INDONESIA JAVA SECTION
www.spe.or.id JANUARY - MARCH 2017
AAnn EExclusivexclusive IInterviewnterview wwithith AArcandrarcandra TTaharahar EEnergynergy aandnd MMineralineral RResourcesesources DDeputyeputy MMinisterinister Advertisement Contents
Dear SPE Members;
SPE Java Section Newsletter is issued quarterly; they are printed 1,500 copies per issue, circulated among members, industry leaders, stakeholders (staff and manager), and students.
In order to improve the content of our Newsletter, we urge you to send us an article worth sharing to update and enrich our reader (at no cost to you), with application of certain technology, and/or CSR activity which made an impact on our industry. 2 Advertisement & Contents
We would also like to invite your Company to 3 A Word from the Chairman place an Advertorial, which serves as a showcase, at the same time to cover the cost of printing 4 News from Membership the Newsletter accordingly to the following fee structure with effect July 2012: 6 SPE Featured Column Printing Charges in USD Old Rate No. of Issue New Rate 8 Cover Story: Arcandra Tahar 385 1 400/issue Full page 2 375/issue = 750 13 APOGCE 2017 3 350/issue = 1,050 14 Interview: Nurman Djumiril 4 325/issue = 1,300 5 300/issue = 1,500 22 Interview: Tutuka Ariadji 6 275/issue = 1,650
Printing Charges in USD 26 Interview: Iwan Chandra Old Rate No. of Issue New Rate 31 IPA 2017 220 1 250/issue Half-a-page 2 235/issue = 470 32 Interview: Sacha Winzenried 3 210/issue = 630
4 200/issue = 800 36 Interview: Vijay Khrisnan 5 190/issue = 950 6 180/issue = 1,080 38 Technical Discussion Group
Note: 40 Distinguished Lecturer 1. Full page size is 21x28cm with format of .pdf or .jpg and resolution of 300 dpi. 42 UI SC 2. Article will be printed in Color only; paid article will also be displayed on our website, with the same duration. 44 ITB SC
For all advertising enquiries, please contact: 45 UNDIP SC William Ongseputra Secretary 47 UPN SC Email: [email protected] 55 Board of Directors Mega Section Officer Email: [email protected]
46th Floor Wisma Mulia Jl. Gatot Subroto No. 42 Jakarta 12710 Telp: +6221 294282222 Ext. 253 www.spe.or.id
2 SPE Java . Jan - Mar ‘17 A WordWord fromfrom thethe CCHAIRMANHAIRMAN
ear Members and Readers,
FirstD of all I would like to use this opportunity to thank Mr. ideas that might help our readers to develop their knowledge Hasbi Lubis, previous chairman of the SPE Java Section, for his of the oil and gas industry. excellent leadership, enthusiasm, energy and all the time he invested to drive our section over the last one and half years. We also feature our 2016-2017 SPE President, Mrs. Janeen Also the overall team and the student chapters did a great job. Judah, who paid a courtesy visit to SKKMigas and Pertamina Thanks to all of you! Corporate during her trip to Indonesia. She always conveyed her thanks and gratitude’s to all parties in Indonesia, including The industry downturn that we are facing today has created a the universities for their continuing support. She updated the new equilibrium that is often being discussed by students and SPE International mission and information on the next APOGCE young professionals more frequently than by their more senior event in October 2017. She also visited the UI Campus in colleagues, who probably are betting for Depok and ITB Campus in Bandung. a quick turnaround soon to close their careers. Students and recent graduates WeWe eencouragencourage sstudentstudents In April, we held our ever-popular and need to be reassured about their study andand youngyoung professionalsprofessionals always-full SPE Golf Tournament. Thanks and career choice for the next 30-40 toto broadenbroaden theirtheir skillsskills to Brad Sincock, Bob Shearer and their years. They can no longer “trust” this andand knowledgeknowledge bbasease team for their flawless planning and once lucrative industry with the same execution of this valuable event to raise approach as earlier generations. In funds for our SPE student activities and many of our articles and interviews with industry leaders, Scholarship Program. A full report will follow in a future edition we encourage students and young professionals to broaden of our magazine. their skills and knowledge base, from petroleum to the wider scope of energy. We believe that an up cycle will come to our I would like to extend our appreciations to all dedicated industry, and so the future is still bright. volunteers and members for giving their valuable time and thoughts to make the Java Section bigger and better. In this edition, we interview Pak Arcandra Tahar (Deputy Minister for Energy and Mineral Resources) who lists the Warmest Regards, government’s top priorities for the industry, and shares Amin Hartoni the story behind Gross-Split. We also interview five other Chairman 2016-2017 prominent leaders who shared their stories, experiences and
SPE Java . JAN - MAR ‘17 3 SSPEPE JavaJava MMembershipembership IInformationnformation fforor FirstFirst QQuarteruarter 22017017
Dear SPE Java Members, Please see on the next page showing the SPE Java Membership Category 2 which INDONESIA is). This is USD10 per year and Database information as per end of First Quarter 2017. Our year includes everything exactly the same for your SPE membership, to date figures show our Professionals Members at 409 and except only ONLINE JPT, instead of the usual HARDCOPY JPT by Student Members at 2,752. mail. This offer is limited globally. If you haven’t renewed your membership as yet, please consider this option when renewing. As part of SPE Java Indonesia you are a vital part of an active, If you still want the usual SPE membership it is USD 50 per year global network, with 164,936 total members in 143 countries. in INDONESIA and includes hardcopy of JPT in the mail. In Asia Pacific Professional Membership comprises 15% and Student Membership 28%. Your SPE membership offers a Renewal is easy and can be done from the main SPE site, spe. growing list of professional development resources, from org. You can pay by your credit card. technical publications, training courses, and workshops, to conferences, forums and online communities – all available at Please follow the link as below for renewal, www.spe.org http://www.spe.org/join/renew
We still have a large portion of our members who are lapsed, i.e. Best regards, not renewed their SPE membership to date. We know that times are hard in the Oil and Gas Industry. We look forward to business Steven Broadmeadow improving. As an incentive to renew, please be advised that SPE Cessy Bellafania has an option of e-MEMBERSHIP (only available for Country in
e-MEMBERSHIPe-MEMBERSHIP USDUSD 1010 perper yyearear includesincludes everythingeverything thethe samesame exceptexcept oonlynly ONLINEONLINE JPTJPT
4 SPEPE JavaJava . JJanann - MMarar ‘‘1717 -DYD,QGRQHVLD6HFWLRQ 6HFWLRQ 5HJLRQDO'LUHFWRU 5HSRUWDVRI 0DUFK &KDUWVGRQRWLQFOXGHDIILOLDWHPHPEHUV 0HPEHUVKLSE\(PSOR\HU 2QO\6KRZQ 0HPEHUV 3HUFHQWRI7RWDO 8QGLVFORVHG 6FKOXPEHUJHU 373HUWDPLQD+XOX(QHUJL21:- %DQGXQJ,QVWRI7HFK 373HUWDPLQD(3 373LSD0DV3XWLK 6..0LJDV 9,&2,QGRQHVLD 3(57$0,1$ 3HUWDPLQD+XOX(QHUJL:02 &KHYURQ,QGRQHVLD&R &&RQRFR3KLOOLSV,QGRQHVLD,QF 3KLOOL , G L , 5HFHQW*UDGXDWHV 0HPEHUVKLS6WDWXV &RXQW &XUUHQW /DSVHG *Recent Graduates are professional members who graduated within the last year. 7RWDO 6WXGHQW&KDSWHUV &XUUHQW 1HZ 5HQHZHG /DSVHG 0HPEHUV %DQGXQJ,QVWLWXWHRI7HFKQRORJ\ *DGMDK0DGD8QLYHUVLW\ ,QVWLWXW7HNQRORJL6HSXOXK 1RSHPEHU ,76 3DGMDGMDUDQ8QLYHUVLW\ 7ULVDNWL8QLYHUVLW\ 8QLYHUVLWDV'LSRQHJRUR 8QLYHUVLWDV,QGRQHVLD 8319HWHUDQ Total count may be less than total number of students if a student has not provided an expected graduationg date. SPE Java . JAN - MAR ‘17 5 SPE Featured Column ACCOUNTABILITY IN THE AGE OF THE DIGITAL OILFIELD n recent days, I came of Accountability comes up, as whenever across a discussion in there is trouble in the Field, the Office the Online HSE Forum blames the Field and the Field Blames Iin the SPE, where the the Office, in essence, nothing to be Human Factors surrounding surprised about, people will always push Decision Making and the Blame away from themselves and on to Organizational Structure some other individual. in modern day Oilfield Operations was the main What I find surprising is that these old topic. prejudices from the times when I started out working in the oilfield, some almost The discussion centered 40 years ago still persist well into the 21st on the seemingly Century, in the middle of the Digital Age. unsurmountable divide between Front Line Operations – aka “The Field” – and the “Office” or like the author called it, “The Support ...... waswas nono didiff erenceerence Back Office”. betweenbetween FieldField PersonnelPersonnel andand Historically, in the Oilfield Offi cece BBasedased PPersonnelersonnel there has always existed becausebecause a certain level of disdain theythey aallll workedworked on the side of the “Field sideside byby sside,ide, Personnel” sharingsharing thethe load,load, towards thethe responsibilityresponsibility the office Folks, andand allall havinghaving a sharedshared essentially because sensesense ooff AccountabilityAccountability the office people are perceived to rarely if ever show up to do real work at the This is a complex problem that has a lot Field Site and to do with the quality and the culture are generally of the Executive Leadership within the regarded companies. This is not just a problem to be living in in Oil & Gas Companies, big and small, an “Imaginary but also prevalent in Service Companies World” devoid of as well as Drilling Contractors; not to contact with reality or mention many other industries. the “Real World” of the Field sites. We all have been told that the Digital Age, with its Fast Connectivity, Internet, Immediately the issue and Mobile Communications would 6 SPE Java . Jan - Mar ‘17 help alleviate the pains of effective and understanding what the other does, foster such level of cooperation. communication and sharing of critical this is where Accountability falls through information. Yes, we all enjoy the benefits the gaps. Now, people will say that Germany has of all these wonderful technological tools, a strong culture of discipline and hard but somehow, the deep divide between The prevailing organizational culture has work, and that conditions in the field are the Office and the Field survives today. “The Support Back Office” taking all the ideal as are the levels of comfort available decisions that the field then has to live to all, thus rendering the effort so much So we can’t argue that our ability to with and try to translate into practical easier. communicate and work seamlessly as reality, but the ultimate accountability Teams is not dependent on the quality being split almost equally between Then there are others who will argue the of our technological tools (or toys, the Field Supervisor and the Drilling eternal battle of limitations to the number depending on whose perspective we may Operations manager in town, with all of people that can be accommodated embrace) but is a direct consequence the rest of the links in the chain having in an Offshore Field Site plus the Safety of the Organizational Cultural Bias that little if any responsibility and even less Requirements imposed on visitors as companies are subject to. accountability for the outcomes of their being almost unsurmountable limitations work and decisions. to achieve such Team Work. 40 years ago it was accepted as conventional wisdom that engineers were The people discussing this dilemma in But in my little tale, we were only four worthless working in the field, and I had the HSE Forum, rightly so classified this Office folk going to the work sites to work really hard to demonstrate that problem as one of Behavior or a so called in Germany, not entire platoons of in spite of being a lowly engineer, I was Human Factor and they pointed out the engineers and supervisors from town. capable of doing the same work as any need of fixing it. Now, the issue of how The key was that the person in town that seasoned hand in the field. This meant to go about fixing this problem has many was accountable for the project would not being afraid of doing hard and heavy elements, but it boils down to what kind always be part of that delegation of four manual tasks, getting really dirty, working of Management Style an organization will people. long hours and keeping even longer duty embrace. shifts, only to gain some respect from We had e-mail and internet in those field people and later being able to show Let me cite an example of what I witnessed days already, as well as mobile phone there are better and smarter ways to get during my formative years: communications, so information the job done. exchanges were just as easy then as they Some 2 decades ago, I was working as part are today. Today, the general perception is that of a team doing well construction work the industry can’t afford to send green in Germany, here the Field guys and the What we need to overcome is our engineers to do the manual and physical Office folks worked as a seamless TEAM, reluctance to taking that one extra step tasks required of the Field Work (yes, in everyone respecting and valuing each in commitment, to make sure the Field spite of all that automation, there is still other’s work. So how did this happen? It people are not left high and dry by Office a considerable amount of physical work was really simple: every critical task that based colleagues who would rather spend to be done in our Industry), because of had to be carried out in the Field was first the night in their comfortable bed at home the fear of the consequences resulting meticulously studied and planned in the instead of out at the Field site where they from a possible injury sustained by any of office, where the Drilling Superintendent may have to spend a sleepless night in these youngsters while they do get that was an engineer who had spent some the rain or in the cold, or sweating while experience. So, today, the industry avoids 10 years in the field before moving to doing what is an essential component of at all costs having young professionals the office and who never forgot how to their jobs: helping the people in the field get the experience and flavor of the translate brilliant engineering ideas into put into practice their plans and solve the profession that can only be obtained by practical reality. problems arising from the design facing sharing in these heavy and hard manual the limitations of reality. tasks. The other thing that happened was that the Office Folks would go out to the This can only happen when all parties are The other outcome is, that the young Field site, before the critical task was to held accountable to the outcome of their Engineers and other graduates from be carried out, so that both Office and decisions, as well as benefiting from the oilfield related professions are robbed Field personnel worked side by side at positive outcome of a job well done. of the invaluable opportunity to learn the Field Location to prepare and execute from their Field Peers and to forge that particular task until it was completed relationships and develop empathy so with a satisfactory outcome. necessary for the time when they become Leaders and Managers. The fundamental fact was that there was no difference between Field Personnel What the industry does is perpetuating and Office Based Personnel because they over and over these prejudices and all worked side by side, sharing the load, contributing to the lack of understanding the responsibility and all having a shared of each other’s roles. When this is sense of Accountability. combined with the traditional Silo Organization, where the organization is So it can be done, the animosity can be compartmentalized with each discipline overcome. All that is needed is that level just doing their part and not collaborating of extra commitment by management to SSPEPE JJavaava . JJANAN - MMARAR ‘‘1717 7 Cover Story 8 SPESSPPPEE JavaJJaavvaa .J. JJananan -M- MMararar ‘‘1‘171717 rcandra Tahar was born in 1970. He completed his undergraduate degree and fairness every day, then one day I will of Mechanical Engineering at Institut Teknologi Bandung. After a short become numb to what they mean. That’s stint at Andersen Consulting, he continued his Master, and then Doctoral why I try to be fair every day, even for the Adegree on Ocean Engineering, at Texas A&M University. He has a very interesting easiest cases. career, mostly in US, as both researcher/advisor and entrepreneur, from Technical Advisor of Noble Denton, Technip and Hydrodynamics Lead FloaTec, to Principal One day, I said that only God knows exactly and President at AGR Deepwater Development System, Horton Wison Deepwater, what’s down there, and Bu Sri Mulyani and the latest as President of Petroneering before summoned back to Indonesia. protested. What I meant is that humans have science to pursue our interest down Together with Ignasius Jonan, he runs the office of Ministry of ESDM as an open public there. However, science is limited - we office, spending his available time hearing and meeting with various stakeholders know only so much. I received a text in the industry. SPE Java is truly honoured to have this interesting session with him. message accusing me of harassing the professions of geophysics, petrophysics, Pak Arcandra, Pak President tapped key performance indicator to maximize reservoir engineering and petroleum you on your shoulder. It’s not an tax revenue. Such a key performance engineering because I said we didn’t accident that he chose you. Why? indicator is logical for tax people. Whereas know exactly what’s down there. Well, I for us, to attract investors, we must lighten hold my remark. What is the concept to Honestly, I don’t know. I feel grateful taxes in the beginning, which means less calculate reserves? P10, P50, P90. What that I’m alive and have been given this tax revenue. What should we do, then? does the P mean? My challenge to the mandate. I never dreamt to become what industry is don’t get numb from deserting I am right now. Even seconds from now, I The private sector does not face this our sense of honesty and integrity. If we don’t know what’s going to happen. That situation. The aim of all is to increase are not honest now, we will be numb later. is time: a series of events that lead us to production. Many parties are involved a destination. But you never know what in the process, and generally they are all What is your preferred approach - cut- event leads to what destination. Even for aligned with our aim. down the number of processes or make the inauguration, I came straight from the the existing processes more efficient? hotel by taxi with no Rupiah in my pocket to pay my taxi. Anyhow, I’m grateful that Both. For the first approach, say to drill a my destiny right now is here. well we need 20 permits. I ask to make it 10 permits “Yes, we can make it 10.” Next On a personal level, as Muslim, there are question “Do we have 10 permits because values that we have to honour. I stick to you cut-out unnecessary processes or my principles of justice and fairness. No The second difference relates to a dream because you combined the processes?” matter what and where we are, what in my past. I thought our bureaucracy was If you combine permits, the business goodness can we contribute once a day? very slow, and business processes took processes remain the same, and this We have to exercise this every day, or else too long. I criticized the government. Now doesn’t help at all. we will get numb. Where that will lead us? I am inside and I have to face it and fix it. It is not your problem. Just commit with The question is how? For the second approach, my philosophy what you believe in. is to minimize human interaction. In We know the way. Bureaucracy is a big oil and gas and Minerba (mineral and Your background is an entrepreneur. machine, and driving this machine takes coal), the moral hazard lies in licensing Now you are a bureaucrat. How do you lots of energy. Our role is to reduce the processes that include human interaction. see Indonesian oil and gas issues from energy required by cutting out nonsense I visited Minerba to see how many the other side? (as long as it is within our control). business processes were required. I saw the counters and chairs with waiting Culture is the biggest difference. In I want a “makes-sense” economy, so I cut permit applicants. They said they would industry, our key performance indicator is out the “nonsense”. refine it. I said no, we must eliminate all how much you deliver in one day, week, the chairs and counters and go online. month or year. Now we debate what makes sense. In almost every meeting, I encounter debate Someday, we will bring all processes In the bureaucracy, we focus on now - between 2 to 3 different interests that online. I have experience in the US with the what is available and what are our needs. never find a common solution. Some of online process to get a patent. It takes 3 We have a plan, we organize it, and then these debates have gone on for years. Yet, to 5 years to prove that my idea is original, we execute it. the solution is simple; see the process and but at any time I know the progress of my make a decision based on a make-sense application, what additional documents Sounds simple, but it is not, because this economy. are needed, what proof I need. That’s plan relies on many parties over which my dream for Indonesia. You submit the we have no control. Take Government My jargon is “Justice and Fairness for document and fee online with zero human Regulation 79 (GR79). ESDM wanted GR79 Everybody”, be they SKKMIGAS or PSC interaction. Later, you know exactly what to excite exploration and exploitation contractors. I don’t care. I must not take step you document has reached with just activities. But taxation took over, with their sides. Why? If I don’t practice honesty one click. SPE Java . JAN - MAR ‘‘1717 9 What is your priority for the next 5 Only time can answer that. Competence is For PSC’s with first time continuation (10 years? divided into 3 things, namely knowledge, years + 20 years), to be fair, we usually skill, and experience. If you have no job, continue their contracts. For exploration Until now, our priority has been writing that means you lack skill and experience. you have only 10 years. Then from ministerial regulations that will hopefully However, if you are still young, you have discovery to first oil takes on average more be useful for the future. We signed 12- time to increase your knowledge. Further than 15 years. So you only have 5 years 15 ministerial decrees in one month. your study by taking a S2 (magister) left to produce. Recovering depreciation What are our key problems? Permits, and S3 (doctorate). This is the time to takes 5 years and for some 10 years. I was overlapping land-use and unnecessary go back to school. Second is skill. Just on the business side before so I know the local regulations