THE GOVERNMENT ROLE AND STRATEGY TO ATTRACT NEW INVESTMENT IN MATURE BASIN, PRODUCING ... ·...
Transcript of THE GOVERNMENT ROLE AND STRATEGY TO ATTRACT NEW INVESTMENT IN MATURE BASIN, PRODUCING ... ·...
1
11
THE GOVERNMENT ROLE AND STRATEGY THE GOVERNMENT ROLE AND STRATEGY TO ATTRACT NEW INVESTMENT TO ATTRACT NEW INVESTMENT
IN MATURE BASIN, PRODUCING FIELDSIN MATURE BASIN, PRODUCING FIELDS
BY : NOVIAN M. THAIB
(DIRECTOR OF UPSTREAM BUSINESS DEVELOPMENT)
BY : NOVIAN M. THAIB
(DIRECTOR OF UPSTREAM BUSINESS DEVELOPMENT)
DIRECTORATE GENERAL OF OIL AND GASDEPARTMENT OF ENERGY AND MINERAL RESOURCES
REPUBLIC OF INDONESIA
DIRECTORATE GENERAL OF OIL AND GASDEPARTMENT OF ENERGY AND MINERAL RESOURCES
REPUBLIC OF INDONESIA
PRESENTED IN 4th Workshop on the Indonesian PPM Case Study
Jakarta, June 15, 2006
PRESENTED IN 4th Workshop on the Indonesian PPM Case Study
Jakarta, June 15, 2006
22
LEGAL REFORMLEGAL REFORMCURRENT SITUATIONCURRENT SITUATIONMATURE BASIN DEVELOPMENT MATURE BASIN DEVELOPMENT POLICYPOLICY
–– BROWNFIELD BROWNFIELD –– MARGINAL FIELDMARGINAL FIELD
INVESTMENT OPPORTUNITIESINVESTMENT OPPORTUNITIES
PRESENTATION OUTLINE
2
33
LEGAL REFORMLEGAL REFORM
44
• Regulator• Player
Player
RegulatorMIGAS
SupervisorBP MIGAS
PREVIOUS NEW
1971 - 2001 2001 - recent (UU 22/2001)
PERTAMINA(Government)
GovernmentPolicy’s
Boundary
REFORM PHILOSOPHY
3
55
POLICY’S PLATFORM OBJECTIVE
NATIONWELFARE
PROFESSIONALCOMPETENCY
BUILDING
ORGANIZATIONSTRUCTURAL
REFORM
LEGALREFORM
IMPLEMENTATION AND OBJECTIVE
66
LEGAL REFORM
1. OIL AND NATURAL GAS WITHIN TERRITORY OF INDONESIA ARE A NATIONAL ASSET, CONTROLLED BY GOVERNMENT (MEMR)
2. GOVERNMENT AS THE MINING RIGHT HOLDER ESTABLISH AN IMPLEMENTING BODY (BPMIGAS) WHICH CONTROL THE OPERATIONAL MANAGEMENT
3. UPSTREAM BUSINESS ACTIVITIES SHALL BE CONDUCTED THROUGH PRE-DEFINED CONTRACTUAL SCHEMES (COOPERATIVE AGREEMENT)
4
77
LEGAL FOUNDATION
OIL AND GAS AS STRATEGIC NON-RENEWABLE NATURAL RESOURCES WITHIN THE INDONESIA LEGAL TERRITORY ARE CONTROLLED BY THE STATE.LAW 22/2001 REGULATE OIL & NATURAL GAS ACTIVITIES, UPSTREAM ACTIVITIES SHALL BE CONDUCTED AND CONTROLLED THROUGH THE COOPERATION CONTRACT.THE COOPERATION CONTRACT COMPRISE AT LEAST THE FOLLOWING REQUIREMENTS:
A. THE OWNERSHIP OF RESOURCES REMAIN UNDER THE GOVERNMENT OF INDONESIA.
B. MIGAS CONDUCT AND EVALUATE THE ACREAGE OFFERING PROCESS.C. THE IMPLEMENTING BODY CONTROLS THE MANAGEMENT OF OPERATION.D. THE BUSINESS ENTITY OR PERMANENT ESTABLISHMENT UNDERTAKE
CAPITAL AND RISK.
88
CURRENT SITUATIONSCURRENT SITUATIONS
5
99
-10
100 105 110 115 120 125 130 135 140
5
0
-5
DRILLED BASIN, NO DISCOVERY YET
FRONTIER BASIN
PRODUCING BASIN
DRILLED AND PROVEN DISCOVERY, BUT NOT PRODUCING YET
1.
