The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) recorded 28 commercial agreements signed at the 2022 upstream oil and gas industry meeting in Nusa Dua, Bali in the past few days. Head of SKK Migas Dwi Soetjipto said the deal has the potential to provide revenue of around USD 2.3 billion or IDR 43.85 trillion (exchange rate of IDR 15,661 per US dollar). "Potential revenues reach USD 2.3 billion," said Head of SKK Migas Dwi Soetjipto as quoted from Antara, Friday (25/11).
He detailed that the agreement included 10 documents regarding the Election Not To Take in Kind (ENTIK) Procedure. ENTIK is an agreement that regulates the duties and responsibilities between SKK Migas and Cooperation Contract Contractors (KKKS) as sellers of the state's share of crude oil and condensate. In addition, there are 18 documents of the natural gas sale and purchase agreement (GSA), amendments to the PJBG, heads of agreement (HoA), memorandum of understanding (MoU) for pipeline gas, LNG and LPG. He estimated that the 28 agreements could generate potential lifting (sales) of oil and condensate of 265 thousand barrels of oil per day and an estimated total lifting of natural gas of 390 billion British thermal units (TBTU) with a contract duration spanning from two to 11 years. The signing of the contract, he said, would not only generate income, but also support national economic growth. Dwi added that all of the crude oil and condensate sold will be supplied for domestic needs. Part of the sold gas will be supplied to fertilizer and petrochemical factories in South Sumatra and Central Sulawesi, for industrial development in West Java, Central Java, East Java and Central Sulawesi, as well as electricity for PLN's needs. LPG from South Sumatra is planned to be entirely supplied for domestic needs. "This shows the upstream oil and gas commitment in maintaining national energy security," said Dwi.
Commercialization of oil and gas, especially natural gas, is one of the strategic pillars in supporting the achievement of SKK Migas' long-term vision with a production target of one million barrels of oil per day and natural gas of 12 billion cubic feet per day (BSCFD) in 2030. This production will be prioritized for buyers. domestic. Even so, the challenge faced is that domestic natural gas absorption tends to stagnate. SKK Migas noted that since 2012, the average growth in the use of natural gas by domestic buyers has reached one percent per year. This growth is lower than the national economic growth which reaches five percent per year. "Therefore, there needs to be a breakthrough from all parties to increase the need for domestic natural gas purchases," added Dwi.