that burden investors. because Indonesia is declining in terms meaning of rate-of-return and NPV. So if We are not talking about difficult issues in of exploration, it doesn’t mean you have their capital has not fully returned, then technology, engineering or commercial - to give up. No! There’s an old saying the government cannot (without reason) only administration. that “Dunia tidak seluas daun kelor” (The take the PSC and give it to Pertamina. This world is not as big as a moringa leaf). Go would be a nonsense economy. To make So, what’s the solution? beyond Indonesia; compete with others. sense, we continue the contract. It is competition that makes us adult. We will give to local government a Don’t expect your job to necessarily be It is different for PSC’s that are already 50 Participating Interest (PI) of 10%. They in Indonesia. You don’t have to get the years old (10 years + 20 years + 20 years). ask “Do we need to pay something?” No. skill in Indonesia. We can get skills and Mahakam is one example. You have “Do we need to pay interest?” No. They knowledge from anywhere. Google is a stayed there for 50 years and depreciation wonder why the central government is source of all kinds of knowledge, both of your major development capex has so kind. I say “If you want to be useful, bad and good. But, is that enough? No. long been returned. Yes, later capex for you have to participate, but initially not That’s why (until now) we only know 1/3 maintenance and small projects is left as operator because oil and gas has tight of the knowledge. Go see the world. Go behind, and we are considering that. Look rules. So to start, your role is to remove find skills everywhere. And work to build at ONWJ, after 50 years we terminated the unnecessary local permits. If you don’t, your experience. PSC and took it back. Fortunately, it was production will be delayed as will your easy as the Operator went from Pertamina payments. Everybody knows the bicycle. If you to Pertamina. Now we have termination of never rode a bike before, you will fall. If the Makaham PSC. We asked Pertamina As background, why do local governments you don’t have skills, don’t get stuck in whether or not they can manage this block publish unnecessary local regulations? To Indonesia, go to other places in the world. and guarantee increased production. If generate revenue because they feel that There are many of them. If you are already Pertamina cannot manage it, we’ll give it their natural wealth has been taken with good at riding a bike, go join the Tour de to another company. no benefit for them. But now they get France; that’s what experience is. But then, 10% of the project. why you cannot compete with others? Second, even though we give it to It means you cannot race. Should you Pertamina, we encourage them to Second, regulations that you do need blame the coach? Not quite. Or should cooperate with the existing partner. We must not be onerous. Please ensure that you blame the Ketua RT for not giving the wrote in the letter please cooperate with the DPRD does not pass local regulations racing arena? the existing partner. that burden investors. Fix things that make investors feel uncomfortable. That’s The message is go back to school. There Are Indonesian contracts too short? How the key. is light at the end of the tunnel. If we about contract periods in other countries? continue our study abroad, there’s an Are they like us? Yes. Some, like Norway A carried PI of 10% means the local opportunity to interact with people that have shorter contracts than us if I’m not government does not have to find money probably will lead the way to get the job. mistaken. to buy the interest. This is an important After you get enough skill and experience improvement, because previously, they abroad, come back to Indonesia. Eight more companies will soon have would pawn the interest to a third party, their contracts terminated. They which is against the spirit of the PI and Indonesia oil and gas industry is like a harvest because there is not enough doesn’t help anybody. restaurant now left by its customers. time to recover depreciation. How can Those that stay are also asked to we encourage investment until the last Maybe in the short term, investors will be move by giving back expired PC to day? angry to lose 10% of their projects. But in Pertamina. Then, there is a new menu the longer term we expect to see a win- in the rsestaurant called the Gross Split. We want contractors to keep investing win solution. Will it work? Time will tell, How will you do to retain old customers until the second the contract expires. When but at least there’s hope. and bring new ones? there is a contractor replacement, there will be costs that have not been returned. Speaking of the future, our student It would be wrong to give everything These are legitimate costs, because they members often ask is there a future back to Pertamina. Fairness and justice for increase production or at least hold the for them in the petroleum industry in everybody, remember? decline rate. But we will not restore these Indonesia? costs by accelerated depreciation. They will 10 SPE Java . Jan - Mar ‘‘1717 be replaced through normal depreciation just like you. So, let’s talk. If you have a the involved parties. For issues relating to to the contractor that will take over the concern afterward, you missed the bus.” taxes, we invited the tax people, and so block. The new contractor benefits from on. I can show you a register of questions production resulting from these costs, so We debated what is a healthy rate-of- and answers for all issues on Gross Split. to be fair, they have to reimburse these return: 15% or 30%? In oil and gas, 30% costs to the previous contractor. We are is not healthy for the government or the I say “if you didn’t get involved, and don’t still discussing how to do it. Contractor. Contractors who are too strong know the process of how we came up with or too comfortable are not good because the Gross Split, please keep silent”. If you Everyone is talking about Gross Split. one virus attack and you collapse. You are want to know, then come and talk to me What was the rationale for Gross Split? not tough enough. You need toughness in night or day; I know exactly what’s going this business. Sometimes you will get only on. With Cost Recovery, the oil split is 85/15. 8% or 10%, and sometimes 30%. That’s Where does the number come from? Why our business, it is all about portfolios and Will all terminations and continuations is it not 86/14. Why is gas 70/30? risk management. be Gross Split? With Gross Split, you know exactly the Everybody was welcome to challenge For terminations and new contracts, you answer. You have CO2? You are in a the proposed Gross Split scheme before don’t have any choice but Gross Split. remote area? You can see yourself what signing by the minister. That was clear. However, for continuations, you can pick split you are going to get. There is a But challenge it after signing and you are either Gross Split or Cost Recovery. That rationale. That is the uniqueness of our late. Even the World Bank asked me what makes sense, because you know the data, Gross Split. Other countries have systems was the idea, how about the economic right? called Gross Split, but they is different - modeling, and how is the behavior at same menu, but different taste. different scales? We invited their expert People say that Gross Split seems less from Singapore. “When do you need to attractive for exploration... During our Gross Split deliberations, we publish the Gross Split?”. “Mid-January”. invited many parties. I told the industry “Oh we cannot, our economic model is Please write this properly. What stakeholders and organizations as well as not in Indonesia yet”. By the third week of differentiates exploration in a others, “anyone who comes here, you are January they were finally here “We missed conventional PSC and a Gross Split? There the decision maker. I don’t want you to go the train, didn’t we?”. “Yes, and that is is no difference, their tax systems and back.” They said “Let’s wait. I’m going to your fault. I gave you the chance.” incentives from fiscal terms are similar. talk to my boss about whether the terms are okay or not”. I said “No, I’m not going Now, the government has finished talking What can Indonesia do to attract new to entertain any second thoughts” I don’t and is implementing Gross Split. Try it oil and gas investors? care if the participant is a manager, a vice first. We are open for discussion if Gross president, a president or just an engineer. Split doesn’t work, but give it time. New investors are continually looking at I am not a Deputy Minister in this meeting; us. Like restaurant customers, they come when we talk technical, I am an engineer We have registered all issues raised by in and ask for a menu. They are hungry. SPE Java . JAN - MAR ‘‘1717 11 But the menu took too long to come. So, So, this is what we call a new menu. the World Bank, and collect later from we changed the Chef to make a quick and However, the customer must have the Pertamina and EMP? Will they want delicious menu. desire. In the United States, there is a such levies? Or we will take it from the restaurant where you cook your own food. government take? It doesn’t make sense. Is it really delicious? Only time will tell. Be careful though, because your food may Gas prices are coming down. What is When we created Gross Split, we didn’t taste awful if you add the wrong spices. the background? know whether it will work or not. But There is a freedom, but remember if you we used our common sense; the United mix it wrong it may taste awful. I was surprised to learn that pipeline States is mainly Gross Split. Why? Because gas prices increase linearly. What is the the easiest thing in oil and gas is looking If SKK Migas is the old Chef, what will logic? It means the energy price always at the sales meter. With Gross Split, the become of this old Chef? goes up for the customer and that is a government looks at the meter. The problem right now. If the pipeline price contractor is free to do anything as long We will still use SKK Migas for the Work always goes up but the LNG price swings as it does not break the reservoir - the Program. Why? Today, we have the ability up and down, when they cross, buyers of work program is still under SKK Migas. to extract at most 50% of the oil down pipeline gas scream “why is pipeline gas there. So we must protect the reservoir. so expensive compared to LNG? “. And of course, our loyal customers We must not be reckless, because perhaps want to stay, yet their contracts will one day our children and grandchildren You worked in the USA, where soon be terminated. They need positive will have the technology to take the other production data is available online. guidance. 50%. We will maintain our reservoirs I can see the performance of my through the Work Program. That is the neighbor’s wells, so I can avoid trial We are thinking about this right now. We role of SKK; their debate is a technological and error and become more efficient. hear of the reality in the field from our debate. Is there any thought in Indonesia to contractor’s complaints. How to make centralize data bases and make them a revised oil and gas law close the gap? For exploration, can we remove available online? At the beginning the gap may not be disincentives such as poor infrastructure 100% closed, but at least we can narrow and local permits? The answer is yes, we are working on that down the gap. For revision of the law, the as part of a holistic approach to facilitate initiative has to be from the DPR. So we Good, we are on the same page. Now, development. This is a technology/ wait for that. how to solve it? We have local autonomy. technical issue that when solved will avoid Can the central government control local us spending our time on administrative I believe time will prove that Gross regulations? No, we cannot. That’s why we issues. It doesn’t cost much. It’s doable. Split, with its independent procurement push the PI of 10%. Hopefully PI becomes system, will overcome our administrative a cure, a hope. Back to permits. In Texas, a permit for problems, such as slow contract and drilling takes two weeks, so out there, permits, Why do we give procurement Otherwise, we need to change our people are thinking about how to get to the contractors? Look at the current constitutional system and control all more production from existing wells, and situation. What is the fee to apply to SKK regulations centrally. This is barking up how to develop fields more efficiently Migas? How long does it take? 6 months? the wrong tree. I’m open for all ideas, but by looking the data from your neighbor. 1 year? How much does it cost to go back they have to be practical. Here, how long does permitting take? We and forth to SKK Migas, to retain an office talk about how to get a permit from the with 20 people? Add all that into your Are people not exploring because of governor. Believe me; it doesn’t help to cashflow. You want A, but SKK Migas says taxes? increase the production. you need B. How can this be efficient? Not anymore. Such things are gone There’s a lot of support for you out Who knows the contractor’s needs is the now. An oil company has to start with there, Pak Arcandra. From the outside, contractor himself. With Gross Split, the exploration. What else can we give? you and Pak Jonan are like the good contractor can source any equipment, What kind of incentive? Is it access to cop and bad cop. and all equipment from abroad, say from information or data? Exploration means China because they are cheaper. So we you have to create your own data. No, that is not true. We are on the same added a 4% incentive for local content. team. We discuss a lot and exchange ideas Say revenue over 20 years is $30 billion, What about funding exploration via a about how to improve our bureaucracy. you receive extra cash of $1.2 billion. That petroleum fund? I always say that this is not my office, this is a huge number. If the price gap is $1.2 is the people’s’ office. I am a temporary billion, go ahead; but I’m not sure it is. No way. What will be the source of resident. So, please, everybody is This will drive local companies will give money for the petroleum fund? It cannot welcome. This is your office. the best with the least cost. come from the APBN (state budget). Will somebody sincerely say “I am going We will come again. Thank you Pak Let’s get back to to 1970’s when field to provide $1 billion. Please spend it on Arcandra for your time. developments took less than 5 years. exploration?” Should we take it from 1212 SPE Java . Jan - Mar ‘‘1717 APOGCE SPE Java . JAN - MAR ‘17 13 Interview with NNurmanurman DDjumiriljumiril Former VP General Counsel and External Relations at Total 144 SPESSPPEPE JavaJJaavava . JJananan --M MMararar ‘1‘17‘1177 ak Nurman, thank you for to develop geothermal resource in 1971. Each decree comprised no more spending time with us. Maybe Indonesia as it did in the Philippines. than 5 pages. They were concise and you can start by telling our clear, and undisputed. That’s all what Pmembers about yourself. A legal framework had to be set before investors need, right? Clarity, consistency Unocal signed the JOC. As a greenhorn, I and conformity; the “three C’s”. Okay, thank you. It’s an honor for me to was tasked to run back and forth between be covered by this prestigious magazine. Pertamina, ministry of Energy and the As demand for energy grew, due to PLN’s By way of introduction, I am a father of Secretary of State on this framework. At limited funding capability, Unocal was three boys from my wife of 35 years; my that time, Pak Habibie as an expert staff asked if it was interested to generate eldest son passed away almost three in research and technology for President electricity as well from the energy years ago due to congenital anomalies Soeharto was instrumental in laying produced from the geothermal resource, that prevented him from growing up the foundation along with pa Wiyarso but funding for construction (of the as a normal boy. We were blessed one time Director General of Migas. power plant) would be at Unocal’s risk. to be able to be with him for 31 years. The framework was PD22 and PD 23 of My wife discontinued a professional 1981, each document comprised of no Unlike multinationals such as Exxon, BP, career to attend to our son due to his more than 5 pages. They were concise, Shell or Total, Unocal required external handicap. Our second son is a graduate clear and consistent. The three “C”s is financing to support such a project. from the school of Economy at University what investors need. The Joint Operation Having had experience in LNG project of Indonesia with a post graduate Contract (JOC), had a different structure financing for several trains in Bontang, degree in finance from the University than PSC, albeit the resource in the hands I was able to contribute a role for this of Amsterdam; he is now with Ernst & of Pertamina just like under a PSC. The purpose. Unocal’s original proposed Young. My third and youngest is a civil JOC assigned Unocal as the Operator with structure for geothermal financing engineer from the Technical Faculty of Pertamina as holder of the authority to was unlike conventional financing. As the University of Indonesia and recently undertake exploration and exploitation of one with a simple mind my ability for graduated his master’s program in oil & geothermal energy resources. Under the a complex structure is limited. So, I gas management from the University of asked Corporate in Los Angeles “why Aberdeen; he is now with Itochu. I am do we have to re-invent the wheel?” If proud to say that my wife and I and two an entirely new structure is introduced, sons all are UI graduates. I’m a seasoned WhenWhen thethe governmentgovernment the first reaction is usually resistance. professional with 35 years’ experience in introducedintroduced However, if we approach with something the extraction industry, most of which thethe MiningMining LawLaw No.4/2009,No.4/2009, that the government is already familiar over 30 years was spent in the oil & gas respectrespect ooff ccontractontract sancsanc tyty with, there would be less resistance. So, sector; three of which was spent as Board becamebecame qquesues onableonable I said, “Why don’t we propose the LNG member of Jakarta listed company, project financing structure, which was a PT INCO tbk. I retired from Total E&P Trustee Borrowing Scheme, a mechanism Indonesie in January 2016 as VP General that mitigates the operator’s risk and Counsel and External Relations. By Energy Sales Contract (ESC) Pertamina generate the expected return?” training, I’m a lawyer but never practiced Pertamkina was as authority to dispose law or appeared before the court. Why I of the energy to PLN with Unocal acting Eventually this trustee borrowing scheme didn’t pursue that profession is another as Supplier of energy to Pertamina. was accepted by all parties that laid to the story. PLN’s obligation to the energy supplier foundation of the first private geothermal was guaranteed by the Government development project financing. During My career began fortuitously. When I was accompanied by a decision by the that time I was assigned in California, so completing my final thesis, my dean called Monetary Board chaired by the Minister I shuttled back and forth to Jakarta to and told me that there was a company of Finance to allow repatriation of funds meet with Pertamina, the Department scouting for talent and if I was interested by the Energy supplier; this structure gave of Finance and related parties. Project I could meet with them. They turned out clear certainty that led to the foundation finance was finally arranged in 1996 with to be Unocal (Union Oil back then) that of geothermal undertaking. Dayabumi Salak Pratama, Ltd established eventually led me to be accepted as a as the Trustee Borrower and fiscal terms fresh graduate. Supporting this structure were only three governed under PD 49 of 1995. Unocal is an independent that had legal instruments namely, Presidential concessions in oil and gas blocks in Decree No.22/1981 describing the Indonesia has huge potential for Indonesia; in 1982 which was about undertaking of geothermal undertaking, geothermal. Why are few companies my second year, Unocal ventured into Presidential Decree No.23/1981 describing interested to participate? geothermal at Gunung Salak. This the fiscal terms and a Decree from the introduced the first Joint Operation Monetary Board allowing expatriation of There is only one buyer of electricity Contract (JOC) after Unocal responded funds without interference. The principal generated (from geothermal steam), favorably to the government’s invitation foundation was the Pertamina Law # 8 of namely PLN. As a state utility, PLN is SPE Java . JAN - MAR ‘‘1717 15 constrained in determining the price of electricity based on market price. This inability is overcome by the determination of the sales price by the government eventually leading to PLN’s obligation (to the energy/electricity supplier) guaranteed by the government. When the IMF bailed Indonesia out of the monetary crisis of 1997, a letter of intent was negotiated between IMF and Indonesia. The letter among others included certain changes to be made to commitments in the energy sector that the government already undertook. The letter distinguished these conditions under three categories; first, existing This shocked Indonesia. You see, in those the license from the Pemda, which led to viable contracts would to be continued. days Pertamina held the authority to new problems. In the light of questions Second, contracts that were less feasible undertake exploration and exploitation, and uncertainties, Investors were insecure under the circumstances would allowed for oil, gas and geothermal based on of the investment that resulted in no to be continued at a later date after law # 8/1971. All funds from sales of investors securing a geothermal license subsequent consideration. And third, LNG went into Pertamina’s account in from a Pemda. The then Presidential contracts that need to be terminated as New York. Caithness Power eventually Decree # 37 regarding Independent it would be burdensome for the State’s managed to garnish Pertamina’s account Power Producers (IPP) eventually was economy. in New York based on the arbitral award also revoked, which increased the risk for in their favor; Indonesia had no option investment. Hence the lack of interest in A single Presidential Decree underwent but to honor the award. geothermal undertaking. revision three times within a week as the IMF team negotiating the letter of intent Those unfamiliar with the contract blamed Around three years ago, the Geothermal were not fully exposed to the progress of the contract structure arguing that it gave Law was revised and returned authority to those projects under review. Actually, it Indonesia