2.
3.
4.
TERTIARY SEDIMENT BASINS OF INDONESIA
1010
NO PRODUCING (8)NO PRODUCING (8)PRODUCING (15)PRODUCING (15)
NO DISCOVERY (15)NO DISCOVERY (15)DISCOVERY (23)DISCOVERY (23)
DRILLED (38)DRILLED (38)UNDRILLED (22)UNDRILLED (22)
SEDIMENTARY BASINS IN INDONESIA (60)SEDIMENTARY BASINS IN INDONESIA (60)
6
1111
1212
Mahakam Delta Creaming Curve
0.02.04.06.08.0
10.012.014.016.0
1970 1975 1980 1985 1990 1995 2000 2005
Discovery Year
Cum
ulat
ive
EUR
(BB
OE)
Handil
TunuPeciko
Deep Water
Creaming Curve West Natuna
0.000.250.500.751.001.251.501.752.00
1970 1975 1980 1985 1990 1995 2000 2005
Discovery Year
Cum
ulat
ive
EU
R (B
BO
E)
Belut/Belanak
North BelutBelida
Kerisi
OIL AND GAS FIELDS > 50 MMBOE
7
1313
121,5
4,270.8
950.8
685.9
869.7
400.1
816.5
145.3
Papua
TOTAL OIL (MMBOE)TOTAL OIL (MMBOE)
Natuna
Maluku
PROVEN = 4,187.47 MMSTBPOTENTIAL = 4,439.48 MMSTBTOTAL = 8,626.96 MMSTB
99
15,3
120.1NAD
62.8
69.1
North Sumatera
Central Sumatera
South Sumatera
East Java West Java
South Sulawesi
East Kalimantan
South Kalimantan
INDONESIA OIL RESERVES(STATUS JANUARY 1st, 2005)
1414
1.27
7.75
24.63
6.04
10.41
53.61
48.80
4.13
24.24South
Sumatera
South Sulawesi
Papua
NATURAL GAS RESERVE (TSCF)(P1 + P2 + P3)
NATURAL GAS RESERVE (TSCF)(P1 + P2 + P3)
Natuna
East Java
EastKalimantan
North Sumatera
West Java
PROVEN = 97.26 TSCFPROBABLE = 48.81 TSCFPOSSIBLE = 39.73 TSCFTOTAL = 185.80 TSCF
4.49
N A D
CentralSumatera
0.43
CentralSulawesi
INDONESIA GAS RESERVE(STATUS JANUARY 1st, 2005)
8
1515
0
200
400
600
800
1000
1200
1400
1600
MB
OPD
TOTAL 1,413.9 1,340.6 1,249.4 1,146.8 1,094.4 1,062.1
OIL 1,272.5 1,208.7 1,117.6 1,013.0 965.8 934.8
CONDENSATE 141.4 131.9 131.8 133.8 128.6 127.3
2000 2001 2002 2003 2004 2005
INDONESIA OIL AND CONDENSATE PRODUCTION(2000 (2000 -- 2005)2005)
1616
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
MM
SCFD
PRODUCTION 7,927 7,690 8,318 8,644 8,278 8,179
UTILIZATION 7,470 7,188 7,890 8,237 7,909 7,824
FLARE 457 502 428 407 369 355
2000 2001 2002 2003 2004 2005
GAS PRODUCTION & UTILIZATION(2000 (2000 -- 2005)2005)
9
1717
PRODUCTION 100%
INVESTMENT CREDIT
MAX COSTRECOVERY : 100%
FTP 10%
EQUITY TO BE SPLIT
INDONESIA SHARE
CONTRACTOR TAKE
TAX 44%
DMO
INDONESIA TAKE
TAXABLE INCOME
CONTRACTOR SHARE
(+)
(-)
(+)(+)
(-)
(+)
(-)
(-)
(-)
(-)
(+)
(+)
(+)DMO FEE
INDONESIA PSC
1818
BLOCKS ARE PREPARED AND DESIGNATED BY MIGAS AND OFFERED THROUGH TENDER.EVALUATION PERIOD FROM ANNOUNCEMENT DATE TO BID SUBMISSION IS 5 – 6 MONTHS.
3. BID INFORMATIONIT CONTAINS THE INFORMATION OF THE TENDER PROCESS INCLUDING INSTRUCTIONS TO THE TENDER PARTICIPANT. THE TENDER PARTICIPANT MUST PURCHASE THE BID INFORMATION AT MIGAS.
