MINISTRY OF ENERGY AND MINERAL RESOURCES

DIRECTORATE GENERAL OF OIL AND GAS

PETROLEUM RESOURCES OF INDONESIA

Bali, 17 March 2009

060808
 Ministry of Energy and Mineral Resources

AGENDA
1. ROLE OF OIL AND GAS INDUSTRIES

2 GOVERNANCE IN OIL AND GAS SECTOR

2.

3. SEDIMENTARY BASINS IN INDONESIA

4. DATA MANAGEMENT

5. STIPULATION OF OIL AND GAS ACREAGE

6. EXPLORATION ACTIVITY

7 OIL AND GAS COOPERATION CONTRACT

7.

8. OIL AND GAS RESERVE AND PRODUCTION

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 Ministry of Energy and Mineral Resources

ROLE OF OIL AND GAS INDUSTRIES

Sustainable
Development
p

plier Effects
s
estic Fuels
s
e Revenue

Feed stocks
ource of

Dome
State

Multip
So

OIL AND GAS INDUSTRIES

CAP. INTENS.

OURCES
HIGH TECH

GH RISK

UMAN
RESO
HU
HIG

3
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GOVERNANCE IN OIL AND GAS SECTOR

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 Ministry of Energy and Mineral Resources

OIL AND GAS NEW POLICY

Previous New

Regulator
MIGAS
Regulator
Player
Pertamina
Pl
Player Supervisor
PERTAMINA BP MIGAS

1971 - 2001 2001 - recent

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BACKGROUND

T
To promotet national
ti l welfare
lf
Strategic resources play an importance role in the national
economy
an important role in giving an actual added value to increased
and sustainable national economic growth
g
The previous oil and gas law is no longer suitable for
development oil and gas business activities

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SECTOR REFORM

Enactment of a new oil and gas law

Ending Pertaminas monopoly and the opening up of all
aspects in the petroleum sector to create greater competition
while preserving Pertamina as an important company.
Greater pricing mechanism transparency
Establishment of new institution for upstream and downstream
petroleum regulation
Introduction of efficiency improvements in hydrocarbon
exploration and production

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GOAL OF THE NEW STATE OWNED LIMITED LIABILITY

(PERTAMINA)

a. Preparing
p g a limited liabilityy company
p y oil and g
gas business
activities from Upstream - Downstream - Commerce
internally and Internationally (no longer regulator)
b. Profit oriented
c. Preparing public service obligation in Oil-Based fuel
supply for domestic if required

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MANAGEMENT OF OIL AND GAS ACTIVITIES

DIT. GEN. OIL & GAS PERTAMINA

DIT. GEN. OIL AND GAS

Pertamina
FUNDAMENTAL A
According
di to
t
PAST CONDITION DUTIES & FUNCTION LAW No.8 of 1971
(BEFORE UU 22/2001) According to
Pres. Decree No. 165 of 2000 Upstream Downstream
and others related Function Function
Regulation

LAW 22/2001 CONCERNING OIL & GAS

DIT. GEN. OIL AND GAS PT. PERTAMINA

FUNDAMENTAL (PERSERO
CURRENT CONDITION
DUTIES & FUNCTION
(AFTER UU 22/2001) Imp. Body Reg. Body
According to
Pres. Decree No. 165 of 2000 Gov.
Gov.
and others related Upstream Do.stream
Do stream
Regulation Function Function

PRE CONTRACT CONTRACT POST CONTRACT

DIT. GEN. OIL AND GAS DIT. GEN. OIL AND GAS/IMPLEMENTING BODY DIT. GEN. OIL AND GAS
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The Principle of Oil and Gas Law

1 Oil and natural gas within territory of Indonesia are a
1.
national asset, controlled by Government.
Government.
2. Government as the mining
g right
g holder establish an
Implementing Body which controls the operational
management..
management
3 Upstream
3. U t b i
business activities
ti iti shall
h ll be
b conducted
d t d
through the cooperative contracts
contracts..
4 Downstream business activities shall be conducted
4.
through the mechanism of appropriate, fair, and
transparent business competition
competition..