a weak position against foreign the central government. But geothermal was not the content of the Decree that undertaking remains torpid. Despite raised concerns, but the attachment the new law, no investor has shown that listed those contracts in the three interest. Chevron has disposed of their categories. Chevron (Amoseas back ….once….once youyou drinkdrink waterwater assets in Darajat and Gunung Salak. It is then) and Unocal’s contracts in Gunung fromfrom thethe Mahakam,Mahakam, yyouou wwillill unclear if this is because of the regulatory Darajat and Gunung Salak were among oneone dayday returnreturn environment or the state of the investor’s those that were allowed to be continued toto thethe MahakamMahakam riverriver confidence in the investment climate or because activities had been running. the state of the world’s economy. Unocal’s Caithness’ Karaha Bodas Contract was asset in Sarulla, taken over by Supreme, among the contracts that were to be has not progressed significantly, although postponed. Unocal’s new contract for it has been running for more than 20 electricity generation was originally to be investors. This actually is not the cause. years. However, to date Supreme appear postponed, however since commitments The government’s failure to honor its to be the only company that ventures in have already been secured for the guarantee was due to the constraints laid geothermal undertaking post the Salak project financing and construction, the out in the Letter of Intent signed with the and Daradjat develepments. construction for Salak’s three units were IMF. In my opinion as a lawyer, Indonesia allowed to continue. This was not the should have had a chance to argue that Speaking of investment risk, decisions are case for Caithness’ Karaha Bodas as it its ability to honor the guarantee was taken based on the balance of regulatory had not had its proposed POD approved. restrained by the terms of the Letter of risk and geological risk. In terms of Since their contract was delayed, Karaha Intent it signed with the IMF. geological risk, investors apply technology Bodas sued the government for unilateral based on continued research and cancellation of the contract, in spite Later, the Government enacted a development for continued improvement of having committed its exploration Geothermal Law, which ruled that the to mitigate the challenge. But, in terms of expenditure. Arguing as a unilateral authority for geothermal activities regulatory risk, investors cannot intervene appropriation, they brought their case to was no longer under purview of the with the State’s sovereign authority. International Arbitration and eventually Central Government, but under the local Displeasure or constructive feedback can secured an award in their favor. authority (Pemerintah daerah or Pemda). be expressed, but investors cannot insist. Based on this law, investors had to secure Once these two risks are in balance; then 1616 SPE Java . Jan - Mar ‘‘1717 an opportunity to make a deal is open. Unocal was an independent company so I my appointment by then Minister of was very fortunate to be able to advance Energy as government task force team When the government introduced my career with increased responsibility member in drafting the implementing the Mining Law No.4/2009, respect of under a less bureaucratic environment. I regulation for the then newly enacted oil contract sanctity became questionable. followed the company’s evolution from & gas law. The 2001 Oil and Gas Law contained a oil and gas into geothermal undertakings transitional regulation that stated that and marketing. I spent four years in Eventually when Chevron acquired “existing contracts are grandfathered”, marketing alongside PSC contractors and Unocal I moved on and landed in which means that they remain valid Pertamina colleagues. I participated in ExxonMobil to help develop the Banyu until they expire. Yet, in the Mining Unocal’s marketing of LNG from Bontang Urip field in Cepu. After serving over two Law, the transitional regulation had to Japan, Korea and Taiwan. During that years with ExxonMobil I ventured in the three paragraphs that undermines the period I spent more time in hotels than mining sector having been hi-jacked by contract sanctity. The first paragraph of with my family, because negotiations PT INCO tbk. to join as member of the the transitionary article said that existing were often long and intense (the motto Board of Directors. I served two terms in contracts would be honored. The second was “no weekends for gas peddlers”). Inco’s Board until it was acquired by Vale article said that the contracts signed prior Now, when I look at my family photo of Brazil. Total E&P Indonesie eventually to the published law would be adjusted brought me back to a PSC in East to the new law. The third article said that Kalimantan, namely Mahakam. You’ve if the contractor is unwilling to adjust heard of the expression, once you drink then it would lose its license. The aim ….they….they don’tdon’t understandunderstand water from the Mahakam, you will one of the Minerba Law was to empower thatthat theythey dodo notnot day return to the Mahakam river. the downstream industry (hilirisasi) like understandunderstand building smelters and discontinue the How is the evolution of gas from export of raw material. The intention was export to domestic usage? good but the timing was less fortunate due to the fall in commodity prices; albums, I don’t recall many happenings, Post reformation, our nationalism LME (London Metal Exchange) dropped when it was, where it was. When I ask my increased concurrent with more demand significantly and did not recover to its wife, she said, “of course you don’t recall for domestic gas utilization. Domestic gas original level. So, how could you expect because you weren’t home at that time.” utilization was heavily promoted in lieu of your shareholders to invest billions in Marketing gas was a different world. disposing to LNG exports. the face of falling commodity prices? However, it was fun since we were the This controversy continues to date on largest producer so we received respect This resulted in heavy involvement by the question whether or not Contract of and recognition. During the course regulators before LNG can be exported. Work holders may continue to export of this period I served as Chairman of Certain procedure and regulation raised raw material. As is in any agreement, a Regulatory Affairs Committee at the concerns to Indonesia’s conventional mutual consent by the parties be best Indonesia Petroleum Association (IPA). buyers. The longer than usual approval sought rather than imposing a unilateral Several accomplishments that I was process raised certain questions. At obligation. proud of was a co-writer of a white one occasion, I said to (the late) Pak paper regarding removal of facilities that Baharuddin, one time General Affairs Back to your career, Pak Nurman. eventually led to the inclusion of funding Director of Pertamina “Pak, you are the What happened next? for abandonment and restoration under Guru of the LNG industry and Indonesia new PSC generation and secondly, with used to be the Mecca of LNG; Indonesia was the price leader - everyone referred to the Indonesian LNG Price. Even nowadays, many people from the Middle East expressed interest to learn from PT Badak. So Badak and Arun are recognized as a center of excellence for LNG“. Now we have heavy red tape before we can export LNG (not that in the past there was no approval process). Why don’t you share your expertise and experience to the government?” He responded by saying, “Nurman, they don’t understand that they do not understand.” Having heard this, I rested my case. The evolution involved procedures and SPE Java . JAN - MAR ‘17 17 regulations that resulted in more lengthy in its area of operations. This case, if the restriction to foreign flagged drilling approval process. The spirit to promote allowed to proceed, has a potential to vessels. The availability of Indonesian domestic gas utilization is regrettably taint the image of Indonesia’s military. flag drilling vessel is limited and to not supported by the ability to absorb If the courts allow the case to proceed, impose the principle could potentially implying a saturated market. The this could impact the relationship force some PSC operators to release production sharing contract prohibits the between Indonesia and the origin of these foreign flag vessels thus forced to flaring of gas and curtailing production is this particular PSC contractor. With this cease production. Eventually this overly not an option. potential exposure, I sought for a helping strict limitation was softened to allow hand from Indonesia’s Foreign Affairs continued operation of foreign flagged Did you face conflicts between your Department. I explained the Director drilling vessel. As to Pertamina yes, we duty with Unocal and your duty as a General for International Cooperation want to see Pertamina succeed as a world Indonesian? about the lawsuit that has the potential class player. Throughout my career, I have to expose some member of the Indonesia sat across, alongside and as partner with Even though I pursued a career in a armed forces to be tried in a foreign court Pertamina. Pertamina is our state owned multinational company, I am still an and that we need to prevent this lawsuit. enterprise that we have to be proud Indonesian. My flesh and blood are Indonesia’s Foreign Affairs Ministry then of. Speaking of taking over expiring Indonesian. Yet, since I never work in issued a letter of expression of concern contracts is actually a default mechanism a national company and am not a civil to the State Department of that country under the law since 1971 and the 2001 servant, I am often asked, when are you about this lawsuit then being deliberated oil & gas law. Once expiring contracts are going to serve your country? by the courts. surrendered to the State (ESDM), they will eventually hand the license to Pertamina, I regret such a question, because I always if Pertamina expresses interest. However, put our national interest in front and the surrender of an expiring license remain not in conflict. cannot be done with a blind eye. Once your contract expires, it would be unfair Here are several examples; when the to Pertamina if you just handover the key monetary crisis broke, the government and leave. unilaterally declared that PLN’s payment obligation to Unocal under the ESC was Consider Mahakam, a mature asset and unilaterally locked at the exchange rate a very complex one. As with some other at that time, which was 2,250 Rupiah mature oil and gas fields that are still per US dollar. With the exchange rate producing, many wells also produce sand. deteriorating to 15,000-20,000 Rupiah I explained the content of the letter To maintain production, Total has done per US dollar, this resulted in Unocal’s to the State Department of that PSC a lot of well interventions and workovers. accumulated receivable swelling to 500 contractor’s country expressing concern Before I retired, Total was running 10-11 million dollars within the years. It looked of an Indonesian. rigs, supported by close to five hundred like an unpaid debt, and our mother-ship ships, a massive operation from small kept asking for the status of the payment. The above are some of the examples I boats to sophisticated work boats. I We had two alternatives, keep silent or displayed in serving the interest of our once said to the naval local command take recourse by suing the government. country which explains my objection to (DANLANAL) in Kaltim “I’m sorry if Total’s The mechanism for recourse was written claims that I do not serve my country. fleet is bigger than yours”. But we need very clearly in the contract; and Karaha them to manage and maintain the wells so Bodas exercised it. My geothermal How about Pertamina taking over so they can perform safely at their optimum. local management insist to pursue the many contracts? That’s an operator’s responsibility. recourse. But my nationalism arose. I advised Unocal management that suing The nationalism spirit of our people is Some nationalists consider “Foreign is not an option as it will impact Unocal’s sometimes overwhelming. Some cite companies loot our resources and oil & gas operations. Sue the government Chavez as the role model to follow, but leave crumbs for us.”, and herald the now and face the risk of unpleasantness follow him and we could be bankrupt government to take over blocks from by the government. So, a renegotiation like Venezuela. While nationalism is these foreign companies. So when a of the contract was opted. That was not important, but we have to express this license of a producing asset is to expire, a win by either side, but managed to with caution so as not to backfire. An it would be best to allow a transition prevent a law suit against Indonesia. example of an inappropriate nationalism period with the new operator. Let me is regarding the cabottage principle use Studebaker as an example. Few Another example. In a class action introduced in the Shipping Law. While people can drive a Studebaker car. Give brought by an anonymous plaintiff there no objection to restrict foreign a Studebaker to a young guy and he against a PSC contractor accusing it of vessels for the transport of passengers will utter “I can’t even drive with a stick using the military to suppress the people and goods/freight, regrettably it expands shift, let alone a Studebaker.” Someone 18 SPE Java . Jan - Mar ‘‘1717 needs to teach him “This is how you drive held many potential developments. But The PSC is an agreement that provide a Studebaker.” There are certain ways following the depreciation schedule in consensus of the parties; any differences to handle the car. Total promoted this the PSC, projects will not pay off. So, to are to be resolved amicably among approach for a seamless transition in the develop this potential, Total needs a PSC the parties. This is the soul of mutual interest of the resource. Much is at stake extension or depreciation acceleration cooperation and the spirit of the in taking over the Mahakam asset that schedule. Fortunately, the proposed agreement. Nothing is executed requires billions of dollars for its annual accelerated depreciation option was without the consent of both sides. work program and a strong mothership considered. Disgruntled government Post enactment of law # 22/2001, the to support its operations. Not that I do staff felt that the government was being environment became heavily regulated not want Total to surrender the asset robbed from its original take. Indeed it that accumulated with the promulgation to Pertamina, but surrendering such a impacts the take, but the Government of GR 79 that moved away from the spirit mature asset would be best done through gained increased production that without of cooperation. This is one of the reasons a transition period as Total once offered the amendment the projects would not why the IPA sought to seek judicial review the government. We now must respect be developed. against GR 79 before the Supreme Court. the government’s decision that handing over the keys (license) to Pertamina will The PSC provides for additional Before IPA filed for a judicial review occur at midnight of December 31, 2017. investment credit that can be used against GR 79, the IPA strived to approach for development of fields that would stakeholders within the government, in a A reservoir is like a woman; no intent to otherwise not be economical to develop. spirit of mutual cooperation, to consider be chauvinistic. Treat her badly and she Unocal successfully secured project rescinding GR 79. These efforts failed will break. If you have a good reservoir financing for the first deep-water as the Supreme Court denied the IPA’s but you don’t know how to treat it right, claim. Several years later Total met with it will not produce to its optimum. So let’s newly appointed Minister of Finance who transition, so that you will know how to took over his predecessor that moved to drive the Studebaker properly. Look at FewFew peoplepeople cancan drivedrive the IMF in DC. The topic of the audience the facilities in Mahakam; they are over a StudebakerStudebaker carcar was “GR 79” so, as we entered his office, 40 years old but look brand new, just like he immediately said; “You should not be the condition at PT Badak. worried about GR 79, because your cost recovery is already in the state budget.” Again, we trust Pertamina to handle development in Indonesia, namely As visitors we looked at each other in Mahakam, but does it have a mother- West Seno. Unfortunately, subsequent dismay and were lost for words. ship ready to support Mahakam and all approvals for development of the other of its assets? When an operator needs fields in the strait of Makassar (currently Does Total have a plans to take another help, we call the mothership for resources known as Chevron’s IDD) was not secured PSC or explore in Indonesia? or capital. In Unocal, although smaller back then. Unfortunately some view than Exxon, BP or Total, we still call our investment credit as not using equity Before I retired, Total made significant mother-ship for help. Pertamina has many funding as required in the PSC. Had this exploratory efforts in two blocks: one in assets and, confronted with its many been secured during that period, IDD the Bird’s Head of Papua and another shortcomings this may lead to it biting would already be producing today. one in Mentawai. Total spent close to off more than it can chew. We highlight 115 million dollars for a well in Papua. these things for the sake of the reservoir What happened to the spirit of The well was not completely dry. There to be well managed when the block (the cooperation? were signs of hydrocarbons, but further Studebaker) returns to Pertamina. Total has success stories in other countries with transitions on assets with expiring license. Did Total consider to re-enter as a partner? Yes, of course. Total calculated advantages and disadvantages. But if you have mature fields and can only have a 15% interest, is it worth to take the interest? What about investment close to PSC expiry? Ten years before expiry, Mahakam still SPE Java . JAN - MAR ‘‘1717 1919 exploratory efforts are required. with no new oil and gas discoveries and the environment and circumstances of no replacement of reserves is costly. We the days each were deliberated. Should Total also drilled one high-risk well were eating our capital not our profit, and we return to the Pertamina era or, should in Mentawai; also with no result. So, increasingly cannot meet local demand. we embrace the State-Owned Enterprise yes, Total has proven its interest in The days of giant fields such as Arun, (SOE) model? exploration. Total had several exploration Rumbai, and Mahakam are behind us. blocks before I retired, however under However I am a believer that continued We cannot turn back the clock. You today’s environment exploration is not a advanced technology and efficiency will will recall that the 1971 Pertamina law priority. open opportunities in exploration and was administered under an absolute development. As I said, this must be and undisputed Administration. Post Is the Government motivated balanced with a conducive investment reformasi this is no longer the case; in to increase the attractiveness of climate and in competition with other today’s environment almost everything investment in Indonesia? countries that have similar resources. is disputed, including the 2001 Oil & Gas law itself was challenged for judicial Absolutely, we see today’s headline about Do you see the light at the end of the review several times, lastly resulting the gross split recently introduced by tunnel? in the disbandment of BPMIGAS. The ESDM; this is part of the government’s role of regulator is to enforce the law & effort to keep the investment climate Yes of course, I am an optimist, especially regulation so that there is certainty in competitive. Of course every decision, with a vested interest since my youngest its implementation. Ideally Pertamina right or wrong, has an impact. We see son recently graduated his masters from is to focus its role as the State’s entity in the media that this newly introduced the University of Aberdeen in Oil & Gas in the oil & gas undertaking free from construction is heavily debated; pros Management, who has great passion in external influence. To make a regulatory & cons. Unfortunately Indonesia is in pursuing a career in this industry I would framework succeed require it to be clear, double trouble today: At the time when like to see a future for his career. We see consistent and not contradict with higher the IMF forced to replace law # 8/71 hierarchy of law. A balance between a to unbundle Pertamina, Indonesia had firm government with stakeholders at no choice and eventually enacted law the House and provincial governments #22/2010; but today with low oil prices OilOil andand gasgas exploraexplora onon to show respect of the law. This includes coupled with increasing uncertainties isis likelike bringingbringing moneymoney removal of any conflict of interest within since the disbanding of BPMIGAS by intointo a casinocasino SKK, Pertamina and the government. the Constitutional Court and the status of GR 79 (rescinded or replaced?) still How can a SOE make a profit? being deliberated, we see MNCs leaving Indonesia. a positive atmosphere with the ESDM As mentioned before, board members ministry working hard with the Finance of an SOE should be free from external The regulatory side does have significant ministry on GR 79. I understand that intervention. As we see in today’s news impact; when new regulations are the revised GR 79 will be applied to new about the shake in Pertamina’s Board introduced, the environment will be contracts, whilst existing contracts will be appear to be effected by conflicting in a wait and see mode. This is how we honored. intervention. Second is of course to see see the IPA’s position on the gross split to it that good corporate governance introduction as it is too early to comment Unfortunately, Lapangan Banteng is implemented. What mechanism are without knowing how the implementing (Finance Ministry HQ), is still obsessed you looking for? As shareholder of the regulation will look like. We see a about keeping cost recovery low and SOE, when selecting candidates to serve potential repeat of post enactment of law look for every opportunity to challenge as Board member, the Government # 22/2001 when the Oil and Gas Law was recovery of operational costs. The Head should see to it that the candidate is enacted, but the supporting government of SKK has responded correctly by saying professionally capable in the related field regulations (GR 35, GR 37, and GR 42) that cost recovery is part of investment. given clear chain of command. How the were released three years later, namely in SOE profit will depend on how the Board 2004. So from 1997 until promulgation How can we manage better with runs the SOE with proper supervision by of the GRs and time to digest this new Pertamina and SKK Migas? its shareholder. Pertamina is under the frame work, we lost almost 15 years purview and oversight of the Minister where there was neither new field Our Oil and gas history went through for SOE but at the same time supervised development nor exploration activity. various episodes after independence; under the ESDM (the Ministry of Energy) We cannot afford another wait and see (1) 1960-1971 under the Mining Law 44 on technical matter (instansi teknis). mode as the demand for energy continue of 1960, (2) 1971-2001 the Pertamina Which office takes precedence? to grow with the various infrastructure law 8 of 197, and (3) 2001-today in the projects launched by the government reformation era. I do not judge which one Should we monopolize the oil & gas as well as growth in GDP. So, 15 years is better, but all were promulgated under industry like Venezuela? 