4. DATA & INFORMATIONIT IS MANDATORY THAT ANY TENDER PARTICIPANT WILL HAVE TO PURCHASE AN OFFICIAL GOVERNMENT A DATA PACKAGE THROUGH AND SET BY MDM PRIOR TO SUBMITTING THE TENDER DOCUMENT.
5. CLARIFICATION FORUM6. BID PARTICIPATION
THE TENDER PARTICIPANT SHOULD SUBMIT THE ENTIRE TENDER DOCUMENT BEFORE OR ON THE CLOSING DATE OF THE TENDER.
7. BID EVALUATIONTHE TENDER TEAM EVALUATES THE SUBMITTED DOCUMENT BASED ON THE TECHNICAL ANALYSIS, FINANCIAL OUTLAY AND COMMITMENT ( SUCH AS SIGNATURE BONUS ), AND ESPECIALLY THE FIRM COMMITMENT OF THE WORK PROGRAM AS PROPOSED BY BIDDER.
8. DETERMINATION OF THE SUCCESSFUL BIDDER BASED ON THE TENDER TEAM RECOMMENDATION, THE DIRECTOR GENERAL OF OIL AND GAS APPOINTS THE SUCCESSFUL BIDDER .
9. CONTRACT SIGNINGBPMIGAS AND THE SUCCESSFUL BIDDER WILL SIGN THE COOPERATION CONTRACT.
1. ANNOUNCEMENTSPECIAL ANNOUNCEMENT OF THE NEW OFFERED WORKING ACREAGE.
2. BID INVITATIONINVITATION WILL BE DISSEMINATED TO ALL COMPANIES THROUGH OUR HOME PAGE AT HTTP://WWW.GEOMIGAS.COM Bid Invitation
Bid Information
Participation
Determination of theWinning Bidder
Bid Evaluation
Bid InvitationANNOUNCEMENT
BID INVITATION
BID INFORMATION
DATA & INFORMATION
CLARIFICATION FORUM
BID PARTICIPATION
BID EVALUATION
DETERMINATION OF THE SUCCESSFUL BIDDER
CONTRACT SIGNING(BPMIGAS & CONTRACTOR)
11
22
33
44
55
66
77
88
89
REGULAR TENDER
10
1919
DIRECT OFFER
ALL COMPANIES APPLYING FOR THE BLOCK THROUGH THE DIRECT OFFER MECHANISM SHALL PROPOSE AND CONDUCT PRESENTATION TO MIGAS, COVERING TECHNICAL ASSESSMENT OF THE BLOCK POTENTIAL AND COMPANY PROFILE.
TWO (2) TYPES OF DIRECT OFFER MECHANISM :♪ PROPOSE FOR EXISTING UNSOLD BLOCKS ♪ PROPOSE FOR CERTAIN OPEN AREA WITH / WITHOUT
JOINT STUDY.
2020
MATURE BASIN DEVELOPMENTMATURE BASIN DEVELOPMENTPOLICYPOLICY
11
2121
BROWNFIELDBROWNFIELD
2222
1. BROWNFIELD - AN EXISTING PRODUCING FIELD, PRODUCING FIELD IN DECLINE, OR PREVIOUSLY DEVELOPED FIELD. THESE FIELDS, OR PROJECTS WITHIN THESE FIELDS ARE UNECONOMIC UNDER THE CURRENT TERMS & CONDITIONS, WOULD REQUIRE INCENTIVES TO STIMULATE NEW OR ADDITIONAL INVESTMENT IN ORDER TO ENHANCE PRODUCTION AND/OR ADD RESERVES. (TEAM BROWNFIELD KKKS)
2. BROWNFIELD – DEFINED AS MATURE FIELD IN A STATE OF DECLINING PRODUCTION OR REACHING THE END OF THEIR PRODUCTIVE LIFE. (SCHLUMBERGER)
BROWNFIELD
DEFINITIONS
12
2323
INCENTIVE FOR EOR : – SECONDARY RECOVERY :
17% INVESTMENT CREDIT, ANDDMO HOLIDAY 60 MONTH
– TERTIARY RECOVERY :CHANGING EQUITY SPLIT (STANDARD IN PSC)
NON EOR STILL IN THE FINALIZATION PROCESSSTILL IN THE FINALIZATION PROCESS
EOR AND NON EOR
BROWNFIELD INCENTIVE ALTERNATIVEDMO Holiday 60 MONTHCOST RECOVERY UPLIFTICR (Interest Cost Recovery)
INCENTIVE FOR BROWNFIELD
2424
0100200300400500600700800900
100011001200130014001500160017001800
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Prod
uctio
n (M
BOPD
)
Oil Production Profile: 1994-2015Efforts to increase future outputsOil Production Profile: 1994Oil Production Profile: 1994--20152015Efforts to increase future outputsEfforts to increase future outputsBPMIGASBPMIGAS
Historical OutputHistorical Output Projection to 2015Projection to 2015
No Additional Effort Profile
(do nothing)
