According to Energy and Mineral Resources Ministerial Decree No. 15/2015, priority is given to Pertamina to undertake expired oil and gas blocks. The company is also allowed to access a block’s data room prior to its expiration date to calculate the risk before eventually determining whether to submit a proposal to take over the block.

The ministry’s upstream oil and gas business development director, Tunggal, said Pertamina had asked to be granted access to the data room of Rokan, which is located in Riau Islands, a few months ago.

Rokan is one of 23 blocks with a contract that will expire between 2018 and 2021.

The ministry accepted Pertamina’s request on Dec. 28, 2017, paving the way for the company to access Rokan’s data, including information related to reserves and historical exploration and exploitation activities.

“Pertamina has the right to access the block’s data. We have given Pertamina permission and also informed Chevron about the matter,” Tunggal told The Jakarta Post on Monday.

“However, it is also possible that Pertamina eventually refuses to take over Rokan after studying the data.”

Tunggal said the ministry had met twice with CPI, a local unit of American oil and gas giant Chevron Corporation, asking whether the company was still committed to operating Rokan beyond 2021. However, CPI needed more time to coordinate with the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), he added.

If both Pertamina and CPI are interested in operating Rokan, the two companies will have to send proposals to SKKMigas, which will later inform and give its recommendation to Energy and Mineral Resources Minister Ignasius Jonan.

Pertamina and CPI could not be immediately reached for comment.

Rokan is Indonesia’s most productive oil block. Its oil lifting — the colloquial term for ready-to-sell production — averaged at 224,300 barrels per day (bpd) throughout 2017, accounting for 28 percent of the national lifting figure. However, Rokan’s lifting fell by 12.4 percent in 2017 from 256,000 bpd in 2016.

“Rokan’s lifting figure will drop again this year due to its natural declining condition,” SKKMigas deputy for operation control Fatar Yani Abdurrahman previously said. Hence, he called on CPI to further boost its enhanced oil recovery (EOR) activities to maintain Rokan’s production rate in the future.

CPI initially started a trial run in 2012 to implement an EOR technique called surfactant flooding at its Minas field at Rokan.

In September 2016, the company claimed that the method, which forced it to disburse US$222 million in investments, had bore fruit with an increase of around 17 to 22 percent in the field’s recovery factor.

Komaidi Notonegoro, the executive director of Jakarta-based energy think tank ReforMiner Institute, said Pertamina would likely find partners to jointly operate Rokan, especially considering the company’s mounting financial burdens.

Between January and September 2017, Pertamina’s revenues climbed by 17.8 percent year-on-year to $31.38 billion. Nonetheless, its net income fell by 29.7 percent to $1.99 billion, driven by a 27 percent increase in its cost of goods sold and operating expenses.

“It is natural for any international oil company to team up with other entities in operating a block. That way, all parties can share the risks and revenues, while seeking other investment opportunities in other blocks,”
he said.

Pertamina took over the Mahakam block in East Kalimantan from France’s Total E&P Indonesie and Japan’s Inpex Corporation on Jan. 1.

Pertamina is currently trying to find partners to jointly operate Mahakam, which faces a declining production rate of around 51 percent per year despite its status as the nation’s largest gas block.

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