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WHO IS DOING WHAT IN OIL AND GAS INDUSTRY

OIL AND GAS

AUTHORITY OIL AND GAS INDUSTRY
Policies
MEMR UPSTREAM INDUSTRY
Cq. DGOG BPMIGAS
Technical
Regulation PSC MICRO MANAGEMENT OF PSC

Business Entities or Permanent Establishments

Businessl Exploration Exploitation

Regulation
DOWNSTREAM INDUSTRY

Policies
PROCESS TRANSPORTATION STORAGE TRADING

Business Business Entities

Regulation
BPH MIGAS 1) Article
A ti l 46 off
TRANSPORTATION 3) STORAGE TRADING 4)
Law 22/2001

1) Only for supply and distribution of petroleum product (fuel) and pipelined-gas
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DEVELOPMENT AND SUPERVISION OF

UPSTREAM OIL & GAS BUSINESS ACTIVITIES

PRE CONTRACT CONTRACT POST CONTRACT

DIT.GEN. OIL AND GAS

DEVELOPMENT & SUPERVISION

IMPLEMENTING BODY

SUPERVISION

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WHO ELIGIBLELY CONDUCT

THE BUSINESS
The entity eligible to conduct the business
State-owned
State owned company
Local owned company
Cooperatives/small
C ti / ll enterprise
t i
Private company (including permanent
establishment)
t bli h t)

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 Ministry of Energy and Mineral Resources

SEDIMENTARY BASINS IN INDONESIA

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TERTIARY SEDIMENTARY BASINS IN INDONESIA

1
4 3

1 11

2
10 15
7
6
2 9
3 13

5 14
4 12
16
6 7
8

(16)
(15)
(22)
(7)

15
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INDONESIA OFFSHORE PETROLEUM BASINS

Status : November 2008

Total : 55 Basins
16
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WATER

UNEXPLORED BASINS NO
UNEXPLOR
E BASINS

1 Ketungau
WIDE
((Km2)

9,048
DEPTH
(m)
Onshore
2 Pembuang 55,300 Onshore
3 Minahasa 70,010 500-5500
4 Gorontalo 48,660 500-3500
5 Sala Bangka 6,735 2500-3500
6 South Sula 3,682 2500-5500
7 West Buru 9 274
9,274 3500 5500
3500-5500
22
8 Buru 15,580 1500-5500
9 Tukang Besi 51,690 1500-4500
10 Flores 24,550 500-4500
11 Lombok Bali 47,490 500-4500
12 North Obi 5,776 1500-3500
13 South Obi 5,279 100-1500
North
N th
14 4,702 100-1500
Halmahera
Unexplored Basins Producing / Oil/Gas Dry/P&A Seismic East
Explored Basins Well Well Lines 15 15,360 100-2500
Halmahera
South Onshore-
16 22,450
Halmahera 2500
Almost all of Unexplored Basins located in of shore/deep water area, except for Ketungau South Onshore-
17 9,954
and Pembuang basins, hence need a more expensive exploration cost and also higher Seram 4500
exploration risk since the minimum geology understanding of these area. 18 West Weber 12,650 500-5500
19 Weber 39,110 2500-7500
Most of Unexplored Basins has only minimum seismic data, so that a detail seismic survey
Onshore-
will be needed. 20 Tanimbar 6,884
4500
21 Waropen 11,310 2500-3500
17 22 Jayapura 1,692 100-3500
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DATA MANAGEMENT

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DATA MANAGEMENT

MINISTER OF E&MR

SEC-GEN DGM BP MIGAS PSC CONTRACTOR

NDC Dit of Upstream Business Dev

Dit. Dev.

PND

Notes :
LANDMARK
Units work flow
Data turn over procedure
THIRD PARTY

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OPEN DATA MANAGEMENT

MINISTER OF E&MR

SEC-GEN DGM BP MIGAS PSC CONTRACTOR

NDC
C Dit. of Upstream Business Dev.