Maintenance Optimization
On-going Field Development Projects
Marginal FieldsMarginal FieldsBrown FieldsBrown Fields
10001000
13
2525
MARGINAL FIELDMARGINAL FIELD
2626
MARGINAL FIELD DATA
RESERVES INITIAL PRODUCTIONCONTRACTOR
BOPD
BP ONWJ
2 JAMBI EOR 19 40,083.3 9,870 1,150 331.0 46
7 PREMIER OIL 10 51.0 147 - - -
8 CPI 24 7,068 - - - -
TOTAL 99 87,697.6 10,428.2 79,130 529.8 197
3 TALISMAN OK 1 - 9.6 - 3.3 1
KODECO
KONDUR
CNOOC
42,450
-
1,330
34,200
OIL(MBO)
GAS(BSCF) MMSCFD
1 16 82.6 387.8
13.8
-
-
195.5 91
4 3 7,753.0 - -
5 15 29.7 - 5
6 11 32,630.0 - 54
WELLSNO. FIELDS
14
2727
0100200300400500600700800900
100011001200130014001500160017001800
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Prod
uctio
n (M
BOPD
)
Oil Production Profile: 1994-2015Efforts to increase future outputsOil Production Profile: 1994Oil Production Profile: 1994--20152015Efforts to increase future outputsEfforts to increase future outputsBPMIGASBPMIGAS
Historical OutputHistorical Output Projection to 2015Projection to 2015
No Additional Effort Profile
(do nothing)
Maintenance Optimization
On-going Field Development Projects
Marginal FieldsMarginal Fields
10001000
2828
MOST OF OIL FIELDS AND MANY LARGER GAS FIELDS ARE ALREADY MATURE. THIS MEANS THAT EXPLORATION & DEVELOPMENT PROSPECTS (PARTICULARLY FOR OIL) ARE GETTING SMALLER AND HARDER TO FIND.HOWEVER, NUMEROUS SMALLER DISCOVERIES, LEADS AND PROSPECTS, AS WELL AS DEPLETED FIELDS MAY CONTRIBUTE SIGNIFICANT FUTURE ADDITIONAL CAPACITY OF SUPPLY AND CAN BE COMMERCIALIZED IF A DYNAMIC MARGINAL FIELD PROGRAM CAN BE INNOVATED.
CHALLENGES IN THE DEVELOPMENT OF MARGINAL FIELDS
15
2929
MAJOR CHALLENGES FOR MF DEVELOPMENTS AND PROGRAM ARE RELATED TO
REDEFINITION OF A BETTER MF TERMINOLOGY,NEGOTIATION OF AN ACCEPTABLE MARR,ACCEPTABLE INCENTIVES ADOPTION AND IMPLEMENTATIONSIMPLIFICATION OF PROCEDURES AND PROCESSESBUILDING UP COMMITMENTS & POLITICAL WILL TO REALIZE THE PROGRAMS.
CHALLENGES IN THE DEVELOPMENT OF MARGINAL FIELDS
3030
COST RECOVERY UPLIFT = 20%
NEW INCENTIVE IN THE MARGINAL OIL FIELD DEVELOPMENT(DECREE OF MINISTER OF ENERGY AND MINERAL RESOURCES NO. 0008/2005)
16
3131
PROBLEMATIC DEFINITION & CHALLENGES
THE STANDARD DEFINITION IN THE PSC IS NOT FLEXIBLE ENOUGHA MODIFIED DYNAMIC DEFINITION AND NEW CRITERIA IS REQUIRED IF SIGNIFICANT ADDITIONAL CAPACITY OF FUTURE OIL SUPPLY IS EXPECTEDIT SHOULD ALSO COVER MOST OF SMALL FIELDS & SOME LARGER FIELDS THAT BECOME UNECONOMIC AT CURRENT PSC TERM AND CONDITION AT VARIOUS MATURITY STAGENEEDS STRONG EFFORT AND POLITICAL WILL
MARGINAL FIELDS
3232
RECOVERABLE RESERVES AND PRODUCTION
CURRENT ECONOMIC CONDITIONS : OIL PRICE ASSUMPTION, PRODUCTIVE LIFE, MARR
OPERATING METHODS : FIT FOR PURPOSE TECHNOLOGY, INFRASTRUCTURE, MINIMUM FACILITIES CONCEPT DESIGN
GOVERNMENT REGULATIONS : PSC TERMS & CONDITIONS “WIN-WIN" INCENTIVES
ECONOMIC PARAMETERECONOMIC PARAMETER
MARGINAL FIELDS
17
3333
EFFORTS & CHALLENGESEFFORTS & CHALLENGES
THE CREATION OF A JOINT TASK FORCETHE CREATION OF A JOINT TASK FORCE(BPMIGAS + PSCS + SERVICES COMPANIES(BPMIGAS + PSCS + SERVICES COMPANIES))
TO RETO RE--EVALUATE THE ECONOMICS OF MMFS?EVALUATE THE ECONOMICS OF MMFS?
