03 policy regulation and opportunities on upstream sector
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DIRECTORATE GENERAL OF OIL AND GAS
MINISTRY OF ENERGY AND MINERAL RESOURCES
REPUBLIC OF INDONESIA
POLICY, REGULATION AND OPPORTUNITIES ON UPSTREAM SECTOR
LONDON, 11 OCTOBER 2010
OUTLINE
POLICY AND REGULATION
CURRENT CONDITION
BUSINESS OPPORTUNITIES
CONCLUSION
POLICY AND REGULATION
Energy Elasticity < 1Energy Elasticity = 1,8
Primary Energy Mix 2006 Energy Mix 2025
NON FOSSIL ENERGY < 5% NON FOSSIL ENERGY/
New & Renewable Energy: 17 %
Gas
28.57%
Coal
15.34%
Oil51.66%
Geothermal 1.32%
Hydro Power 3.11%
Gas & CBM
30%
Coal 33%
Oil
20%
NRE,17%
Biofuel 5%
Geothermal
5%Biomass, Nuclear,
Hydro Power, Solar,
Wind Power 5%
Liquefaction Coal
2%
TARGET OF ENERGY MIX(Presidential Regulation No. 5 of 2006)
TARGETS FOR 2025
Maintain oil production level of 1 Million BOPD
50% national operatorship
Security of domestic Fuel Supply and Industrial Feedstock
91% local content (goods and services)
99% skilled national workforce
Achieving oil and gas safety, zero accidents, zero failure, and achievement of zero flares, and zero waste
PETROLEUM POLICY Oil and Gas Supply Security
Oil And Gas Utilization
Oil and Gas Pricing Policy
Unconventional Oil and Gas Business
Conservation Of Oil and Gas Production
Increasing National Capacity In Oil And Gas Industry
FUEL POLICY Fuel Supply Security
Fuel Categorization
Pricing Policy
Fuel Diversification
Fuel Standard and Quality
Fuel Efficiency
POLICY AND TARGETSOF INDONESIA OIL & GAS MANAGEMENT
REGULATION
• Oil and Gas Law Number 22 Year 2001
• Republic of Indonesia Government Regulation Number 35/2004 on Oil and Gas Upstream Business Activities as amended in Government Regulation Number 34/2005 and in Government Regulation Number 55/2009.
1. MEMR DECREE No. 01 Year 2008 concerning Guidance on OilMining Business Activities for Old Well
2. MEMR DECREE No. 03 Year 2008 concerning Guidance for IdleField to be Developed
3. MEMR DECREE No. 35 Year 2008 concerning Stipulation AndOffering Of Oil And Gas Working Acreages
4. MEMR DECREE No. 36 Year 2008 concerning CoalbedMethane Business Activities
5. MEMR DECREE No. 06 Year 2010 concerning Guidance toIncrease Oil & Natural Gas Production Policy
SOME REGULATIONSTO INCREASE OIL AND GAS
EXPLORATION AND PRODUCTION
FISCAL INCENTIVES
In order to increase oil and gas production, The Government OfIndonesia (GOI) provided fiscal incentives by issuing threeMinisterial Decrees, which are:
Regulation of the Minister of Finance Number 177/PMK.011/2007exemption of import duty on goods imported for the purpose ofupstream oil and gas and geothermal business activities.
Regulation of the Minister of Finance Number 179/PMK.011/2007tariff of import duty on imported drilling platforms or floating or sub-sea production facilities.
Regulation of the Minister of Finance Number 24/PMK.011/2010value added tax on imported goods for upstream oil and gas andgeothermal exploration activities, will be paid by the GOI in fiscal year2010.
CURRENT CONDITION
INDONESIA’S OIL AND GAS RESERVE(STATUS: JANUARY 1, 2009)
112.431.26
902.4217.74
570.663.68
346.4252.14
745.1121.78
89.6423.71
987.015.30
PAPUA
NATUNA
MOLUCCAS
43.11
51.952.68
121.015.55
NAD
NORTH SUMATRA
CENTRAL SUMATRA
SOUTH SUMATRA
EAST JAVA
WEST JAVACELEBES
BORNEO
4,026.6710.57
OIL RESERVE (MM Barrel)
PROVEN = 4,303.10 MM Barrel
POTENTIAL = 3,695.39 MM Barrel
TOTAL = 7,998.49 MM Barrel
113.341.27
NOTE:
OIL RESERVE
GAS RESERVE
GAS RESERVE (TSCF)
