The Jakarta Post
State-owned energy giant Pertamina has begun constructing three oil and gas rigs worth US$105 million in the gas-rich offshore Mahakam Block to boost domestic production.
Pertamina, through upstream subsidiary PT Pertamina Hulu Mahakam (PHM), signed a deal with engineering contractor PT Meindo Elang Indah on July 27 to have the rigs built by the fourth quarter of 2021.
“At its peak, these three rigs will contribute up to 120 mmscfd [million metric standard cubic feet per day],” said PHM president director Danar Dodjoadhi on July 29.
PHM, Indonesia’s fourth-most productive gas company, produced 624 mmscfd in the first half of the year. It expects the three rigs to provide 20 percent of its total production by 2024.
Pertamina’s investment in the Mahakam Block in East Kalimantan is part of Indonesia’s larger aim of doubling gas production to 12,300 mmscfd by 2030 and becoming a major gas exporter in the Asia-Pacific region.
Developing the aging block further is, however, a very costly undertaking as its reserves are confined in thousands of small, isolated, underground pockets. This means that PHM will periodically have to drill new wells to maintain production levels.
Meindo Elang Indah will build one rig called “Jumelai” in the South Mahakam Field and two other rigs called “North Sisi” and “North Nubi” in the Sisi Nubi Field.
Gas from the three rigs will be channeled to Pertamina’s Refinery Unit V in Balikpapan.
The project, at its peak, will require between 900 and 1,000 workers. The rigs are also expected to have a 51.2 percent local content (TKDN) requirement, said Upstream Oil and Gas Special Regulatory Task Force (SKK Migas) official Sulistya Hastuti Wahyu.
“We extend our appreciation to PHM for completing this tender on time, within 88 days,” he said.