20 SPE Java . Jan - Mar ‘‘1717 I understand that there are some (over nationalistic views) that insist the government to take over all concessions and have Pertamina run them. Look what has happened to Venezuela today. So, no to nationalization. The spirit of the (now obsolete) 1971 Pertamina law provide that foreign investors are invited until the state owned company is capable to assume full charge in exploiting the resource. This concept has worked well through the creation of JOB and TACs with the PSC as foundation for the MNC to operate in Indonesia. We need strong international operators here so that we can learn and share the risk of this high tech and intense capital industry before running it on our own. Look at PEMEX today, they have now open Mexico to MNCs to explore oil & gas. To explain alternatives, including nuclear power. high risk and capital intensive industry. why, here is an analogy in the medical It is supposed to be the cleanest and side. Go visit a hospital in Singapore, and cheapest energy as long as we know how Oil and gas exploration is like bringing you will see that probably close to 75% to manage the risks. But before our eyes money into a casino. You put the money of patients visiting those hospitals are is the potential of geothermal resource on the table, spin the roulette where the either Indonesian or expatriates living in where I have experience when developing ball can hit either red or black. If you hit a Indonesia. Why? I share my view with an Gunung Salak. number with the right color, that’s when Indonesian doctor friend, “The profession you hit the jackpot. If it hit neither color is arrogant because you disallow non You are active in Kadin’s Oil & Gas nor number, you lose. So imagine going Indonesians to practice medicine in the Committee. How do you see these to a bank to borrow 100 million dollars country. Yes, we have good and capable sources? with a purpose to play in Sentosa or doctors, but doctors also need support Genting Casino. of professional technicians with high Kadin is the association of Indonesian expertise, equipment, R&D and finance. entrepreneurs, with a vision to promote As KADIN I have interfaced with One way to develop is to learn how to be Indonesian entrepreneurs. the European Chamber Commerce. professionally capable and competitive. European investors question the policy Once you have the trust of the people, In the oil & gas industry, the national on mandatory use of domestic resource there would be no need for Indonesians private companies struggle to compete (TKDN). There is concern that when to go offshore for medical treatment. We under the same terms and conditions as the negative list for foreign investors have to reverse this. We have the market, major foreign companies in their PSC. We grow, there will be less room for so bring the expertise here. Once we have will need to have a framework for national foreign investors to invest in Indonesia. an expertise center here, they can share private companies that is more lenient Regulators will have to carefully balance their experience and we can benefit from compared to the conventional PSC terms the need to promote local national that. We can develop and, therefore, we currently applied to PSC contractors. companies and the need for foreign will be able to prevent this market from For example national private companies investment. In a global society we live going outside. should be exempt from restriction for in today we cannot afford to close the tax consolidation and exempt from doors to foreign investment. This will be We need to change our mindset. Don’t remittance of non-tax State revenue judged by investors’ confidence in doing over-nationalize. Open ourselves to learn (PNBP). If these can be removed for business in Indonesia. We need to have from others’ mistakes to avoid repeating private national companies, it would allow an open mind, then discuss options how their mistakes. this private sector to grow? Subsequently to execute. If you stick to persistency of private national companies should also “must” and ignore the balance of mutual Now, the government realizes the be given opportunity to acquire expiring cooperation, we are at risk of losing trade industry is comatose, and discusses licenses. One major challenge for national partners. intensely among ESDM and the Ministers. private companies is access to local Meanwhile, while we make this correction, financing with competitive interest rates. Thank you Pak Nurman for your time. the gap widens between consumption Current high interest charged by both and production. We will soon be a gas state owned banks and private national importer, so we need to look at energy banks is too expensive to venture in this SPE Java . JAN - MMARAR ‘17 212 Interview with ttUTUKAUTUKA aRIADJIaRIADJI IATMI Chairman 2222 SPESPSPEPE JavaJaJavava . JJanana --M MMararar ‘171717 hank you Prof Tutuka for your necessary and right rules and laws, and this Data transfer, discussion and questions time. First of all, what is your will guide everything to the right direction. between SKKMigas and oil companies background? How can we achieve that condition? It would be conducted online or through T starts with education. A charismatic their website. Every discussion and MoM On graduation from Petroleum leader can change that, it will not easy. would be recorded by the system. The Engineering of ITB (Bandung Institute government would need to release a of Technology) in 1988, I immediately What’s your speciality and passion in SOP to the contractors for this process became a lecturer. In 1991, I luckily got a Petroleum engineering? and to ensure that online documents are scholarship from the Texaco Foundation, recognized as legal documents. which funded my Masters and Doctoral My speciality is the Plan of Development Degrees in Texas A&M, both in Petroleum (POD), integrating the basic disciplines in This online approach would drive Engineering. That changed my life because petroleum engineering: rock properties, openness of each party, saving time and of the education and culture. fluid properties, production engineering, cost and accelerate approval of POD’s. I reservoir engineering, surface facilities and believe that the key is trust built by mutual In 1997, I returned to Indonesia and economics. openness. resumed my career as a lecturer in ITB. From 2011 until 2015, I had been the Vice The weakness I see in implementation At the end of the day, companies and Dean for Academic Affairs in the Faculty of of the POD is a lack of multidisciplinary the government both seek increased oil Mining and Petroleum Engineering of ITB. teamwork. We know the concept of a and gas production - It can be done, Currently, I am a Professor in Petroleum multidisciplinary approach, but often oil management through openness and Engineering of ITB, and the 2016-2019 companies do not properly implement fairness. Chairman of IATMI. From 2016 to 2017, the number of Why do I love petroleum engineering? WhenWhen I waswas inin seniorsenior PSC’s reduced from 300 to 284. Of When I was in senior high school, oil and highhigh school,school, oiloil andand gasgas these, only 67 PSC’s are producing and gas sector contributed 60-70% to the contributedcontributed 60-70%60-70% toto thethe 18 are under development. No new national budget. So I thought “this is nana onalonal budget.budget. PSC’s have been awarded in the past the area that I can most contribute to the SoSo I thoughtthought “this“this isis thethe areaarea two years. How can the government country”. thatthat I cancan mostmost contributecontribute boost interest? toto thethe ccountry”ountry” You and Pak Arcandra graduated from The government has to work on that, the same university in the US. Do you because our challenges now are much have special connection with him? this concept. If we take a look inside, bigger than in the past. they perform tasks sequentially instead I respect him and I think he respects me. of simultaneously. Let me give you Now, when the government offers new I left from College Station to Houston to an example; let’s say we are making a blocks, they only provide raw data. This work for Texaco after finishing from the reservoir model. We start with geology is not sufficient information. The result Texas A&M University when he just came and geophysics, and when they are is that oil companies could develop the in 1996, so we did not meet each other at finished, they submit their work to wrong geological concept of their area, that time. But, we know now each other petroleum engineering. That’s not right. and after drilling 3 or 5 dry holes, then now. That’s not multidisciplinary. They have to run away from Indonesia. Oil and gas is sit together and start from the beginning. different from other industries, uncertainty What do you want to do for Indonesia? Discuss first the objectives then define the is the biggest problem which increases the contribution of each discipline. In practice risk of failure. My personal broad view, this country is this rarely happened. That’s why at the end not going in the right direction. We need of the day, when drilling new wells using The government should minimize this people to stand up. It’s the culture, we the results of a study, they get frustrated uncertainty, by offering something half- need to change the character, morals and with dry holes drilling. People blame each cooked, by processing and interpreting behaviour of our people. You can imagine other whereas we should blame the whole the data. how hard it is. In my opinion, developed team. We need to correct this. countries start from a belief in education, Also, we are moving to the eastern part from elementary school right through to I teach on this topic and have also written of Indonesia. The geological concept of high school. This builds strong character a book for undergraduate students. eastern Indonesia is different from the in the people and that makes the whole western part of Indonesia. So experts from thing can be achieved. In the last few years, only 2 or 3 PSC’s around the world should be invited to have converted from exploration into develop this concept. It should start from the House of exploration with a POD. How can we Representatives, where members come speed up the process? Will Gross Split attract investors? from different political parties. The right people in the House will then can make By moving the POD process online. I personally don’t mind between Gross SPE Java . JAN - MAR ‘‘1717 2323 Split and Cost Recovery. If the split is areas implementation on these. interesting then it will open the door, because this is business. However, a good Don’t leave the government alone - if If the 5% incentive for EOR were thing is that Gross Split eliminates a lot of something non-technical is not going to negotiable, would that be enough to bureaucracy. the right direction, we have to alert them increase the production? and work closely to solve the handicap. I fear the implementation of Gross Yes, if the incentive were high enough. Split will cause problems, especially You mentioned that EOR will not For now, the Gross Split decree is set and implementation of the appendix of the work with Gross Split. So how can we cannot change. So perhaps later on. Oil Ministerial Decree, which lists incentives increase activity in EOR? companies should do their simulations relating to various properties of rocks and propose to the Minister the split and and fluids. For example, a CO2 content of Again, we don’t care about Gross Split incentive that can make EOR work. above 10% will get an extra incentive of or PSC. The criteria to judge the success 1%. But, this will need a validation from of Gross Split will be production. Gross Actually, that brings me to another point. the SKKMigas as the GoI representative Split is designed to drive oil companies Before talking about what is the right split, involving equipment type, measurement to operate efficiently but it should not to we first need to fix the criteria for the procedure and sampling method. I think reduce the production. incentives. The current criteria relate split this will cause a lot of problems. to elementary properties like API and CO2. There are only two ways to increase To my knowledge, this relationship is too Recently you gave a presentation on production - EOR and exploration. For far to be connected. For example, in a block Gross Split in Pertamina. Can you EOR, we recently completed a study that consists of several fields, and each elaborate on your findings? together with SKKMIGAS of about 490 field contains of many layers having some reservoir zones, and we found that different oil gravity (API) values, which API Yes I gave that presentation to take gravity that will be used for the incentives? an immediate big concern from the Averaging the API values arithmetically government about the consequences of violates the academic law. I think that implementing the Gross Split. I promotepromote toto SKKSKK MigasMigas the criteria for split and incentives should toto movemove tthehe PPODOD pprocessrocess relate to production and reserves. For Gross Split is an opportunity but it onlineonline instance, increasing the reserves status needs fine-tuning to work for all fields. from P3 to P2, or from resources to P3, is A good thing is that procurement and eligible to get an increased split. administration will depend on the company, and the government will focus Indonesia EOR potential is estimated to What is the minimum remaining oil-in- on technical matters. be able to double the current national oil place to justify an EOR project? reserves. How to do it? However, it is clear to me that Gross Split Right now, we use 10 mmstb. Indonesia regulation lack of simulations before The first concern is solving our technical has about 46 billion barrels of remaining issuing the decree. It should have tried problems, for instance, aging equipment oil-in-place, and we target 10% for EOR. with oil companies using real field data and facilities, tight reservoirs and That is reasonable. In order to make for a sufficient enough time. In petroleum infrastructure in remote locations. The the EOR Projects woks, a massive EOR engineering, it is a standard to do a lot of second concern is regulations to support projects - not one by one, is probably the simulation before making decision. EOR. For example, it is not easy to free solution. That’s what we call it by a low- the land for EOR, so we need to ask help cost EOR. Oil companies need to manage I see the Gross Split is preferable for new other ministers for help. Third is the fiscal sharing production facilities and chemicals and offshore fields. For gas in the Natuna scheme. With Gross Split incentive for manufacturing. Sea that has very high CO2, we figured that EOR of 5% is not enough. I think the base the split will be 85% for the oil companies. split should be flexible or the incentives Let’s talk about energy. Recently On the other hand, I figure out that the should be increased. And the fourth and the government released decrees on Gross Split will not work for mature fields last one is the supply chain. For instance, renewable energy, which actually that are designated for EOR methods if we need surfactant for EOR, then there discourage renewable energy. because the incentive is too low (5%). should be prepared in a cheap way. Or, Companies think the business is gone if we need CO2, then there is a need to now. What is your opinion? Furthermore, in the Gross Split regulation, provide facilities of piping from the source the first split is a fixed base split. I think to the well. If that is the responsibility The government needs consistency in that this should be flexible and negotiable of oil companies, then this will not make implementing its national energy policy. In block-by-block to reflect the risks in the attractive for the oil companies. The 2025, renewable energy should contribute area, especially for exploration blocks. government should come and solve 23% of all energy. But in my opinion that’s So, the government might need to revisit problems of infrastructure. These four impossible on our current track. the Gross Split decree in order to make concerns are the big problem areas. Every it work, perhaps after several concession related institution should work together Take as an example geothermal. Indonesia 24 SPE Java . Jan - Mar ‘‘1717 has a huge potential for geothermal, but difficult to find a job? need energy. only 5% is utilized. Why is that? Because the cost of production is higher than the Yes it’s tough. A few years ago, when the How can SPE contribute more to the selling electricity price, so it doesn’t work. oil price was still high, fresh graduates industry? This is the government’s responsibility to could easily find a job. Even before fix the regulations. graduation, some had two or more offers. The best way is to support EOR But now, after 6 months or 1 year, many of planning and multi-company Integrated Meanwhile, we continue to promote the fresh graduates still cannot find jobs. Development Schemes. Invite SPE experts coal for electricity. There is no big real Some of them then go abroad to study for to Indonesia to explain “this is how to do implementation of renewable energy. Masters degrees. EOR”. We are now at the stage of knowing It should start from the government. the potential and screening. We don’t Currently we don’t really see big step yet. really have experts on EOR, so we have to ask the experienced people how to do it. Indonesia is not like Africa - the sun is hot StudyStudy programsprograms andand throughout the day, but here we have departmentsdepartments bbasedased onon Oil companies as well as government more clouds, and fast changing weather. products,products, likelike petroleumpetroleum bodies need a proper organization to So it is not really s great potential for solar engineeringengineering maymay nnotot bebe conduct EOR to manage and develop energy. For wind energy, the best place sustainablesustainable capability. is Kupang in West Nusa Tenggara, not in many areas. A small energy for villages EOR can also build national capacity, could be provided by biomass. Thus, in The surplus of fresh graduates is partly for example producing chemicals such short, there is not much that we can hope the university’s responsibility. We have as surfactant at low cost using local from those renewable energy. thought about it, and we are now working resources. At today’s oil price, importing to provide more elective courses like in surfactants is too expensive, it harms the In my opinion, if we want to be a energy, so students can work for energy EOR economics. developed country, we have to use nuclear companies in the near future. energy, and we have to start now. Actually And to finish, a serious question: what the first President of Indonesia built the Study programs or departments based on are your favourite foods? institute for nuclear energy in 1965, but non-renewable products like petroleum so far it does not come to electricity for engineering may be unsustainable. At Pecel (vegetables and hot chili peanut), the people. Indonesia need to look for an some time, the product will disappear or sate, es campur and ketoprak. I came from international help. be replaced - that is natural. For example, Solo, it’s the best place to experience the in Indonesia, our petroleum might finish national culinary tradition. What is your message for our SPE in 25-50 years. So we have to switch to student members who are finding it energy study program as we will forever Thank you Pak Tutuka. SPE Java . JAN - MMARARA ‘177 252 Interview with IIwanwan CChandrahandra President director of ge oil & gas INDONESIA 2626 SPESPE JavaJaJavava . JJanana - MMararr ‘‘171 in 1984, there have been 6 cycles of ups wan Chandra is the Country Leader and and downs in the oil and gas industry. In President Director of GE Oil and Gas Indonesia. 1986, there was a recession and oil prices He has more than 30 years experience in oil dropped down to US$ 30. Later, in 1997, andI gas industry, and has been active in many when I was in Aberdeen, the oil price associations, including SPE, IATMI and IPA. He crashed to US$11. It fluctuated wildly: received SPE team in the middle of his busy up to $30, down to $20, down again to schedule, sharing his experience and wisdom. $10, up again to $30. Then came good times, and oil reached its highest price in early 2014 of around $140. And then it dropped again to $45. So we have Pak Iwan, we would like to know about there has to be no delay. And it asks for experienced and survived oil down to your career journey. How did you come perfection. US$11. Some were “V” shaped crashes, to join the oil and gas industry? where the low price only lasted for a year As a field engineer, before each job, I and then it went up again. One was “U” When I was a kid, people would ask “what prepared the equipment. Then, during shaped, where the low price lasted two you want to be when you grow up?”