PROVEN = 107.34 TSCF
POTENTIAL = 52.29 TSCF
TOTAL = 129.63 TSCF
15.22
SELECTED LIST OF OIL AND GAS OPERATORS IN INDONESIA
1. AMERADA HESS (INDONESIA-PANGKAH) LTD.
2. APEX (BENGARA II) LTD.
3. B.G INTERNATIONAL LIMITED
4. BP INDONESIA
5. CHEVRON PACIFIC INDONESIA
6. CNOOC SOUTHEAST SUMATRA LTD.
7. CONOCOPHILLIPS
8. COSTA INTERNATIONAL GROUP LTD.
9. ENERGY EQUITY EPIC
10. ENI INDONESIA LTD.
11. EXXONMOBIL OIL INDONESIA, INC.
12. GOLDEN SPIKE SOUTH SUMATRA LTD.
13. IMR - PETRONUSA BUMIBAKTI
14. INDO-PACIFIC RESOURCES (JAVA) LTD
15. INPEX CORPORATION
16. KALREZ PETROLEUM SERAM LTD.
17. KODEKO ENERGY CO LTD.
18. KONDUR PETROLEUM S.A.
19. KOREA NATIONAL OIL CORPORATION (KNOC)
20. KUFPEC ( INDONESIA ) LTD.
21. LASMO (MALAGOT) LTD.
22. LUNDIN B.V
23. MATRIX OIL ( ASAHAN ) PTY. LTD.
24. MEDCO E&P INDONESIA
25. MOBIL LANGSA INC.
26. PERMINTRACER PETROLEUM LTD.
27. PETROCHINA INTERNATIONAL
28. PETRONAS CARIGALI BERHAD LTD.
29. PETROSELAT LTD.
30. PREMIER OIL NATUNA SEA, BV.
31. SANTOS
32. SELE RAYA MERANGIN DUA
33. SHELL COMPANIES IN INDONESIA
34. SINOPEC INTERNATIONAL PETROLEUM
35. STAR ENERGY (KAKAP) Ltd.
36. TALISMAN ASIA LTD.
37. TITAN RESOURCES (NATUNA) INDONESIA LTD
38. TOTAL E & P INDONESIE
39. VICO INDONESIA
40. YPF JAMBI MERANG
41. ZODAN N.V.
42. ZUDAVI N.V.
CBM BASIN IN INDONESIA
Total CBM Basin = 11
(Advance Resources International, Inc., 2003)
13
7 CBM Contracts signing in year 2008:
1) Sekayu 5) Barito Banjar I
2) Bentian Besar 6) Barito Banjar II
3) Indragiri Hulu 7) Sangatta I
4) Kutai
8) Ogan Komering
9) Sangatta II
10) Tabulako
3 CBM Contracts signing inMei 2009:
5 CBM Contracts signing in August 2009:
11) Tanjung Enim
12) Ogan Komering II
13) Pulang Pisau
14) Barito Tapin
15) Kotabu
INDONESIA COALBED METHANE CONTRACT AREAstatus: June 2010
5 CBM Contracts signing in November 2009:
16) Batangasin
17) Muara Enim
18) Rengat
19) Sanga-Sanga
20) Barito
ROAD MAP OF CBM DEVELOPMENT
Existing Oil & Gas acreage be prioritized
to develop CBM
Estimated Production
1.0 BcfD 2.0 BcfD
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20252005 2006 20072004
PP: CBM – 1Rambutan
(GOI Sponsor)
PP CBM: – 2,3(private investment)
Start of CBM era(1st CBM Contract)
Estimated CBMProduction ~
Estimated CBM Production
Increasing number of CBM Development ContractAverage production = 250 MSCFD/well
Government participation
Project evaluation
Start of Commercial Era
CBM production
PP : Pilot Project
Legend:
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20252011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20252005 2006 20072004
PP: CBM – 1Rambutan
(GOI Sponsor
PP CBM: – 2,3
Start of CBM era(1st CBM Contract)
Estimated CBM Production
Estimated CBMProduction ~
Estimated CBM Production
Increasing number of CBM Development ContractAverage production = 250 MSCFD/well
Government participation
Project evaluation
Start of Commercial Era
CBM production
PP : Pilot Project
Legend:
1.8 BcfD
Issuing of regulation to promote CBM (for Oil &
Gas and Coal Mining)
OPPORTUNITIES
16
INDONESIA PETROLEUM FIRST BIDDING ROUND YEAR 2010
1st Bidding Round Schedule
A. Direct Proposal (Closed)Access bid Document : 12 July 2010 – 24 August 2010
Clarification Form : 19 July 2010 – 20 August 2010
Submit Participating Document: 25 August 2010, 09.00 AM – 02.30 PM
B. Regular TenderAccess Document : 12 July 2010 – 5 November 2010
Clarification Form : 19 July 2010 – 1 November 2010
Submit Participating Document : 8 November 2010, 09.00 AM – 02.30 PM
Plan For CBM Working Acreage Bidding Round Year 2010
CONCLUSION
1. In order to increase the declining production and the inclining national oil and gas demand, the Government of Indonesia issued the policy to push the oil and gas production and exploration.
2. Based on the National Energy Policy, Indonesia has developed unconventional gas for national fuel demand.
3. The friend countries are expected to actively participate in developing the Indonesia’s oil and gas.
CONCLUSION
THANK YOU
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