Counterpart Team

Third Party :
Technology
Supplier
PND New WA Opening
&
Technical
A i t t
Assistant
Open Data Users:
1. PSCs New Ventures
2. New Investors
3. Others

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ACTIVE DATA MANAGEMENT

MINISTER OF E&MR

SEC-GEN DGM BP MIGAS PSC CONTRACTOR

NDC

Counterpart Team
Third Party :
Technology
LANDMARK Supplier
&
Technical
Assistant

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 Ministry of Energy and Mineral Resources

STIPULATION OF OIL AND GAS ACREAGE

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FLOW CHART
PROSES OF STIPULATION
PENETAPAN OF OIL AND
WILAYAH KERJA (WK) GAS ACREAGE
MIGAS

INISIATIF OF OPENING ACREAGE

STUDY OF GEOLOGY REGIONAL DATA INVENTARITATION AND
INVESTOR INTERESTING INTERPRETATION AND
COLLECTING EXPLORATION
DISCOVERY IN CERTAIN AREA EVALUATION DATA
DATA

BLOCK
OC COORDINATE
COO
TERM & COND, PSC
BID INFORMATION

STIPULATION OF OIL FAVOURABLE

AND GAS ACREAGE TO BE OFFERED

EVALUATION TECHNICAL AND ECONOMICAL

TENDER OIL AND

GAS ACREAGE NOT FAVOURABLE TO BE OFFERED

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ACQUIRING BLOCKS

A. ACQUIRED THROUGH TENDER

B
B. AVAILABLE BLOCKS 2001
2001-2004
2004
C. PROPOSAL BY INTERESTED COMPANY
D
D. JOINT STUDY BY INTERESTED COMPANY

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BLOCK OFFERING SYSTEM

A. ACQUIRED THROUGH REGULER TENDER
Blocks prepared and designated by Migas and offered through tender.
1. Announcement
Special announcement of the new offered working acreage.
1
1 Bid Invitation
Announcement
2. Bid Invitation
Invitation will be disseminated to all companies through our home page at
22 Bid Bid
Invitation
Invitation http://www.geomigas.com
3. Bid Information
33 Bid Information
Bid Information It contains the information of the tender process including instructions to the tender participant.
The tender participant must purchase the Bid Information at MIGAS
44 Data & Information 4. Data & Information
It is mandatory that any tender participant will have to purchase an official Government a data
package through and set by MDM prior to submitting the tender document.
55 ParticipationForum
Clarification
5. Clarification Forum

66 Bid Evaluation
Bid Participation 6. Bid Participation
p
The tender participant should submit the entire tender document before or on the closing date of
the tender
77 Determination of the
Bid Evaluation
Winning Bidder 7. Bid evaluation
The tender Team evaluates the Submitted document based on the technical analysis, financial
Determination of the outlay and commitment ( such as signature bonus ), and especially the firm commitment of the
88 Successful Bidder Work Program as proposed by Bidder
8. Determination of the Winning Bidder
Contract Signing Based on The Tender Team Recommendation, The Director General of Oil and Gas appoints
89
(BPMIGAS & Contractor) the successful Bidder
9. Contract Signing
BPMIGAS and the successful Bidder will sign The Cooperation Contract

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B. AVAILABLE BLOCKS 2001-2004

C. PROPOSAL BY INTERESTED COMPANY
D. JOINT STUDY BY INTERESTED COMPANY

B. AVAILABLE C. PROPOSED BY D. JOINT STUDY BY

BLOCKS 2001-2003 INTERESTED COMPANY INTERESTED COMPANY

ANNOUNCEMENT

BID INFORMATION DATA PACKAGE

EVALUATION OF
PROPOSALS

AWARDS

CONTRACT SIGNING

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CONTRACT SIGNING
(1999 - 2008
2008))
20

16

12

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
TAC 4 1
PSC-ext 2 2 1 1 4
PSC-std 4 1 9 1 15 16 12 5 27 34

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EXPLORATION ACTIVITY

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 Ministry of Energy and Mineral Resources

SEISMIC SURVEY 2D (k
(km))
(2001 - 2008)
35,000
,

30,000

25,000

20,000

15 000
15,000

10,000

5 000
5,000

0
2001 2002 2003 2004 2005 2006 2007 2008
Target 13,494 7,054 13,152 17,776 15,786 22,393 30789
Realization 5,190 13,170 15,854 13,497 12,209 10,392 9,389 21386

Target Realization

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 Ministry of Energy and Mineral Resources