. My the job, I worked non-stop until the or three years, before it went up again. friends mostly answered “I want to be collection of well log data was complete. This current crash I call a “bathtub” cycle, a doctor.” But, I had another dream, to In extreme cases, the well-logging took because the oil price has stayed low for became an engineer. I didn’t know why I three to four days. Immediately on longer. But I am sure the oil price will go wanted to be an engineer, I just did. finishing, we had to write the invoice that up again. needed to be signed by the company At university, I took Electrical engineering man. I still remember that the invoice had That is why I stay in the oil and gas as my major at Satyawacana in Salatiga. to be precise until two decimal places. industry, not moving to another industry My undergraduate thesis talked about Can you imagine yourself working hard like banking or digital. Also, Indonesia the digital command language of VAX/ for three days and nights with severe lack is highly dependent on oil imports. VMS. At the time, there were only two of sleep, and then having to hand-write Even if this year’s production target VAX/VMS computers in Indonesia; one an invoice with such precision? Before the of 0.86 million barrels per day can be was owned by Schlumberger where I invoice was signed, we were not allowed accomplished, we need 1.3 million barrels did my internship, processing data from per day. So, Indonesia needs every barrel oil wells, and the other belonged to the of oil that it can produce, so I want to Navy. The computer was as big as this help. room and I was very impressed by its We need to work processing ability. Meanwhile, the Navy on “FastWorks” concept, I once plotted oil price against rig count. used their computer to monitor ships and where we get the big idea, When the oil price goes down, the rig radar in Indonesian waters, because this do it in a small scale, count also goes down. When oil prices computer could do multitasking. and improve go up, the rig count also goes up. But there is a delay. In international markets After graduation in 1983, I applied for (outside of US and Europe), when the a job at there, in the department that oil price crashes, the rig count crashes 3 processed digital data like well logs. I said to go home. The oil and gas industry months later. But when oil price picks up, to myself, “Okay, it suits me. I can still be demands us to be perfectionists. These the rig count takes 6 months to pick up. an engineer, working with computers, at early experiences educated and shaped an oilfield services company with a high me to survive in this industry until today. Indonesia is different. 3 months after the salary.” I started working there on January oil price went down, the rig count still had 25, 1984. That was 33 years ago. The Oil and gas industry is cyclical, and not decreased; although the rig count in we are in the worst down-turn in living the US and Europe had. Then, when the Before long, I was assigned to Australia memory. Some of us can’t see light at oil price went up and the rig count in US as a field engineer, dealing with foreign the end of the tunnel yet. What is your and Europe followed, the rig count in companies, and working with high-tech view about why we are here right now Indonesia did not increase. Why is that computers. I was very proud; although I with all the problems we have? so? Because when the oil price goes up, was a fresh graduate, my company had rigs are first hired by US, and then they already assigned me to work overseas. I have worked in a service company, go to Europe and the Middle East before My operators were foreigners. There and our clients are oil companies; from they reach Indonesia. Thus, the activity were good times and bad times, like national oil companies like Pertamina, level in Indonesia has a one-year delay being assigned t0 the desert. I learned to major oil companies like Chevron and from the US and Europe. fast that this industry is challenging and ExxonMobil. So when oil companies rise demanding. Everything has to be now, and fall, we follow. Since I joined them The benefit of being a global company SPE Java . JAN - MAR ‘‘1717 2727 working in in 130 countries is that we have indications (from other countries) that we can use to plan in Indonesia. OIL PRICE CYCLE All multinational companies have that benefit, although I don’t how far each of them use it. The point is, I think in Indonesia the business is here to stay. It is impossible that the government closes recession recession recession all oil companies and decides to buy all the oil needed from abroad. In fact, I think we will continue to increase exploration and increase the production of existing wells. Those are things that we must do, it’s not an option. I think that amongst oil producing countries, Indonesia is unique, because oil production activities will never stop here. Moreover, based on recent research, our oil reserves are still huge, aside from the shale oil, shale gas, CBM and geothermal energy. Back in the US, the next well is only a few cost for expensive equipment to reduce hundred meters away in open country. the CO2. We also have a technology I give lectures to students at Trisakti, Shale is unpredictable compared to called Combined Cycle, where the hot Gajah Mada, and other universities, and regular sandstone reservoirs. How exhaust gases from the turbine is used the students ask, “Should I stay in oil long will the well produce? How far will to creates steam which runs through and gas?”. I answer, “Yes!”, and they are fractures extend? To find out, we drill, another turbine, which increases power convinced, because they see that I’ve frack and produce. Over and over. So the output by 20%. been 34 years in this industry and I’ve logistics, infrastructure and land access seen a lot of ups and downs from an need to be available. In Indonesia, they So GE’s main activity in Indonesia is imbalance between supply and demand. are not. power generation? Two or three previous downturns were caused by recession: the global situation Besides shale gas, what are other We are also in digital. GE has a cloud- declined and so demand for oil decreased. resources can Indonesia exploit? based operating system for industry This downturn is different. Oil demand called Predix. It is open source from the is higher each year, but supply is even Oil needs more exploration, especially in GE store, so anybody can create their own higher, because of technology, and this East Indonesia. We have found oil there, apps. In Indonesia, PLN use GE Power, has created a lasting oil surplus. This is but it is not a big success. KAI use GE Transportation, Garuda use why this down cycle is longer this time. GE Aviation. Hospitals use GE Healthcare, Gas, on the other hand, looks more because we are strong in MRI technology. In the US, technology has dramatically promising because improving LNG increased oil and gas production. Can technology has overcome the difficulty of We also use the GE Store to speed up we do this in Indonesia? getting gas to market in a country with Research and Development. In the past, lots of islands. product development from concept, Of course, we can import the equipment to experiment, to field test, and finally and technology. The major technology Geothermal has the biggest potential: 21 prototype took at least 5 years. Now it is multi-stage fracture-stimulation gigawatts of which only a few gigawatts takes less than one year. Through the GE (fracking) of shale oil and gas. It is easy is developed. store, we can take 3D pictures and print to set up in the US because the land is flat them into a prototype machine. and they have infrastructure. Fracking We should remember that the biggest requires horsepower. In Indonesia, we usage of those oil, gas, and steam from The GE Store is a hub that allows exchange, could gather all cementing units from geothermal is to produce electricity. GE utilization, synergy and support amongst the big-four service companies and we has all the technology: steam turbines, teams. That is GE’s strength and that is would not have enough horsepower to gas turbines, and regular diesel fuel why we are a US$ 250 billion company. frack one well. So sure, we could import engines. Our turbines can run on diesel GE Oil and Gas is, of course, supported by the equipment and frack, but we have not or gas, but we concentrate on gas. Gas other divisions, but we are growing. seen an economic argument. Sumatra produced in Indonesia can contain high and Kalimantan have the best potential levels of CO2, so GE developed a turbine Since you’re talking about growing, for shale, but it is located deep inside the that can run with gas containing up to can you comment a little about the hilly forest. 60% of CO2. So the operator avoids the near future of GE Oil and Gas? 28 SPE Java . Jan - Mar ‘‘1717 GE has always been strong in it to fit the job. idea? With ‘FastWorks’, we’ll give you an turbomachinery. We added subsea when existing refinery to trial the same concept: we bought VetcoGray, ESP’s with the In this down cycle, we’re actually building complete with rotating equipment, Wood Group, rod-lift systems with Lufkin, up. And hopefully when the business fabrication monitoring. cased-hole and open-hole logging with goes up again, we’ll continue going up.. Sondex. Downstream, we have control We apply digital so that we can predict. measurement in refineries with Bently GE not only does mega projects. GE Scheduled maintenance becomes Nevada. support the government program of predictive maintenance - if a machine will “Indonesia terang”, lighting up 42 villages fail in two months, we can act now, like Our business models are changing. For in Papua. GE has wind and solar - the ordering spare parts that we don’t hold in example, customers can rent rather than answer for remote places off the grid. stock. When the spare part arrives, we can buy. The program is not really about lights. schedule maintenance to replace the part It is about sustainability. For example, before the equipment fails. We did this in GE machines are in LNG plants: Arun, villages are often near beaches or rivers Donggi-Senoro LNG. Badak, Tangguh and Donggi-Senoro. because the main activity is fishing. The These projects are long cycle and so fishermen are limited because they don’t For non-oil and gas, that may work the machines are bought. On the other have cold storage to preserve the fish. very well. However, for oil and gas, the hand, drilling wells is short cycle, and so So we provide electricity to power cold PTK 007 is probably a hindrance? we move from selling equipment into storage. services. The service cycle is “I need it In Indonesia, to participate in a bid, we tomorrow, can you come tomorrow? How does GE develop technology? need to have a proven technology to Wait, can you come today?” be technically qualified. A typical two GE believe that technology brings the envelope system requires participation Headquarters realized that to grow future to now, such as US shale oil from three vendors with comparable organically in oil and gas would take too technology, and then the lowest bidder long. So GE sees in the market what’s One GE program is ‘FastWorks’ which is will be selected. Although the intent is available to buy. For example, with Baker “get the big idea, find the small scale, and positive, such system may prevent new we have a merger where GE owns 62.5% let’s do it.” technologies to participate, especially and Baker Hughes owns 37.5%. There when it is proprietary by a single vendor is little overlap in technologies. GE and Say you come up with an idea of how or very few vendors. Baker companies will be connected by to monitor LNG plant performance with digital. digital, and how to connect them all. We hope this will change. Local content But if we wait for all the LNG plants to is fine for us. GE technology can be The new company will become a ‘full- be built, then when will we develop this bought by companies and used in their stream’ company. Upstream covers well construction to the wellhead. Mid- stream covers from the gathering station to loading (so LNG is mid-stream). Beyond that is down-stream. GE has upstream, mid-stream, and downstream technologies, so we are a ‘full-stream’ company. By next July I hope the deal will be finalized. I’m happy because we are creating something that does not exist today. What is your strategy to catch the 35,000 megawatts of new power generation in Indonesia? We are already there. The first 500 megawatts is GE mobile power because they needed it in six months in Lombok and Gorontalo, Sulawesi. The gas engines sit in a container and plug- and-play. GE had the basic equipment and we tailored SPE Java . JAN - MAR ‘‘1717 2929 Our legacy products are critical equipment with a long life-cycle, so our service is either centralized or regionalized. We have 120 full service engineers pooled in Malaysia for the Asia Pacific region, and they provide after sales service and maintenance for equipment we sell. For example, in LNG we have service agreement of 5-10 years. Similarly, for Bently Nevada products, we have Condition Monitoring System engineers to monitoring the system. With Lufkin and Wood Group products, customers can buy or rent our equipment. With rental, we provide the installation, maintenance, and running of the equipment. So we are partly a service company. In the US, we even have products. We have partnerships with In Indonesia, procurement regulations logging services. In the Middle East and PDSI, Elnusa and EJP. We have close to 40 may prevent them from using their chosen Thailand, we provide ESP’s. channel partners for GE Digital products. technology. This needs to be considered Since GE is a manufacturer, the products by the regulators since companies make Nowadays, with the down cycle in reach market and are promoted by our huge investments and take big risks. In oil, drilling and well construction is partners. In Indonesia, our factories are other countries, the oil companies can decreasing, but there are still tens of in Batam and Surabaya, and for power decide what is best for them based on thousands existing wells. GE sees these generation in Bandung. their experience. existing wells as an opportunity to build a sustained business for our services. We live with the country. GE has survived Second, from my personal experience, for 76 years Indonesia and developed big Indonesian engineers are good and smart, Previously in GE, requests had to be customers in state-owned enterprises like but lack confidence. We choose to stay submitted to headquarters. With long- Garuda, Pertamina and State hospitals. quiet rather than speak up. Appreciation cycle services, there were not many We support the infrastructure needs of towards Indonesians will be high if we can requests, so, everything was okay. the country and we follow the regulations. prove our capability. However, how can we prove our capability if we stay quiet, However, for short-cycle services like Jeff Immelt – Chairman and CEO of GE, so they give the task to another person. ESP’s, it has to be different. Over the John Rice – Vice Chair and head of Global It is a missed opportunity to prove past three years, GE has transformed Operations outside US, and Lorenzo ourselves. We lose before we fight. We and now every decision is made in the Simonelli – President & CEO of GE Oil & need to learn to take the opportunity to region, except for critical matters that still Gas have all been Indonesia within the prove ourselves. need to be linked to headquarters. So last 3 months. It shows that Indonesia is now our operations manager is based in important for GE. Pak Iwan, you were a leader in a service Singapore. company once, and now you are leading Pak Iwan, you worked in Australia. a company which originally starts as With the ongoing merger with Baker, GE What is it in Australia that you think an OEM and trying to reinvent itself Indonesia with me leading automatically maybe we should try. to become a service company through knows what to do, what to change and acquisitions. As the leader who is what to keep. It is not complex because In Australia, like in Indonesia, oil leading the transformation, what are the merger is among two companies companies need to find oil and gas which your directives and expectations? serving different parts of the value chain requires a huge investment. So their team with minimal overlap, so this merger is will think about the best way to success GE is different with Service Companies more ‘how to join’ notot ‘‘howhow to rreduce’.educe’. and decide which technology to use. They that do not sell equipment but only will analyze the field condition as well as provide services and sell data. In GE, first Hopefully, the serserviceviicce ccompanyommppany learn from their branches operating in we sell the equipment, and then we also culture and the OEOEMM cuccultureltture wiwillll bbee other countries. They may decide to use provide the maintenance and long term complimentary and ssupportupport eaeachach oother.thheer. a technology based on their successful services. experiences in other countries. Thank you Pak Iwan.n. 3030 SPE Java . Jan - Mar ‘‘1717 “Accelerating Reform to Re-Attract Investment to Meet the Economic Growth Target” PLENARY SESSION Plenary Session 3: Plenary Session 1: ”Priority Reforms to Re-Attract Investment” “Re-Attracting Upstream Oil and Gas Investment amidst the Invited Keynote Speaker: Global Capital Efficiency Drive” - Arcandra Tahar, Vice Minister of Energy and Mineral Invited Keynote Speaker: Resources RI - Ignasius Jonan, Minister of Energy and Mineral Invited Panelists: Resources RI - I Gusti Nyoman Wiratmaja Puja , Director General of Oil Invited Panelists: and Gas, Ministry of Energy and Mineral Resources RI - Thomas Trikasih Lembong, Head of BKPM - Amien Sunaryadi, Head of SKK Migas - Ministry of Energy of Mexico - Satya Widya Yudha, Member of the House of - Azam Muhammad, Partner and Managing Partner Representatives Commission VII General Energy and Mining Practice for Southeast Asia - Elia Massa Manik, President Director of PT. Pertamina of McKinsey (Persero) - Herman Huang, Wood Mackenzie - Rajiv Biswas, Senior Director and Asia Pacific Chief of - Christina Verchere, President of the IPA Board Economist of IHS Moderator: Vincent Lingga - Ronald Gunawan, IPA Director Moderator: Alex Ginting SPECIAL SESSION Plenary Session 2: “Beyond Revenues: The Indispensable Contribution of the “Investing in Indonesians: Impact of the Current Landscape” Upstream Industry to Local Industry and Economic Growth” Invited Panelists: Invited Keynote Speaker: 1. Chairperson of IATMI - Sri Mulyani Indrawati, Minister of Finance RI 2. Chairperson of IAGI Invited Panelists: 3. Chairperson of HAGI - Hariyadi B. Sukamdani, Chairman of APINDO 4. Chairperson of IAFMI - Eddy Tamboto, Senior Partner and Managing Director, 5. Chairperson of SPE Boston Consulting Group - Edi Damansyah, Vice Regent of Kutai Kartanegara Regency 6. I. Tenny Wibowo, IPA Director - Dan L. Wieczynzki, IPA Director Moderator: Andang Bachtiar Moderator: Desi Anwar CONVENTION REGISTRATION ORGANIZER: Indonesian Petroleum Association EARLY BIRDS RATES NORMAL RATES REGISTRATION** BEFORE 15 MARCH AFTER 15 MARCH Indonesia Stock Exchange Building 2017 2017 Tower II, 20th Floor, Suite 2001 Jl. Jend. Sudirman Kav. 52-53 Professionals / Delegates (Domestic, KITAS, KIMS IDR 5.000.000 IDR 5.750.000 Jakarta 12190, Indonesia holders) P:(62-21) 515 5959 F:(62-21) 5140 2545/6 E-mail:[email protected] Professionals / Delegates IDR 8.400.000 IDR 9.400.000 www.ipa.or.id (Overseas) CO-ORGANIZER: Student (Domestic)* IDR 400.000 PT Dyandra Promosindo The City Tower, 7th Floor Jl. M.H. Thamrin No. 81 Student (Overseas)* IDR 1.740.000 Jakarta 10310, Indonesia P:(+62 21) 3199 6077 F:(+62 21) 3199 6277 For more information please contact: E-mail: [email protected] [email protected] www.dyandra.com https://convex.ipa.or.id @ipaconvex Indonesian Petroleum Association @ipaconvex SPE Java . JAN - MAR ‘17 31 Interview with SSachaacha winzenrIEdwinzenrIEd PRICEWATERHOUSECOOPERS i Sacha. Thanks for joining us. We have a full service firm here in Absolutely. We are very active in First of all, could you please Indonesia of close to two thousand providing M&A advice, including tell us of your background? people spread across the audit, taxation financial and tax due diligence, and deal H services, financial advisory services, and structuring advice, to both multi-national I grew up in Perth and joined PwC in management consultancy practices. and local investors. We have been Australia. I first came to Indonesia after We have about three hundred people involved in most of the large transactions the financial crisis in 1999, to assist the and eight partners fully dedicated to in the energy and mining sectors since local PwC team with a special audit of serving energy, utilities and mining the early 2000s, when there was a lot Pertamina, required by the IMF as part companies, where our major activities of turnover in ownership of oil and gas of their post-crisis funding to Indonesia. have included audit, taxation services, properties. For instance, we supported This was a short-term project, but given advice on mergers and acquisitions the CNOOC acquisition of Repsol assets. the expected development of the energy and IPOs, and strategy consulting. Our We also supported PetroChina when sector in Indonesia, I decided to stay consulting practice offers strategy advice they first entered Indonesia; as well as longer. on organisational structure, changes in many other direct foreign investors, business and some operational matters, with financial and tax due diligence In the early to mid-2000’s, there was a drawing on our deep knowledge from and financial structuring support. We lot of new investment in oil and gas and both Indonesia and other major energy have assisted several members of the mining, so it was quite an active period. and mining hubs, such as the US and Tangguh LNG Joint Venture since it was Australia. We are proud to be part of set up, and have also advised Pertamina For the last six years, I have lead PwC’s one of the largest global professional on several of their domestic and Energy, Utilities and Mining practice here services networks. This also allows us to international acquisitions. So, we have in Indonesia. bring in specialists as and when we need enjoyed many good moments over the them. last fifteen years supporting the growth What does PwC do within the oil and of the energy sector in Indonesia. Of all gas industry? Do you advise financing companies? the professional service providers here, 3232 SPE Java . Jan - Mar ‘‘1717 we’re probably the one that focuses “does the country need to invest in the government wants to change the rules; most on energy and mining. We have production of oil and gas and other fine. But it has to be for new PSC’s. always had a large client base in this energy sources, or is it going to be And the government has to stand as sector and have therefore invested time content being an importer and not one. From our survey, we see concern in thought leadership publications and maximizing its resources?” over the lack of consistency between other activities in the industry. government departments and between People are confident that resources exist central regional authorities; there is not We write a well-known Indonesian Oil and that it is still geologically attractive to always one voice from government. If we & Gas investment and taxation guide, explore Indonesia. But the environment look back in history, Indonesia pioneered which is now in its seventh edition. does not encourage exploration, and the Production Sharing Contract. It was a We also regularly publish a survey of so production continues to decline. good scheme for a country in an early investor perceptions of the Indonesian So, I think