to reach 25 percent by 2020.

Most oil companies today use imported ESP brands and 100 percent locally made ESPs do not exist.

Syamsurizal added the pumps will be produced by subsidiary PT Elnusa Fabrikasi Konstruksi (EFK) at its more than 10-hectare Batam site in Riau Islands. Employee training, meanwhile, will be provided by GE Oil & Gas.

EFK, established in 1982, has been manufacturing oil and gas equipment, such as hydraulic workover units, slickline units, single triplex pumps and oil and gas modules on skids. The company also produces and trades oil country tubular goods.

For the collaboration, Elnusa will take on the role as the integrated energy provider, EFK as the manufacturer and maintenance provider under the supervision and quality control of GE Oil & Gas experts.

Production will kick off pending another signing of an agreement concerning implementation.

GE Oil & Gas president director Iwan Chandra said that its ESPs will help oil companies to lift oil in fields facing challenges, including high gas, heavy oil, high temperatures and abrasiveness.

'€œESP is a common artificial lift in Indonesia, besides the bean pump and gas lift, all of which are usually used in old oil wells that lack internal pressure to burst oil outward,'€ Iwan said.

Energy and Mineral Resources Ministry data shows that currently Indonesia has more than 13,000 old wells that have been operating since the 1970s and most of them are in the Pertamina area.

Syamsurizal noted that at least 2,000 old wells can use the electrical submersible pumps to support the artificial lift system.

To increase fabrication of local content, Elnusa had earlier in October signed a cooperation agreement with PT Technics Offshore Jaya, a subsidiary of Singapore'€™s listed Technics Oil & Gas, to enhance its production capability.

Elnusa is primarily owned by state oil and gas company Pertamina. As of September, Elnusa booked
Rp 2.6 trillion in revenues, a 14 percent drop from the Rp 3.03 trillion earned in the same period last year caused by decreases in world oil prices.

However, net profits have gone up to Rp 226 billion, a 7 percent increase from Rp 211 billion, thanks to savings on subcontractor fees, direct materials and the enhanced productivity of existing employees. (rbk)