SEISMIC SURVEY 3D (km2)

(2001 - 2008)
20,000
,
18,000
16,000
14 000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2001 2002 2003 2004 2005 2006 2007 2008
Target 1,840 18,373 2,826 5,010 5,390 16,446 17789
Realization 6,594 1,896 2,877 2,606 4,273 2,374 4,835 15041

Target Realization

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EXPLORATION WELL
(2001-2008)
160
140
120
100
80
60
40
20
0
2001 2002 2003 2004 2005 2006 2007 2008
Target 144 117 96 88 79 117 111 145
Realization 87 75 54 64 45 82 73 62
Discovery 48 38 26 33 16 31 28 29
Success Ratio (% ) 55 51 48 52 36 38 38 47

Target Realization Discovery Success Ratio (%)

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 Ministry of Energy and Mineral Resources

OIL AND GAS COOPERATION CONTRACT

DJMIGAS 160309
 Ministry of Energy and Mineral Resources

MAIN PRINCIPLES OF COOPERATION CONTRACT

a. Natural resources ownership under the

government up to the point of transfer;

b. The implementing Body controls the

management operations;

c. All capital and risk shall be undertaken by

Business Entity or Permanent
Establishment
Articel 6, Oil and gas Law No. 22/2001

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 Ministry of Energy and Mineral Resources

PRODUCTION SHARING CONTRACT MECHANISM

Gross Revenue
FTP
Cost Recovery

Net Revenue

Profit Split
FTP Non-shareable
GOI Profit Contractor Profit
DDMO

Tax (44%) Taxable Income

GOI Share Contractor Share

Contractor Take

Gross Revenue
FTP
Cost Recovery

Net Revenue

Profit Split
FTP Shareable
GOI Profit Contractor Profit
DDMO

Tax (44%) Taxable Income

GOI Share Contractor Share

Contractor Take

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 Ministry of Energy and Mineral Resources

HISTORY OF OIL AND GAS CONTRACT

Law No. 22 Tahun 2001

Cooperation
Contract ((PSC
and other)
(2001 now
now))
Law No. 8 year 1971

Production Sharing Contract

(1966 2001)
Law No. 44 Prp year 1960 Generation I

(1966 1976) Generation II

Concession Contract
(1960 1966)
(1976 1988) Generation III
(1988 2001)
Concession & contract 5A
(before 1960)

Indische Mijn Wet 1899

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 Ministry of Energy and Mineral Resources

PSC GENERATION

GENERATION 1 GENERATION 2 GENERATION 3

(1966 1976) (1976 1988) (1988 2001)

Oil split = 85% (Government) : 15%

Oil split = 65% (Government) : 35% Implementation of incentive
(conttractor)
(C t
(Contractor)
t ) package
k (1988 1989
(1988, 1989, 1992
1992, 1993)
Gas split = 70% (Government) :
Cost Recovery (Capital and non- Implementation of First Tranche
30% (contractor)
capital cost) = 40% (cap/year) Petroleum (FTP)
Cost recovery (Depreciation of
DMO fee = US$ 0.2
0 2 / barrel (without Cost recovery (Depreciation Capital
capital + non capital) = 100% (non
grace period) l + non-capital) = 100% (non cap)
cap)
Declararation of Commerciality was
Declaration of commerciality : 49%
abolished, change to Plan of
Government income
D
Development
l t (POD)
Investment Credit for oil and gas
Implementation of Investment
field development = 20% (from
Credit
capital)
DMO fee first 5 year production
DMO fee for 5 first five year equal
equal to export price (After 5 year
to export price (after 5 year = US$
= 10 25% export price / barrel)
0.2 / barrel)

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 Ministry of Energy and Mineral Resources

OIL AND GAS RESERVE AND PRODUCTION

DJMIGAS 160309
 Ministry of Energy and Mineral Resources

DISTRIBUTION OF OIL RESERVE IN INDONESIA

1 JANUARY 2008

NAD
144.42 NATUNA

113.34 414.03
NORTH SUMATERA

EAST KALIMANTAN

765.75 136.71 PAPUA

CENTRAL SUMATERA 4,163.75

MALUKU 60.83

58.02
SOUTH SUMATERA 852.48

SULAWESI
WEST JAVA
EAST JAVA
596.81
913.09

PROVEN = 3,747.50 MMSTB

OILFIELD (MMSTB) POTENTIAL = 4,471.72 MMSTB

TOTAL = 8,219.22 MMSTB

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DISTRIBUTION OF GAS RESERVE IN INDONESIA