the question is not so much stage of development and with minimal oil & gas sector. We work closely with about self-sufficiency, but maximising infrastructure; meaning high investment the Indonesian Petroleum Association the benefit of Indonesia’s hydrocarbon costs for somebody to come in. In (IPA). I presented the results of our latest resources. addition, there was not a lot of local survey at the 2016 IPA conference, in a expertise at that time, so you needed panel session with the Minister of ESDM So, what are the key things that need to bring in lots of people and money and the Head of SKK Migas. to be resolved in Indonesia so that to build the industry. The PSC worked we can have a successful oil and gas very well for twenty or thirty years. It So, PwC remains active in the Indonesian industry? may need adjustment, but this should be oil and gas industry, providing advice done in consultation with industry, and for clients and also highlighting to without impacting existing PSCs. the government and industry where they could improve things to see more Another question is “does the capital investment in the sector. exist in Indonesia to finance the kind of investment needed?” PwC is well-known for its survey. Does it influence the way people in A fourth point of concern is whether the industry react? “outside the pure oil and gas regime, are investors comfortable with the rule It’s very hard to quantify the impact of Well, that conversation can last for several of law, the courts and the process for our survey. Obviously we’re in business, days. It’s a complicated discussion. resolution of corporate disputes?” so we like to keep our name known, and make sure our brand continues to The number one issue is bureaucratic All of these issues, and many others, play be associated with the industry. And reform, and better coordination between into the investment attractiveness of the because we have invested many years the different arms of government, both oil and gas sector in Indonesia. in this industry, we’ve collected a lot of the central government and the regions. knowledge, on regulations and what’s I think the government understands this What will be the impact of Gross Split? changing both locally and globally. very well. It’s been quite clear from the We have also managed to maintain way Jokowi has started his first term, I understand that gross split is essentially contact with the regulator, so we feel talking about bureaucratic reform, and a royalty scheme, and will no longer that we can act as a conduit between improving the investment climate. follow the cost recovery mechanism. the industry, which sometimes has its This will supposedly end bureaucracy own agenda, and the government, who The second point is contract sanctity. around tendering and contracts, PTK 007 may sometimes be suspicious of that and related regulations. agenda. We are seen as an independent Unfortunately, over the last few years, party (clearly our brand is based on our we’ve seen attempts to erode terms of For mature blocks with small exploration independence), so we feel that we are a existing PSC’s such as the introduction risk and investment, that might be a good proxy to raise issues based on facts of GR-79 and excessive monitoring of sensible way to go. My concern is that without criticizing either side. work programmes and budgets, etc. it may not attract investment in new These cause investors to delay projects blocks. The beauty of the cost recovery Does Indonesia need to be self and cause additional cost. When a scheme is early recovery of investment sufficient in oil and gas? company commits to a PSC, it is under costs once you enter production. This a certain set of economic terms. It is a necessary incentive for developing Indonesia is already a net oil importer. can calculate the return, and decide countries short of capital for huge oil and Soon it will be a net gas importer, and whether to invest, accepting the risks gas developments. But will companies by 2030 it may become a net energy around exploration, oil prices, etc, but still want to come and risk all this capital importer. So now is the time to decide not changes in regulations. So, if the on high risk exploration plays, with a SPE Java . JAN - MAR ‘‘1717 33 delayed timeline for capital return under Geothermal has massive potential in this the import of cheap LNG. So LNG is the gross split mechanism? This may country. Unfortunately, the investment highly likely to be part of the energy have a significant impact on the overall cost is higher than coal, so it loses out. mix for power going forward. I think the rate of return for the PSC, and may not If Indonesia wants to meet a renewable investment climate around infrastructure meet the investment hurdle rates for target within the overall energy mix, it for LNG, as well as shipping and logistics some multi-national energy companies. needs to support geothermal. Maybe is very prospective. For many years, not via subsidies, as they don’t work well. Indonesia should have been investing Will SKK Migas disappear? But via some sort of economic benefit to in its pipeline network, but the will was make geothermal competitive with coal. not there. There are a few in the national No, they’re not going to disappear. Unfortunately that didn’t happen over energy plan, but there doesn’t seem to Actually, people often raise this issue the last ten to fifteen years, the incentive be a lot of progress. So, I think that LNG in our survey when we talk to them. wasn’t there. The rules and regulations as well as mini LNG are prospective. SKK Migas has grown into a large weren’t clear enough on how and where bureaucratic machine, much larger than you can operate, and how the off-take Our lack of infrastructure makes the old BPPKA division in Pertamina would be negotiated. It should be clear developments high-cost. responsible for monitoring PSCs, at a now with the new geothermal law. The time of much higher production and a unfortunate thing is because of the lack Yes, this applies to oil and gas and bigger industry. Adding people to the of investment over the last ten years, mining. It sounds great to refine oil and organisation definitely adds bureaucracy, the power program will have to be process minerals in-country; adding cost and time. These people have to coal because nothing else is ready. So value to the product. But, if you mine in justify their jobs. we’re going to be primarily coal for the the middle of Kalimantan or Sulawesi, next twenty or thirty years, but energy there is no transportation infrastructure, The role of SKK Migas will remain demand in Indonesia will continue to port or power plant. If you are expected important. Under the gross split increase so the market is there. And the to invest in all of this as well as your mechanism, they may not be required to more we can convert to geothermal, mine, the whole economic proposition monitor cost in the same level of detail, the more coal can be exported. This will doesn’t work anymore. Some oil and gas but will still need to approve the technical benefit the country economically, as well projects face similar hurdles. side of work programs and plans of as environmentally. development, environmental permits, PSC extension is another concern? drilling permits and safety permits. Each CBM also has no movement on is an area for potential delays in projects development. What are the obstacles? Yes, a big issue is that most large PSCs – remembering also that there are often will expire in the next five years, such other ministries or departments outside Initially, interest in CBM was high and as CPI. The fact that the government SKK Migas involved in issuing some of some big players acquired licenses. I is not prepared to discuss, negotiate, these permits. understand that initial drilling indicated and conclude on those, years in that Indonesia’s CBM and shale gas advance, means that we haven’t seen How about geothermal? are more difficult to extract and not as any significant investment over the last plentiful as in other countries. Along few years. Aside from everything else, A lot of our work recently has been in with this, development costs are high, like the downturn of oil prices, the fact the power sector, following the big push meanwhile oil and gas prices are falling. that you don’t know whether you have from the government under the 35 giga- So for now, conventional exploration an operating license beyond five or six watt fast-track program. Coal will be the and production are cheaper than years means you cannot invest billions main fuel source in the near term. Natural CBM. Investment is likely to accelerate of dollars in any kind of development. gas is also going to play a significant role once people are comfortable with the We haven’t had much investment over - tenders are ongoing for natural gas regulatory side - if they invest their the last few years and we will not have power plants. But geothermal is taking a dollar, they know they can get a capital any until we get this right. The same long time to come to fruition - the main return. At the moment, we have to wait in mining - a lot of big contracts are operators today are the same who had for the regulatory side to catch up with expiring. those old contacts, like Chevron. People the idea. are looking at new licenses, but most of The government preference is for them are still in early stages and haven’t How about gas to LNG? Indonesian operators, particularly got to construction. Pertamina, to take over large blocks. LNG is an interesting topic, given The question is whether they have the Regulations have been the main issue, the limited pipeline infrastructure in technical and financial capability to since the government got its fingers Indonesia. It seems likely there’s going operate and finance such a large number burnt in the pre-crisis contracts. So the to be transportation of LNG between and range of operations. Hopefully the idea of a contract has disappeared. islands and regasification and potentially Ministry of Energy takes this into account 3434 SPE Java . Jan - Mar ‘‘1717 in making decisions on extensions. What is your advice for these young and export revenues. But investors need Otherwise, we’re going to see falls in members? certainty and they need capital return. production. It’s a matter of getting the fiscal regime I think that oil and gas and energy are right. If Pertamina is going to take over, it’s still prospective industries, both in better to know years in advance. Many Indonesia and globally. Our need for Our messages and suggestions as blocks have long term operations, so energy is not going to diminish, it’s reflected in our industry surveys, have they need investment just to maintain only going to increase. Despite the talk remained substantially unchanged for operations and to maintain safety and of depletion of reserves, technology many years. People acknowledge the environmental standards. How can you improves, allowing us to develop new situation, including some in government. spend that money if you don’t know methods to find and extract; so I don’t But implementation always seems to be whether you get it back? think it’s a dying industry by any means. the issue. We talk about replacing oil and gas for Is there parts of Indonesia still not our electricity and motor vehicles, but Okay. Serious question, what’s your explored? we use oil in almost every product and favorite Indonesian food? that is not changing any time soon. So, From a geological perspective, clearly the industry will continue to evolve, the I like almost all. My favorites are anything Indonesia has a lot of opportunities. And skills that people need to learn and the with soup, like sop buntut, soto betawi: there are investment dollars available, study that they’ll do is going to change. any kind of soto. so when the oil price ticks up and the They may not be talking about a career exploration starts again, the majors will sitting on a rig somewhere. It could be a I have spent a lot of time in Jogja. There go to places that will give them the best completely different career, but I say that is a small place there, which has a very return. And Indonesia may not be at the the oil industry itself will remain strong. good Soto Kudus. I don’t know the name, top of that list, that’s the concern. But, the because it’s on the street somewhere. good thing about Indonesian engineers How can SPE help? I’m a big believer in eating local food is that they are highly respected globally. because food from hohomeme nnevereverer ttastesastes This is one industry where Indonesia has Industry associations like SPE and IPA quite right. Hahaha.. a good reputation from operating for and independent parties like us at fifty years. PwC, and need to keep hammering the message that there are very prospective SPE Java has three thousand student industries here that could greatly benefit and young professional members. Indonesia in terms of jobs, GDP growth SPE Java . JAN - MMARAR ‘17 353 VVijayijay KKrishnanrishnan hanks for coming Vijay. To start, price has a negative correlation to the could you tell us about yourself? US dollar. And I’ve learnt that oil prices, just like for other commodities, overreact ThanksT for having me and for the in both the upward and downward sometimes can drive prices down, as they opportunity to participate. I am an directions. can profit from hedging their trades. The economist by training. I fell into the oil end result is a price accelerator in both and gas industry almost 20 years ago. My I would encourage readers to understand directions. But we need this to enable career started in oil markets: as an analyst that the oil industry is a cyclical industry liquidity in this industry. covering the crude oil price market as but an industry that’s here to stay. When I well the refined product markets. Over joined in 1997-1998, everyone asked why What were highlights in 2016 and the years, I have been in a variety of I joined the oil and gas industry, as it is a what’s coming up? roles, mostly in business development for sunset industry. I think we have all proven research and consulting companies. that is wrong. I can safely say to students It’s hard to find a highlight in 2016, only in a petroleum or engineering program, low-lights with very low oil prices in Q1 What I enjoy the most is the client-facing don’t lose heart and carry on because and Q2. Happily, I think that the worst environment. So although I am an analyst this is an industry where you can learn & is over. Companies that survived have at heart, and I enjoy looking at facts and grow. emerged stronger so that’s a good thing. numbers, ultimately, I think what drives We have plenty to look forward to in 2017, me is to provide solutions to clients that due to increased prices, and also because work in the real world based on sound YourYour futurefuture isis basedbased onon many companies have consolidated and data and good evidence, because at concon nuouslynuously improvingimproving become more focused in what they need the end of the day you want to make yourselfyourself toto pickpick upup to do, so they can benefit from higher oil informed decisions. newnew sskills,kills, llanguage,anguage, prices. computercomputer pprograms,rograms, It’s interesting that you started off andand thinkthink long-termlong-term In 2016, the number of discoveries in the industry working numbers, was the lowest in 50 years, and especially the oil price. Why does the projects were delayed or scrapped. Do oil price go up and down? My key thing is we need to be innovative. you think the current $50 oil price is We need to learn as an industry to thrive enough for companies to start picking I wish I could tell you the oil price on $50 oil. Our house view in Rystad up their projects? tomorrow - if I could then I wouldn’t Energy is that oil will trade in the high be sitting here. No-one has been able 50’s this year because of the demand and Yes, 2016 was the low point. We are to reliably forecast the oil price, key is supply. currently analysing where projects are getting the trend right. being sanctioned and the number of You said the market overreacts when projects in Asia Pacific. We are confident The crude oil market is complex with many the oil price goes up or goes down. to see more projects being sanctioned players and many derivative products. Can you elaborate a little bit more? this year compared to last year, because There is no single price-maker. OPEC of the recovery in oil prices, and also tries to play that role and they have a On the way down, caution takes over as because E&P companies that survived significant impact. But ultimately, my view people cover their positions. On the way have restructured and recapitalized and Rystad’s view, is that the long term up, caution goes to the wind. Remember themselves. They are now in a position oil price is driven by demand and supply. that the crude market is largely driven by to take advantage of lower costs of It’s a homogeneous product with many paper trades. From 2006-2007 right up materials and services, and can assume a parties transacting both at the physical to the 2009 financial crisis, the oil price higher oil price outlook. It may not be an level as well as on the paper side. In the contained a 25-30% premium, driven easy sell to shareholders, that’s the role short term, geopolitics dictates where the by paper trades and not by the long of the management teams to focus on price goes. Forex also plays a role, as oil term fundamentals. Those same players delivering those new projects. 36 SPE Java . Jan - Mar ‘‘1717 The pickup in activity should be stronger provide different in Australia Indonesia and Vietnam in the terms and clarity Asia Pacific region. around those terms and incentives. Get Is South East Asia still interesting? this right and more people will SE Asia is still a very prospective and participate. popular destination for many companies looking to invest in that space. From Indonesia is a hydrocarbon perspective, Vietnam, always on the global Malaysia, Myanmar and Indonesia are all list and will always be looking good. attractive to investors, but I wouldn’t I am happy to hear you are bullish say that Indonesia is above Vietnam or about Indonesia. This is particularly But cheap oil and gas has been found Malaysia. I think it depends on what you important for students who are and produced. SE Asia is entering into a are aiming to do, what kind of company graduating or have graduated and mature state, like where the North Sea was you are, whether you are focusing on still looking for jobs. Do you have any 15-20 years ago. What happened there mature assets, deep-water and so on. suggestions perhaps what they should is happening here. Majors refocus from do, or do you think there is still hope in mature assets to new big projects where I think where Vietnam and Malaysia is the oil and gas industry? they can add value by applying their doing very well right now is deep-water deep knowledge and new technologies. as they offer slightly more attractive Of course there is hope! Oil and gas are So this creates opportunities for regional terms. As an investor, you always want fundamental drivers of growth around and smaller companies to pick up mature better terms. At the end of the day, every the world. Slow-down in the oil and gas PSC’s and extend their life cycle through government has to balance how they industry is the reason why economies lower overheads and increased oil maintain their attractiveness and yet get around the world have not performed recovery though EOR. Most importantly, a good return on assets that need to be as well as they should have despite they bring focus-which can produce great explored and developed. low interest rates. When the oil price results. increases, we will see the rest of the More important than fiscal terms, economy moving again as investment Which countries are doing it right? Indonesia needs certainty and clarity. picks up. Oil and gas involves high capex and In 2014-2015, Malaysia excelled in repayment is long-term, so certainty over So to students in oil and gas, I would terms of exploration and discoveries, that time frame is important. encourage my personal mantra of a reward for their encouragement of continuous improvement in all you do local companies to pick up assets too What do you hear from investors and keep on working on your skills. Your small for Petronas. Petronas refocused about contract expiry? future is based on the skills you have and on complex projects that required large these come through working on things capex investment. Investors know that expired licences will and continuously improving yourself to return to the government, and they have pick up new skills, language, computer Vietnam, on the whole, is investor-friendly no issue with that. They have always programs, and think long-term. The oil and not entirely mature - some basins are known that since they signed their and gas industry is here to stay. Low oil developed while others still offer a lot to contract 30 years ago. Actually, Indonesia prices mean we need to continuously find. Vietnam is growing rapidly. GDP has maintained contract sanctity for the innovate and improve, so we will be able growth has been high single-digit last longest time. to enjoy the fruit of our labour even at year and expected for this year. Given the $50-$55 oil. That I think is the key. strong correlation between GDP growth More important is how do you turn and energy demand, they will need all the around exploration? Indonesia still Everybody is of course very hopeful energy they can get. So they encourage has a large undiscovered resource that oil price will bounce back. What investment, and the government along potential, especially in deep-water. For happens if it goes down? What would with PetroVietnam are open to discussion me, that’s where large companies should be your take and suggestion to with investors as they recognize that one play a critical role to find and develop companies or professionals? size does not fit all - onshore vs. offshore resources. They would bring in resources and shallow water vs. deep water. and capability and employ Indonesians Oil prices will continue to fluctuate up Different things are needed to attract to grow the economy at the regional and down, and the market will always find different types of player. People who want level. The government needs to be more a balance. But if you believe our approach to extend the life of mature assets are not encouraging to facilitate big discoveries which is driven by the fundamentals and the same people who want to explore in that could turn around the declining break-evens, then the market has found deep-water. So it’s about being able to production in Indonesia. its balance point above $50. SPE Java . JAN - MMARAR ‘17 373 Technical Discussi0n Group WWhyhy GGovernmentovernment OOfferffer TThehe GGrossross SSplitplit SSchemecheme FForor NNewew BBlocklock