Financing Indonesian Oil & Gas

Importing oil into the country needs a sound and steady financing. As an example, PT Pertamina requires U.S. $ 150 million per day to buy oil. This money is provided by three major national banks: Bank Mandiri, BRI and BNI – upon coordination with Bank of Indonesia (BI).

This week Rudi Rubiandini, SKK Migas Head, visited the Board of PT Bank Negara Indonesia (Persero) TBK. BNI Bank is considered the most advanced in providing banking services to oil and gas industry in the country and has a special interest in financing the development of the oil and gas sector. Mr. Rubiandini made a presentation to top management; of 76 producing PSC in Indonesia 44 are clients of BNI.  Cash management and loans are the major operations of the Bank in sector. In cash management major clients are: Energy Mega Persada (Mosesa Petroleum), Husky-CNOOC Madura Limited, PT Isargas, Tately NV, Inpex and JOB Pertamina-Medco Tomori Sulawesi. Cash management and e-tax payment: Elnusa Petrovin, Vico, BP, PHE WMO, Japan Drilling Indonesia, Kangean Energy Indonesia, ENI, Salamander Energy, Husky CNOOC Madura and CNOOC Ses. The biggest loans are provided for Pertamina, Medco and Gas Negara. Transactions volume for cash management for oil and gas in the first half of 2013 reached $ 4.76 billion.  

 Read more in our Corporate web-site

News Update: Week 26-2013

Losses in Indonesia

This week the data on losses of foreign companies was released.  In 2009-2013, a total of 12 contractors losses totaled $ 1.9 billion – manly due to fail to obtain cost-effective oil and gas reserves in 16 exploration blocks:

1. ExxonMobil PSC (Rangkong-1) $ 123 million -dry wells

2. ExxonMobil (Mandar - Kris-1 well $ 45 million;  Sultan-1 U.S. $ 110 million; Kriss Well-1 ST U.S. $ 24)

3. Statoil (Karama, Ghatotkacha - U.S. $ 98 million, Anoman-1 - $ 43 million, Antasena-1 - U.S. $ 33 million) .

4. ConocoPhillips (Kuma, Kaluku-1 - $ 150 million, Aru-1 - $ 58 million, White Pearl-1 - $ 103)

5. PSC Talisman - $ 84 million.

6. PSC Marathon -  four wells - U.S. $ 103 million.

7. Tately  - two wells -  $ 34 million and U.S. $ 17 million.

8. Japex - $ 31 million.

9. CNOOC PSC - $ 50 million.

10. Hess - two wells - $ 164 million and $ 59 million.

11. Niko Resources - three wells -  $ 37 million, $ 87 million, $ 90 million.

12. Murphy Oil - $ 215 million

 Black- & Gold-listing

On Wednesday Rudi Rubiandini revealed that at least 11 out of 113 oil and gas contractors in the exploration stage were labeled BLACK by SKKMiogas after only conducting seismic studies in three years of exploration. From these 113 only five managed to find profitable hydrocarbon reserves after three years of exploration – for this they were promoted to GOLD status. Among them are Genting Oil Kasuri Pte Ltd, Salamander Bontang Energy Pte Ltd, Pacific Oil & Gas Ltd, KrisEnergy Satria Ltd, and PT Sele Raya Belida

SKKMigas had already recommended 22 oil and gas contractors to terminate their contracts due to poor performance.

 PSC Share Split Change Real?

SKKMigas is thinking on the measures to attract more investors. It is reported that out of projected $26.2 billion investment in the upstream oil and gas in 2013, only 10% ($2.7 billion) will be spent by contractors on exploration to find new reserves. Thus, Jakarta Post quotes Rudi Rubiandini that SKKMigas is working out a new scheme that will give oil and gas companies a bigger share of upcoming production-sharing contracts. Currently the split is 85-15% in favor of the Government for oil production and 70-30% for gas. This issue has a long story (even a special Web-site was existing to discuss), but probably this time it will be materialized?

 Floating Storage Units (FRSU) Indonesia.

An official from the Ministry of Energy and Mineral Resources pointed on June 26^th that the Government should prioritize gas over oil – to lessen dependence on conventional energy.  As one of the roads to do this, he mentioned the necessity of FRSU integration with pipeline system. This was followed by announcement on Wednesday that PT Perusahaan Gas Negara Tbk (PGN) officially started FRSU project with Hoegh LNG – here is how the Norwegian company presents this project:

This $300M facility will be the largest FSRU in Indonesia with capacity of 170,000 cubic meters and is supposed to be completed in 2014. The LNG supply will come from Tangguh Blocks 1 and 2.  The other two FSRU have capacities of 125,000 (Bontang) and 145,000 (Tangguh). A very good description of the subject is done in this document: Current State & Outlook for the LNG Industry; while a detailed data on Tangguh is presented in the report of the Asian Development Bank.

 Rigs Issue

This week the representative of Association of Drilling Oil and Gas Indonesia (APMI) denied the accusation that one of the major obstacles for Oil & Gas exploration is absence of rigs. He opposed SKKMigas point of view – earlier Arief Fanzuri, Chief of the Division of Survey and Oil and Gas Drilling of SKK, blamed the lowest number of drilled wells in Q1-2013 (49% or 43 out of supposed target of 87) on absence of rigs. According to APMI, the issue is not in the rigs, but land acquisition and associated red tape that is about 40%-50% of all obstacles.

More on Rigs – in my previous post: Rig Count in Indonesia - Investor opportunity?

 Pertamina News

 

•  Results of performance of PT Pertamina EP in the first half of 2013: production of oil and condensate was on the average 122,000 bpd – which lower than SKKMigas projected (132,000)
• Pertamina is contemplating to buy 75% participating interest and operatorship in the Ujung Pangkah block in Gresik, East Java from Hess Corporation. The other option under consideration is buy other Hess assets in Thailand.
• Pertamina has decided to call off a deal with Chandra Asri Petrochemical, Indonesia’s largest petrochemical producer, to establish a joint venture to build a petrochemical plant.
• Pertamina Persero PT bought 950,000 barrels of Azerbaijan’s Azeri Light crude for delivery in September to its Balikpapan refinery
• Association of Drilling Oil and Gas Indonesia (APMI) asked Petamina to invest in marine exploration rigs.
• Pertamina signed 3 year master service agreement with Ikon Science for quantitative exploration software, RokDoc.