1 JANUARY 2008

ACEH
NAD (NAD)

5.72
NATUNA
1.27
52 59
52.59
NORTH SUMATERA
EAST KALIMANTAN
8.15
24.96
CENTRAL SUMATERA PAPUA

24.21
3.18
27.10
SULAWESI
SOUTH SUMATERA
MALUKU
WEST JAVA
13.65
4.16 EAST JAVA

5.08
6.30

PROVEN = 112.47 TSCF

POTENTIAL = 57.60 TSCF
GAS RESEVE (TSCF)
TOTAL = 170.07 TSCF

DJMIGAS 160309
 Ministry of Energy and Mineral Resources
MINISTRY OF ENERGY AND MINERA LRESOURCES 21082008
DIRECTORATE GENERAL OF OIL AND GAS

INDONESIA GAS RESERVE

(1984 - 2008)
BSCF
TSCF
200
180
160
140
POTENTIAL
120
100
80
60
40 PROVEN

20
0
84
85

19 6
87
88
89

19 0
91
92
93

19 4
95
96
97

19 8
99
00
01

20 2
03
04
05

20 6
07
08
8

0
19
19
19

19
19
19

19
19
19

19
19
19

20
20
20

20
20
20

20
DGOG 2008
DJMIGAS 160309
 200
08
41

200
07
200
06
200
05
200
04
200
03
MOSTLY OIL FIELD IN INDONESIA ARE MATURE FIELD

200
02
200
01
INDONESIA OIL PRODUCTION (1970 2008)

200
00
199
99
199
98
199
97
199
96
199
95
199
94
199
93
199
92
199
91
199
90

YEAR
198
89
198
88
198
87
198
86
198
85
198
84
198
83
198
82
Ministry of Energy and Mineral Resources

198
81
198
80
197
79
197
78
197
77
197
76
197
75
197
74
197
73
197
72
197
71

DJMIGAS 160309
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70
2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

200

0
AND BOPD
TOUSA
 Ministry of Energy and Mineral Resources

PREDICTION OF INDONESIA OIL PRODUCTION (2010 - 2025)

1,200

1,000

800
M BOPD

600

400

200

-
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Do Nothing Effort POD 2007 - 2012 New Field

DJMIGAS 160309
 DJMIGAS 160309
MMSCF
FD

19 10,000

0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
6
19 9
7
19 0
71
19
7
19 2
7
19 3
7
19 4
7
19 5
7
19 6
77
19
7
19 8
7
19 9
Ministry of Energy and Mineral Resources

8
19 0
8
19 1
82
19
8
19 3
8
19 4
8
19 5
8
19 6
8
19 7
88
19
8
19 9
9
19 0
9
19 1
9
19 2
9
19 3
94
19
9
19 5
9
19 6
9
19 7
9
19 8
99
20
0
20 0
0
20 1
0
20 2
0
20 3
0
20 4
05
20
0
INDONESIA GAS PRODUCTION ((1969 2008))

20 6
0
20 7
08
 Ministry of Energy and Mineral Resources

PREDICTION OF INDONESIA GAS SUPPLY

(2009 - 2016)
10000

9000
TANGGUH
8000 TANGGUH DONGGI- MASELA
SENORO
7000 CHEVRON-
DEEP WATER
6000
MASELA
M M s c fd

5000

4000

3000

2000

1000

0
2009 2010 2011 2012 2013 2014 2015 2016

YEAR

Existing Supply Project Supply Potential Supply

DJMIGAS 160309
 Ministry of Energy and Mineral Resources

THANK YOU

DJMIGAS 160309
 Ministry of Energy and Mineral Resources

TERTIARY SEDIMENTARY BASINS IN INDONESIA

DJMIGAS 160309 46
 Ministry of Energy and Mineral Resources

DJMIGAS 160309 47