CContractontract FForor OOilil & GGasas full room of over 50 SPE members moved from West Indonesia to the risker attended our first TDG session of and costier East Indonesia, especially in 2017 on 16 Feb 2017 in Bakrie deep-water areas. towerA in Kuningan. Then Pak Joko moved onto the evolution Gross Split, a hot topic, kept the of the Gross Split. He explained that the audience’s full attention on the fixed and variable percentages in Gross presentation and Q&A. Split (see tables on the next page) arose from thousands of Monte Carlo simulation Our speaker, Pak Joko, shared his of cashflows from ten different fields, a knowledge and insights as an inside mix of mature and new development, oil member of the Gross Split team that and gas, onshore and offshore, intended worked long hours in the month to cover all combinations of operating preceding release in mid-January of the environments and maturity. The aim PerMen. This shone through in his talk, was to achieve an IRR of 15%, which was which was deep and practical, not just considered attractive for investors. theory and thoughts. Interestingly, as variable gross splits are PSC renewal (30-year-old PSC’s), the He started with his perception of why cumulative, a theoretical deep-water Contractor can choose either Gross split Investors have stayed away from block unconventional project could have the or Cost Recovery. bidding rounds in the last two years, even highest gross split. though the government has lowered the Pak Joko’s hot topic and interactive signature bonus, firm commitments and In the next few years, probably only presentation inspired the full room to government split. The he moved onto Pertamina will adopt Gross Split, respond with deep questions on the why it takes on average 15 years from on receipt of all terminated PSC’s philosophy and mechanics of Gross Split, discovery to first oil or gas. And then he (50-year-old PSC’s). New PSC’s will energized by delicious Nasi Ulam chosen explained that exploration activity has also automatically be Gross Split. For by Ibu Mega. 3838 SPE Java . Jan - Mar ‘‘1717 Base Split Type of Incentive Variable Split TypeofIncentive AdditionalContractorSplit Government Contractor <5% 0.0% Oil 57 43 5%= Type of Incentive Type of Incentive Variable Split Variable Split TypeofIncentive AdditionalContractorSplit TypeofIncentive AdditionalContractorSplit PODI 5% <30% 0% Block PODIIdst 0% 1 30%= Type of Incentive Type of Incentive Variable Split ProgressiveSplit TypeofIncentive AdditionalContractorSplit TypeofIncentive AdditionalContractorSplit <40 7.5% 3 Reservoir <=2500m0 40= SPE Java . JAN - MMARAR ‘17 393 dISTINGUISHED lECTURER CCreatingreating ValueValue fromfrom UUncertaintyncertainty andand FlexibilityFlexibility n eclectic group of 19 SPE And then he floored us with actual cases projects for flexibility such as adding a members from 16 companies where 45% of projects suffer costs above massive 2500 m2 of empty deck space travelled to the EMP office in the “base-case plus 20%” high-side on a Norwegian offshore platform ABakrie Tower on 16 March 2017 for a commonly used. development to allow extra equipment delicious Padang lunch and to catch up to be installed in case of early water with colleagues and friends. And it gets worse, 45% of projects suffer breakthrough. production below the “base-case less But what really attracted us to gather 20%” low-side commonly used. Professor Bratvold’s key message is that was our distinguished lecturer, Professor reducing uncertainty is good, but more Reidar B. Bratvold from the University of So facilities engineers are no good, and important is to allow for uncertainty in Stavanger in Norway. reservoir engineers are no better. your design and operation and therefore economics. This aids decision making. Professor Bratvold is a towering light in He then listed the causes, with are the SPE community and a world authority reluctance to embrace uncertainty, failure The energetic audience machine-gunned on assessment of risk and uncertainty. to track estimates, and sweeping bad Prof Bratvold with a barrage of questions news under the carpet with excuses like for 40 minutes, particularly about the He shocked us with his first slide, showing “bad weather”. human element, such as aversion to risk, that the NPV of projects decreases by protecting your project, performance an average 35% when reassessed two He explained how to generate a range of ratings and unknown unknowns. years after project sanction. That is, unbiased oil price forecasts using history they suffer from value destruction from and futures. Professor Bratvold’s presentation is a combination of missed schedule, cost available for download on the SPE Java blowouts and poor early production. And also how to add value by designing website. 40 SPE Java . Jan - Mar ‘‘1717 %a%& SPE Java . JAN - MAR ‘17 41 22017017 PPresidentresident SPESPE InternationalInternational JJaneenaneen JJudahudah VVisitsisits JakartaJakarta & DepokDepok ne historical moment has come again to our home, Universitas Indonesia. SPE UI SC collaborated Owith SPE Trisakti SC were honored to host and welcome President International SPE 2017, Janeen Judah on 28th February 2017, at K301 building, Faculty of Engineering Universitas Indonesia. It was part of her visit to Indonesia including Sumatra and Kalimantan Section. For around 20 minutes, this event opened beautifully with traditional dance from Aceh, Saman Dance or has become well- known abroad with the name “Thousand Section), Prof. Ir. Sutrasno Kartohardjono, & Gas sector. Hands”. This performance symbolizes as M.Sc, Ph.D (Head of Department Chemical warm greeting to celebrate Judah’s visit Engineering UI) and Ms Mega (SPE Java Zaki Zahirsyah, as President of SPE UI to Indonesia and to bring entertainment Section’s Section Officer). SC 2017 said the President International to all participants. visits show a shift in the relationship of In her speech, Mrs. Judah shared about student chapters as an important part of This event was also attended by Mr. Salis how SPE International contributes in oil SPE International. One serious note, he S. Aprilian (President Director at PT. Badak and gas industry and facing the up and believes this occasion is a culmination LNG and Director of SPE’s South Asia down oil pricing, she also mentioned for SPE UI SC and SPE Trisakti SC to strive and the Pacific Region), Mr. Andrew Law about her career pathway until present excellence between student chapters, (General Manager Weatherford Indonesia and engaged students to keep learning as last year both student chapters and Java Section’s Vice Chairman), Mr. because in her point of view, she claimed were awarded the prestigious 2016 Muhammad Titis Redjoso (Student that the industry still has a bright future Outstanding Student Chapter Award. Chapter & YP Chairman for SPE Java for students to pursue careers in the Oil (Glory Lamria) 42 SPESPE Java Java . Jan. Jan - -Mar Mar ‘17 ‘‘1717 SPE Java . JAN - MMARARA ‘17177 434 22017017 SPESPE INTERNATIONALINTERNATIONAL PRESIDENTPRESIDENT VVISITsISITs bandungbandung rs. Janeen Judah, the 2017 Endurance, and Empowering. Excellence She also told us that we should not get President of Society of is that we should be outstanding at embarrassed if we get a job which is not Petroleum Engineers (SPE) the job that we handle, differentiate our dream job, since it also will enhance InternationalM visited Bandung to share ourselves in the competency aspect, our skills and experience no matter what. about her experiences to the members of increase our presentation (one of the SPE ITB Student Chapters. This event was main important skills that we should After she shared her experiences and conducted on Wednesday, 1st of March have) and technical skills. The main thing stories, the question and answer session 2017 in Hall of Energy Building, ITB. The that should be highlighted is confidence. began. Many of the participants asked participants came not only from ITB, She shared about how confidence will her about SPE such as vision of SPE for but also from Padjajaran University and affect many aspects of life. The second campus, oil and gas industries condition Diponegoro University. one is endurance. Endurance is what we like how is the condition of open need to have a good leadership, team recruitment, when will the oil and gas Janeen gave a lot of lessons and advices building, and decision making. Last but prices go up, and about her personal for us, the young generations who are not least is to empower ourselves and experiences. pursuing a degree especially in petroleum others such as building our own network, world. She talked about the current and also to nominate & to In the end, through this message we condition of the oil and gas advocate. would like to cordially express our industry. The downturn that gratitude to Mrs. Janeen Judah for her we are facing currently didn’t She gave us her visit to Institut Teknologi Bandung and happen only once, but this opinion what should for everything that she has given us to is a cyclical business. Back we do in this kind motivate us for our future in oil and gas in 1980s there was a dip in of oil price era. industry. oil price where there was a big freeze in hiring, but we should not get disappointed since the industry will come up back. The frenzies year came on 2003- mid 2014 where oil was booming again and there was an increase of hiring and demand of petroleum engineering students. One of the main lessons that we got from Janeen was about her general advice for career, which is the 3E: Excellence, Medika, Salis Aprilian, Janeen Judah, Andrew Law, Felany Wijaya and Teguh 44 SPE Java . Jan - Mar ‘17 OOVERVIEWVERVIEW CCOMPETITIONOMPETITION he very first Conference Overview of global issues, and the chance to make was held on February 23rd 2017. The new friends and relations. The speaker, rehearsal invited Ms. Putri Fakhiyatul Ms. Putri Fakhiyatul Ulya was introduced UlyaT as the only main speaker. The event afterwards then started her presentation. was started at 7 pm by moderator, Elsa. She explained the basic introduction of After a short opening, Mr. Deo Reynaldo MUN Conference such as what Model Alwi gave a very warm speech as President UN was and how we might sign up. Most of MUN. She presented the mechanism of of SPE UNDIP SC 2017. This event was of all participants were excited since MUN conference based on the video to facilitated by SPE UNDIP SC to embark all they were doing MUN for the first time. all participants during about 40 minutes members on a life-changing journey that Then, she played a video, “Model United followed by Question and Answer would help them to develop confidence Nations: How It Goes” as a comedy sketch section. Then, MUN Simulation was in leading others, a stronger awareness of what usually went on in an assembly applied during about one hour where all participants played the role of delegates from different country and attempted to solve world issues with kind of policies and perspective then represented their working paper. It was clearly seen that all participants dived right by participating well as diplomat. As conclusion, Ms Putri Fakhiyatul Ulya urged those who might have interest to prepare and improve the performance in order to be better delegate since it depended on certain fundamental skills. Subsequently, the event was closed by Mr. Deo Reynaldo Alwi to give award plaque to the speaker. SPE Java . JAN - MMARARA ‘17 454 PPUBLICUBLIC SSPEAKINGPEAKING CCLASSLASS he first ever SPE UNDIP SC public speaking class was successfully held on 4th of March 2017 inviting Mr.T Indra Setiawan, former delegates of London Model United Nations 2014 and Mr Hara Paradisa, the local committee president of AIESEC UNDIP 16/17 as the main or guest speaker of this event. The event was started around 8:00 am by Tri Hanly Maurice as the master of ceremony of the event, delivering the detail rundown of this event. Afterwards, the safety induction or famously known as the HSE procedure was conducted by Mrs Nadia Dwi Ayu to ensure the safety of the participant inside the room in case of an unlikely emergency event by telling some secure spot to evacuate around the building. Then a warm greeting speech was spectacularly delivered by the vice president of SPE UNDIP SC Mrs. Medika experiences, he stated the importance which is Mr Hara Paradisa to perform on Sihombing, as a representatives due of public speaking, why we should be stage. The local committee president of to the absence of our President Mr. equipped with these kind of ability and AIESEC UNDIP 16/17 gives an opening Deo Reynalwi Aldo on this event, then how will it effect on our communicating about his past experiences dealing with followed by a speech delivered from the skill making us easier to apply jobs for an uncomfortable situation when he was Project Manager of this public Speaking our better future. When the question and not that confident to speak up in front Event, Hanif Noer Fachrie. answer session was opened, it’s not really of large audiences. He strongly believed surprising that a lot of participant raise that it doesn’t matter if we didn’t really After all of the opening speech, the master their hand to fulfill their curiosity inside have a proper English grammar when of ceremony introduced and invited Mr their head regarding the topics they just we have to deliver a topic in English in Indra Setiawan to go on stage to deliver heard although the master of ceremony front of people. What he really believed the public speaking class material. The only give 3 question to be asked. The is that we have to get rid of our fear and material was tremendously delivered by material was well delivered in about an just speak it up in front of the audiences Mr Indra Setiawan, making the audience hour. so that it will significantly increase our more engaged to the topic. As one public speaking skill. After the question of the infamously representatives of After Mr Indra’s session, the master of and answer sessions, the master of the London Model United Nations with huge ceremony introduced another speaker ceremony closed this event formally. 46 SPE Java . Jan - Mar ‘‘1717 EExpandxpand thethe AbsoluteAbsolute andand PositivePositive ImpactImpact aass ReputableReputable StudentStudent ChapterChapter ##RiseTogetherRiseTogether s the one of the biggest SPE principles, there are Quality, Creativity, of respect and appreciation as main Student Chapter in Java Section, and Respect, all of that represent the principle. UPN SPE SC has massive mission to values of Professionality. With quality, we expandA and share the good impact for all always keep an eye on every events that Our slogan for 2017/2018 period is Rise students and professionals that concern we held. Every department in UPN SPE Together, it means that we want to share in oil and gas industry. Introducing our SC have Standard Operating Procedure our experience in SPE to the member, new period, UPN SPE SC 2017/2018, we as the guidance for all boards. The way even more, to the society. SPE Class, SPE want to bring our SPE Student Chapter we empower our member, the way we Meet the Member, Benefaction Month, to the next level. By this period, we make propose and excecute the programs, and and SPEEDFEST 2017 are our strategic some breakthrough program to reach the output of every SPE programs are the media to achieve that goals. In 2017, we the higher goals. We’ll approach our main factors to develop. Creativity, We started to introduce our student chapter member directly, and make sure they can dont stop to create new things. In UPN to the other major outside Petroleum take their benefits as our member. We SPE SC, be innovative is a must. Without Engineering. This is the first step of realize that our roles as student chapter innovation, we are same like the others. UPN SPE SC to expand the impact and are to connect member to the real But we are different, we are prominent. educate the people about energy issues industry, educate them with resources 2017/2018 is the period that has many and explain about what we can do as that provided by SPE, and always spread breakthrough programs to be held. This undergraduate student to deal with that. the positive energy to the society. With is the evidence of our commitment to more than 990 student members in 2016, create new innovation and develop our Finally, as a student chapter, UPN SPE that comes from multi-major not only value as SPE Student Chapter. Respect, SC always commited to become the best from Petroleum Engineering, we believe We realize that respect is significant factor resource for member in every stages of that we have responsibility to serve them in organization that can give positive their careers. We have massive mission all equally. The real evident that we could integration between the people involved to support, educate, and elaborate give to our member is to serve and deliver there. In UPN SPE SC, as a team we always member with the facilities that provided the benefits directly. We always innovate respect and appreciate our partners. This by SPE International. At last, we believe to improve the way we serve our member make our working experience in UPN that to chase our goals and to fulfill our and meet the level of excellent. SPE SC become a great opportunity to responsibilities we have to RiseTogether! implement every single idea from our As student chapter, UPN SPE SC has 3 main board. Because here, we put the value SPE Java . JAN - MAR ‘17 47 PPAPERAPER TRAININGTRAINING hat are the important things will be the screening of the abstract, and participants who feel the excitement of that students needed to the last class is the continuous guidance writing the paper. This is a good sign that compete in the modern energy for selected persons, and they will be shows UPN SPE SC’s goal for running this Wsectors? Students who are concerned prepared to become delegates of our event. especially in Petroleum Engineering need University particularly as International to thrive a culture of writing scientific Paper Presenter. So, this is one of many ways from UPN papers. So, to provide the necessary in SPE SC to educate their boards and increasing the proficiency of writing the “As the future of our nation oil and gas staffs, to face the challenges at the paper paper, UPN SPE SC held an event called engineers, we are not only creative but competitions or conventions in the future. Competition Course “Brace Yourself as also need to know how to pour out UPN SPE SC wants all of their boards to The Brightest Generation in Oil and Gas our ideas at a very best level,” said Mr. have the capability in writing paper as Industries“ was managed by Mr. Adnan Suranto while delivering the lesson of the professional by adding some novelty at Garry as a project officer. This event has competition course. He also added that their creation. It will be a very important been run on March 5, 2017, at Petroleum in writing paper, there is a lot of things thing to write paper which we learned Engineering Department Building, UPN must be considered. Moreover, the writer with high-quality method. “Veteran” Yogyakarta. should attach some novelty in their paper. “Novelty” is the element of something Competition course is a training in which that just updated. So, the paper writer we gain knowledge of the steps and that has a novelty will be more attractive. manner of making a scientific paper to warm up our boards and staffs to This internal event creates a lot of We as the future of our nation compete in national or international enthusiasm from the boards of UPN oil and gas engineers, paper competition. The lecturer of this SPE SC. It was showed by the total of we are not only creative, course, Dr. Suranto. ST. MT was a well- the participants and the questions were but also need to know known an active paper writer in the thrown by the audience. For example, the how to pour out our ideas International Journal Publication such as question that has asked by Mr. Haidir, at a very best level Onepetro. “Could a novelty be a comparison of some (Dr. Suranto. ST. MT) method that has a similar problem?”