TO DEFINE THE METHOD TO IMPROVE MMFS ECONOMICSTO DEFINE THE METHOD TO IMPROVE MMFS ECONOMICS
TO DEFINE WHAT INCENTIVES REQUIREDTO DEFINE WHAT INCENTIVES REQUIRED
NOT ECONOMICNOT ECONOMIC
NOT ECONOMICNOT ECONOMIC
MATURE & MARGINAL FIELDS
3434
APPROACH & TECHNOLOGY SOLUTION
1. GOOD RESERVOIR MANAGEMENT2. INNOVATIVE OPTIMUM DEVELOPMENT SCENARIO3. FIT FOR PURPOSE DRILLING AND PRODUCTION
TECHNOLOGY4. MINIMUM SURFACE FACILITY DESIGN5. JOINT FACILITIES & INFRASTRUCTURE CONCEPT
CHALLENGES IN THE DEVELOPMENT OF MARGINAL FIELDS
18
3535
INVESTMENT OPPORTUNITIESINVESTMENT OPPORTUNITIES
3636
INVESTMENT OPPORTUNITIES
PLENTY OF HYDROCARBON BASINS HAVE NOT BEEN EXPLORED.
POTENTIAL GEOLOGICAL PROSPECT STILL PROMISING. SIGNIFICANT NEW DISCOVERIES IN OLD PRODUCING AREAS, DEEP WATER AND REMOTE AREAS.
GAS RESERVES AS A RESULT OF EXPLORATION INCREASED SIGNIFICANTLY OVER THE LAST 5 YEARS.
HIGH SUCCESS RATIO ON EXPLORATION DRILLING.
AROUND US$ 19 BILLIONS HAVE ALLOCATED FOR ON GOING AND FUTURE E&P PROJECTS.
TO MAINTAIN THE PRODUCTION LEVEL THROUGHOUT INDONESIA NEED MORE TO DEVELOP POTENTIAL RESERVES.
19
3737
INVESTMENT OPPORTUNITIES(CONT…)
HUGE ENERGY MARKET AND GROWS RAPIDLY IN THE COUNTRY AS WELL AS IN THE WORLD.
INDONESIA’S GAS DOMESTIC DEMAND INCREASING. A TOTAL OF 1.5 BCFD SALES GAS AGREEMENT HAVE BEEN SIGNED DURING THE LAST 2 YEARS. EXPANSION AND PENETRATION TO NEW GAS PIPED AND LNG MARKETS.
SUBSIDY ON DOMESTIC PETROLEUM PRODUCTS PRICE WILL BE ROLED BACK.
STRATEGIC LOCATION OF INDONESIA IN THE CENTER OF GROWING CONSUMER REGIONS.
TO GIVE A LEGAL CERTAINTY GOVERNMENT ORDINANCE NO. 35 YEAR 2004 OF UPSTREAM OIL & GAS BUSINESS ACTIVITIES ENACTED TO PROVIDE MORE CONDUCIVE AND COMPETITIVE BUSINESS CLIMATE.
3838
MAINTAIN/IMPROVE PRODUCTION LEVEL
EXTENSIFICATION OFFERING NEW BLOCK - LATERALLY / VERTICALLY :
CONVENTIONAL AREADEEP WATER AREAFRONTIER AREA
INTENSIFICATION IMPROVING RECOVERY FACTOR OF PRODUCING OR SUSPENDED FIELD :
BROWNFIELDWORKOVERADDITIONAL PUMPGASLIFTEOR
MARGINALOLD WELL
DEVELOPMENT OF PROVED UNDEVELOPED RESERVES/LAYERS
20
3939
THANK YOU