. The goal of this event is to guide all This question was answered steadily by boards of UPN SPE SC to write a paper Mr. Suranto who said, “it is a valid way, that later will be selected into “Top Five as long as the writer develops new ideas Best Abstract” in which that all boards to solve the same problem”. such a very and staffs are very competitive to show professional way to answer the question. their best. The first class is the beginning of writing paper, then the second class After the event, there were so many 48 SPE Java . Jan - Mar ‘17 TTHEHE OOVERVIEWVERVIEW AABOUTBOUT MMDTDT SSAMPLINGAMPLING AANDND LLIVEIVE FFLUIDLUID AANALYSISNALYSIS FFROMROM SSCHLUMBERGERCHLUMBERGER FFIELDIELD EENGINEERNGINEER oards & Staff UPN VY SPE SC 2017/2018 Period have so many breakthrough events. SPE Class is Bone of the breakthough event. We believe that as a student chapter, UPN VY SPE SC has responsibility to educate our member and always give absolute and positive impacts to the society. We have to serve our member directly and let them know exactly, what are the benefits that they can get as a member of SPE. The concept of SPE Class is an open class which means that everyone is free to come. With SPE Class, we want to meet our member directly and share benefits • Accurate real-time pressure formation dynamics tester. In addition as SPE member at that time. This program measurements and permeability to differentiating hydrocarbon types, the will invite everyone who want to share measurements from high-resolution LFA analyzer detects and measures the their knowledges and experiences with gauges and precise flowline control dissolved methane in the live reservoir our member. Undergraduate and Post- to ensure monophasic flow. fluids, which have remained in a single Graduate Student, Former of SPE, and • High-purity and -quality reservoir phase under pressure. also Professional can be our speaker in fluid samples for downhole fluid SPE Class. analysis (DFA) or further PVT First edition of SPE Class was attended laboratory analysis. by 25 members and also former boards The first edition of SPE Class was held of UPN SPE SC. They are so interested in December 28, 2016. This first edition The MDT wireline formation tester with SPE Class because they can learn the concerned about technical presentation makes real-time flowline resistivity latest technology that applied in the real with professional Field Engineer from measurements at the probe module to field directly with the expert like Mr. Sakti. Schlumberger Mr. Aditya Ekabudi discriminate between formation fluids We hope this program could bring more Pancasakti as a speaker. He give the and filtrate from water- and oil-base advantages to our member, not only in presentation about “MDT Sampling muds. Formation fluid is excluded from technical knowledges but also softskill and Live Fluid Analysis”. This theme is the sample chamber until a sample with and non-technical skill. the hot topics in formation evaluation an acceptably low level of contamination because this is the latest technology that can be recovered. applied by Schlumberger to analyze the characteristic of the formation efficiently. The modular design of the MDT formation dynamics tester makes it easy MDT which stands for Modular- to meet the exact needs and goals of Communication formation Dynamic Tester is Wireline your data acquisition program. Flexibility – the human connection – formation testing for high-quality fluid is designed in for compatibility with is the key to samples and real-time reservoir pressure almost all Schlumberger measurement personal and career success measurements. With this tool, the technologies. Modularity also enables (Paul J MeMMeyer)yer) engineer can meet the exact needs and evolving the MDT tester as new goals of the data acquisition program measurement techniques, technologies, with the readily customized MDT modular and options are developed. formation dynamics tester system. In one trip, you get the representative data you The LFA live fluid analyzer analyzes fluids need for timely decisions: as they flow through the MDT modular SPE Java . JAN - MAR ‘17 49 BBee ExtraordinaryExtraordinary Gentur are to take all opportunities and to TThroughhrough SPESPE not hesitate to join competitions. The second speaker was Mr. R. Aburizal Valdi, a student from Petroleum Engineering UPN VY batch 2013 and also was a former board of UPN VY SPE SC. He showed up with his presentation’s tagline “Grow a Champion on You”. He wanted to encourage the participants to be more active as a student in the campus, including in SPE membership. He said that when he was a freshman, Mr. Gentur and he had the same thought. They stated that he didn’t want to be an ordinary student. He wanted to be a student with a lot of achievements. PE provides its members with a that came from the participants made So in order to achieve what he declared as variety of facilities that can help them still wanted to come to the SPE Class. his goal, he started his effort by joining oil them to broaden their knowledge The participants were mostly from the and gas poster competition. Unfortunately, Sand relation. In many cases, we find these Petroleum Engineering UPN VY especially he didn’t win. Then in his second year, Mr. facilities very beneficial but there is also from batch 2016, the first year student. One Aburizal Valdi joined smart competition a good number of our students who are of the participants, Bintang, said “I want to with Mr. Gentur. He took 3 losses in 3 still lacking of clues on how to optimally come to this event because I want to know different competitions before getting use these features. UPN VY SPE SC see more on how to maximize the benefits his first win in smart competition. Then this as something that should be carefully SPE membership. Although all students he won paper competition alongside his handled. After all, one of our focuses is to of petroleum engineering are already senior. After that, he asked his senior for serve our members. And so we created SPE registered by the SPE Boards, some of the the permission to redevelop his senior’s Class #2 in order to educate our members students still didn’t know how to maximize paper and he wanted to present the paper and to carefully guide them into greatness. their SPE membership”. The event started himself. After developing the paper, he at 7 p.m. with the opening speech from Mr. submitted it to a paper competition and On February 24th 2017, we held the SPE Irfan Maulana as the president of UPN VY he won. It does not stop there, he also got Class #2 “Advantage Enhancements of SPE SC. He announced that SPE Class will a chance to present his paper in IPA. He Joining SPE Membership”. SPE Class #2 be conducted once every month due to said “if you want to be an extraordinary event was managed by Mr. Nathanael the high-enthusiasm of the participants to student, you have to be more active in Romy as the Project Officer. Although it was join the SPE Class. both academic and organization. You a rainy day, the enthusiastic atmosphere should have a good time management, The first speaker was Mr. Gentur Wikan don’t hesitate to join any competitions, Wijayanto, a student from Petroleum and don’t give up so easily”. Engineering UPN VY batch 2013 who is also a former board of UPN VY SPE SPE Class #2 ended at 9 p.m. and was SC. He gave tips on how to optimize closed by a photo session. The participants SPE membership to the participants. He were satisfied with our event. They learned insisted that members of SPE should look a lot about how to maximize the SPE into SPE International Star Scholarship, Membership from Mr. Gentur and learned E-Mentoring, Webinar, Online Courses, to be an extraordinary student like Mr. R. SPE Volunteer and other SPE facilitation. Aburizal. It was such an inspiring event, Mr. Gentur showed the participants his especially for the first year students who achievements such as being an awardee still have a very long journey ahead. of SPE International Star Scholarship 2015, participating in IPTC in Bangkok, and being 1st Runner Up in Petrobowl APOGCE 2015 in Bali. He stated “if I didn’t try to submit SPE International Star Scholarship, maybe I would be an ordinary student without anything to be proud of”, “This scholarship I can accept failure, triggered me to get more achievements everyone fails at something. and made me a person I am today”. The But I can’t accept not trying. keys to be successful according to Mr. (Michael Jordan) 50 SPE Java . Jan - Mar ‘17 NNewew PPeriod,eriod, NewNew Crew,Crew, aandnd NNewew SSpiritpirit PN “Veteran” Yogyakarta SPE SC from January 2017 starts a new face period. In the until December 2017. beginning of 2016/2017 period, With bringing our spirit fromU January 23rd 2017 until January RISE TOGETHER, all 24th 2017, we held a Leadership Training the boards must have in Villa Kepodang, Kaliurang, Yogyakarta. same vision and mission This event is an annual event programmed with the president, so by UPN “Veteran” Yogyakarta SPE Student that when we do the Chapter to introduce and remind our programs, we have the identity, how do we work, how we solve same passion. Next, a problem in our best ways to our boards. the presentation about “Our Game Rules event, we also got special guests which The special thing in this period, UPN in SPE” by Mr. Haidir Fajar Harsono as was our formers. There was Mr. Lervino, Veteran SPE SC not only recruited the new the new minister of HRD Department. Mr. Ferdi, Ms. Afi, Mr. Gentur, etc. In this boards, but also staffs. We widened the The presentation continued, there was session, they shared their experiences opportunity for the students to work and presentation from each officers and when they became a board and also kept get great experiences with us. The main departments. Each officers and ministers motivate us to enhance the passion in SPE. goals from this event that the new boards explained about the main job desks, what Meet with formers is a consistently existing can adapt quickly, getting know each should we do, and also what breakthrough event, so we can keep a good relation with other more between new boards & staffs idea we can bring in this period. The our formers. and old boards, and the most important treasurer tasks presented by Ms. Aulia Nur is to make the all boards and staffs feel Annisah, and then followed the secretary In the morning, we had outbound activities. comfortable and knows the goals for make tasks presented by Mr. Alfiza Danistya With a chilly atmosphere, we did much fun UPN “Veteran” SPE SC always get a better Suseno, HRD Department presented by games. This activity made our bond and performance. Mr. Haidir Fajar Harsono, Public Relation teamwork between new boards and old Department tasks presented by Mr. Adiasa boards stronger. Last, at 11 o’clock, we This event started at 4 o’clock in the Dewa Pradipta, Event Department tasks went to our home. This Leadership Training evening, opened by our newly elected presented by Ms. Antonietha March, was a new experience for the new board president Mr. Muhammad Irfan Maulana. and CMR Department presented by Mr. and a reminder for old boards to keep the He explained about his annual programs Muhammad Fidi. spirit on. The experiences from our former make our hope grow and believe that When the time was at 7 p.m., we started we can learn everything to prepare our to announce the position of each new future. Of course, it will not easy. Making boards. This session was the most-waiting adjustment, forcing ourselvesrselves to ddoo mommore,re, session. Some of them trusted to be a trying something we nneverever dididd bbebeforefoorre is deputy in a department. Our new boards the examples of a hard roaroadd wwe mmayay ffind.ind. felt excited with their new position. After But we do believe, this lleadershipeaddership ttraining,raininngg, the announcement, we had a time to this organization, this communityommunnity iss a ggateatte discuss within each department in order for to make ourselvess bebetter,ttter, prprepared,reparedd, to build the work-synergy in SPE. In this and ready. SPE Java . JAN - MAR ‘17 51 GGREETINGSREETINGS FFROMROM EENVIRONMENTALNVIRONMENTAL AANDND IINFORMATICSNFORMATICS EENGINEERINGNGINEERING eet The Member was one of It could be easily observed through and bonding formed among them. many interesting events held by the many questions thrown during the UPN SPE SC. This event was one question session despite the fact that we The next meeting was held at UPN ofM various breakthroughs in this period previously had it limited to 3 questions Informatics Engineering Building. It and had never been held before. Through only. Their enthusiasm did not stop there, started at 4.30 P.M. and we delivered the this event we also had the opportunity to as soon as the meeting was officially same information to the participants but socialize SPE membership benefit. ended the participants immediately the atmosphere that we had seemed so approached us to ask questions they different with the previous meeting with Being held on the 7th of March 2017, we had been meaning to ask during the Environmental Engineering students. had the privilege to visit all 63 participants meeting but were not delivered due This time the participants along with the at UPN Environmental Engineering to time limitation. This event ended at committee had a lot of laughter. It was building and Informatics Engineering 1 p.m. but the enthusiasm shown by an enjoyable moment but they were still Building at separate times. The first the participants were way beyond our into the material. As it turned out the meeting took place in Environmental expectation. One of the participants even participants were very interested in Oil Engineering Building, room D.3.1-3.2. requested the committee to share more and Gas industry, a participant innocently The master of ceremony, Mr. Adnan Gary knowledge concerning the application asked “What will be our main role in the officially opened the event right at noon. of Environmental science in oil and gas future as Informatics Engineers in oil and Then Mr. Muhamad Ikmaal, proceeded industry. ‘’I am pleased to hear that and gas industry?” The atmosphere started with his presentation which was about we can definitely talk about it later on to change at the end when we opened the benefit of becoming SPE member. at the end of this event. But what needs the question session. These Informatics He is one of the recipients of YES (Youth to be remembered is Environmental Engineering students started to ask a Exchange and Study) student exchange Engineering plays an important role in oil lot of questions with excitement and program to U.S. During this event, the and gas industry especially in HSE field” curiosity. participants looked so serious yet excited. said the president of SPE UPN SC, Mr. Irfan Maulana. “I get new relation, new experience and After the learn a lot from this event and from now photo session on I believe I will gain more knowledge was done, the in order to build a better Oil and Gas participants Industry in the future, it is just a matter of continued time” confessed one of the participants. to deliver All of them quickly registered themselves questions after to become member of SPE after the event questions to ended. the committee, which also marked the new relation 52 SPE Java . Jan - Mar ‘17 TTOGETHEROGETHER WWEE RRISEISE UUPP PE SC Gathering was held on annual event, previous and upcoming February 2nd from 09.00 am to events, vision and mission, organization 01.00 pm. Project Officer of this structure and etc. After presentation eventS is Mr. Fidi Abganis Hermawan. This session, we continued to sharing session year, SPE SC Gathering was held in Quinn which moderated by Mr. Fidi Abganis Colombo hotel. Different from previous Hermawan and Miss Dayanara Surya. year, the concept of this gathering is We were discussing many kind of topic more focus in sharing and encouraging especially about our student chapter and each other. SPE SC Gathering is an annual oil and gas condition nowadays. Suchlike event programmed by UPN “Veteran” the challenges in our student chapter Yogyakarta SPE SC to increase solidarity and how we deal with that, quality or between SPE SC which exists in Asia quantity member, how we increasing the Pacific section. enthusiasm of our member about our event and etc. Over 50 people attended this event. They’re from ITB SPE SC, ITSB SPE SC, One of SPE SC Gathering participant, Miss UCSI SPE SC, UGM SPE SC, UI SPE SC, Sasyi Niskala Sumaatmadja from ITSB UNDIP SPE SC, UNPAD SPE SC, TRISAKTI SPE SC said “For me, it’s always quality, SPE SC and UPNVYK SPE SC. The most because in my opinion one person with participant were come from ITSB SPE SC. high quality can help to change the world, quantity without quality is useless. After sharing session, we took photo In this event, each of SPE SC had Quality is far more important than session together then next to fun activity opportunity to present about their quantity, because qualified people always and closing. This event was closed by student chapter such as about their do their job with all of their heart.” melodious music performance from Miss Dinar Kaesti, Miss Sekar Ayu Septianis and Mr. Epafras. There were so many benefits of this event, like building and widening more networking, sharing and discussing about the kind of problem which every student chapter face, to getting closer with another SPE SC and etc. By giving your time and expertise and sharing them freely, the pie gets bigger for everyone. (Keith Ferrazzi) SPE Java . JAN - MAR ‘17 53 TTRAININGRAINING DDAYAY n Sunday, February 26th, 2017, Charge Training’, such as how to be good UPN SPE SC held a program MC, how to be a good safety announcer, named UPN SPE SC Training Day, and also how to be a good membership Owith theme “Enhancing Skills for a Better announcer. By learning to be a good SPE”. This event is held annually in every MC and a safety announcer, we could new period in UPN SPE SC. In this event, increase our public speaking skills. Not every department, such as Event, Human only that, but also by learning to be a Resources and Development, Creative, good membership announcer, we tried to Multimedia and Research, Public attract the audiences so that they can be Relation, Secretary, and also Treasurer interested in joining the SPE membership. presented their own Standard Operating By this ‘Person in Charge Training’, all Procedure or SOP in doing works. boards and staffs learned to encourage themselves to have good public speaking As we know, in every organization, skills. institution, or company, SOP is the most essential thing which can be a In this event, there was also a software guidance about knowing the standard training from CMR Department for all of performance in doing works. As a boards and staffs to learn how to design professional organization, UPN SPE a simple poster and also photography SC has certain qualifications which training by Mr. Harisma Bagus. So, in this must be implemented in every board UPN SPE SC Training Day, all boards and and staff that we can reduce the errors staffs in UPN SPE SC learned many things when working and also get a “succeed” about the job descriptions when running predicate in running every program in it. every event according to our standard in Furthermore, SOP can underline all the SOP. job descriptions and its responsibilities for every board and staff such as, what All boards and staffs were really we need to prepare, what we need to enthusiast to have many kinds of training do, and also what we need to finish in in this Training Day. Hopefully, the things every event that was held by UPN SPE that we learned on this event could be SC that make all the boards and staffs beneficial for all boards and staffs. Besides are consistent about the role and task in that, with this event, we hope our UPN The swiftest way to triple your success conducting an event professionally. SPE SC can increase the professionalism is to double your investment in working and serve all the people with in personal development Besides that, there was also ’Person in knowledge maximally. (Robin Sharma) 54 SPE Java . Jan - Mar ‘17 SPE JAVA INDONESIA BOARD OF DIRECTORS 2016-2017 No. Position Name Company Address Tel E-mail Member# 1 Chairman Amin Hartoni Engineering & DBS Bank Tower 28th Floor, Jl. Prof. Dr Satrio 0811816560 [email protected] 3050372 Management Consulting Kav. 3-5, Jakarta 12940 2 Vice Chairman Open Position 3 VC Membership Steven Broadmeadow Geoservices Jl. Minangkabau Barat No. 34, Jakarta 12970 0811187763 [email protected] 957704 4 VC Membership Cessy Bellafania Semesta Energi Services Graha Satria 1, 2nd Floor Suite 203A/204, Jl. 08551123855 [email protected] 3519018 Raya Fatmawati No. 5, Jakarta 12430 5 VC Program Edy Subiantoro PT. Energi Mega Persada Bakrie Tower 23rd Fl. Rasuna Epicentrum, Jl. 08111770418 [email protected] 4202862 Tbk. HR. Rasuna Said, Jakarta 12960 6 Secretary William Ongseputra GE Oil & Gas Jl. RA. Kartini Kav. 8, Cilandak Barat, South 087789255035 [email protected] 3467283 Quarter, Tower B 19th Fl, Jakarta 12430 7 Treasurer Hanifatu Avida ExxonMobil Wisma GKBI Room 27-321, Jl. Jend 08118606625 [email protected] 3155502 Sudirman Kav. 28 Jakarta 8 Treasurer Dwi Yulianto Schlumberger Wisma Mulia 45th Floor, Jl. Gatot Subroto No. 08111790157 [email protected] 42, Jakarta 12710 9 Past Chairman Hasbi Lubis 08111251148 [email protected] 3169015 10 Mentor Bambang Istadi PT. Energi Mega Persada Bakrie Tower 28th Fl. Rasuna Epicentrum, Jl. 0811883266 [email protected] 3262190 Tbk. HR. Rasuna Said, Jakarta 12960 11 Mentor Peter Adam PT. Energi Mega Persada Bakrie Tower 27th Fl. Rasuna Epicentrum, Jl. 08121017094 [email protected] 1347491 Tbk. HR. Rasuna Said, Jakarta 12960 12 Section Officer Mega SPE Java Section Wisma Mulia 46th Floor, Jl. Gatot Subroto No. 081311113128 [email protected] 4587095 42, Jakarta 12710 SPE JAVA INDONESIA COMMITTEE CHAIRPERSONS 2016-2017 No. Position Name Company Address Tel E-mail Member# 13 Scholarship Teddy Komaroedin Independent Consultant 08129174430 [email protected] 888644 14 Scholarship Bambang Sadarta TAC Pertamina - Blue Sky Menara Prima 26th Floor, Jl. Lingkar Mega 08128963311 [email protected] 3058881 Langsa Ltd. Kuningan Blok 6.2, Jakarta 12950 15 SC-YP Coordinator Muhammad Titis Star Energy Wisma Barito 9A Floor, Star Energy Tower, Jl. 08128584456 [email protected] 3200553 Redjoso Let. Jend. S. Parman Kav. 62-63, Jakarta 16 SC Coordinator Felany Wijaya Uzma Group Jl. Tekno Utama Blok F1/FA Taman Tekno 08129639699 [email protected] BSD Tangerang Selatan 17 YP Coordinator Andri Mustari Weatherford Talavera Office Park 5th Floor Jl. TB 08119104802 [email protected] Simatupang Kav 22-26 Jakarta Selatan 18 Co. YP Event Julianta Panjaitan Conoco Phillips Ratu Prabu II, 11 Floor, Building l Jl. TB. 081328001572 [email protected] Simatupang Kav. 1B Jakarta 12560 19 Co. YP Event Bisma A Muhammad Conoco Phillips Ratu Prabu II, 11 Floor, Building l Jl. TB. 0811965804 [email protected] Simatupang Kav. 1B Jakarta 12560 20 Co. YP Event Alliza Continental Energy Menara Anugrah 22nd Floor, Jl. Mega 0811769210 [email protected] Kuningan Lot 8.6-8.6 Jakarta 12950 21 Continuing Education Hari K. Oetomo 0811801047 [email protected] 1535368 22 Technical Discussion Group Sri Rahayu PT. Energi Mega Persada Bakrie Tower 23rd Fl. Rasuna Epicentrum, Jl. 081392087252 [email protected] 4105582 Tbk. HR. Rasuna Said, Jakarta 12960 23 Technical Discussion Group Paulina Tio DAW Group Alamanda Tower 22nd Floor, Jl. TB. 0818985489 [email protected] 3485527 Simatupang Kav 23-24, Jakarta 12430 24 Website/Media/Comm Aming Kusumadjaja 08111021757 [email protected] Integrations 25 Communications Andika Mahardika Exterran Indonesia Jl. Gandaria Tengah III No. 25 Kebayoran 08118756963 [email protected] Baru Jakarta Selatan 12130 26 Media Sponsorship Brett McIntosh Sagatrade Murni Jl. Adityawarman No. 51 Kebayoran Baru 081287102870 [email protected] Jakarta 12160 27 Website Satrio Wibowo HSP Energy Pondok Pinang Center - C34, Jl. Ciputat Raya 08115426790 [email protected] 3442543 Jakarta 12310 28 Website Dominico Alphan SKKMigas Wisma Mulia 23rd Floor, Jl. Gatot Subroto No. 081806442082 [email protected] 42, Jakarta 12710 29 Social Media Yola Aprecia Uzma Group Jl. Tekno Utama Blok F1/FA Taman Tekno 081287991268 [email protected] BSD Tangerang Selatan 30 Shrimp Boil Doug Slusher Santa Fe Relocation Jl. Karanggan Muda Raya No. 59 Gunung 08161902830 [email protected] 4098263 Services Putri 16961, Bogor Indonesia 31 Fish Fry Rob Jagodzinski Turbochem International Menara Batavia 21st Floor, Jl. KH Mas 08111631739 [email protected] Mansyur Kav 126, Jakarta 32 Golf Bob Shearer Oilfield Advisor Jl. Darul Ma'arif 45G, Jakarta Selatan 12410 0816864315 [email protected] 926006 33 Golf Brad Sincock Geological Consulting 0811947920 [email protected] 3437981 SPE Java . JAN - MAR ‘17 55 Consider it covered. When it’s under Wild Well. Wild Well stands for safety, integrity, and competence—supplying customized solutions to pressure control and operational issues wherever they arise. We protect assets onshore and offshore, at inland and deepwater locations. And we’re also the recognized experts in non-emergency aspects of well control. With nearly 40 years in the business, the legacy of Wild Well is built on dependability, courage and innovation. Our new brand identity conveys our promise to carry that legacy into the future. See more at wildwell.com Head Office- PT. Abumas Albindo Branch Office - PT. Abumas Albindo Wild Well Corporate Jalan Buncit Raya Pulo No.8 Balikpapan Permai Blok L No.9 Drilling Technology Center Jakarta 12740, Indonesia JI. Jend. Sudirman, Balikpapan 76112 2202 Oil Center Court Ph: + 62 21 797 1025 East Kalimantan, Indonesia Houston, Texas 77073 U.S.A 56 SPE Java . Jan - Mar ‘17 Ph: + 62 542 733071 Ph: + 1 281 784 4700