PERTAMINA CBM Project

in South Sumatra

President Director & CEO

PT PERTAMINA (PERSERO)

IndoCBM 2006
Jakarta, April 18 – 19, 2006
Outline

• PERTAMINA’s Business Activities and Current

Aspiration
• Where Does CBM Fit in?
• Our Efforts in CBM
• South Sumatra CBM Study Highlights
• Concluding Remarks

Page 2
PERTAMINA AS AN INTEGRATED OIL AND
GAS COMPANY
Business Activities

Upstream Downstream Other Business

„ Exploration (Oil & Gas) „ Processing/refining „ 14 subsidiaries and 17 joint

ventures
„ Production (Oil & Gas) „ Marketing and distribution
„ Health services/ hospital,
„ Geothermal „ Trading hotel/ property, shipping
„ Shipping/Transportation
docks, aviation,
construction, insurance,
„ LNG etc.

Page 3
PERTAMINA MAIN ACTIVITIES
• Upstream: Second largest oil and gas producer in
Indonesia
• Downstream: Distribution of approx. 1.2 million b/d of
petroleum products
• Refining: Over 1 million b/d of capacity
• LNG: Sales of approx. 25 million ton/year to the East
Asian market
• Domestic Gas Sales: Growing untapped potential
demand, especially in West Java
– Present supply of 400 – 500 MMSCFD to fertilizer, steel plant,
power generation, and other industries
– Will increase by about 250 MMSCFD by end of 2006 – from South
Sumatra gas fields to be transported by PGN)

Page 4
 Indonesia Oil Production Indonesia Gas Production
MBOPD MMSCFD

Caltex 476 Total 2,300

Pertamina 136 Pertamina 1,107

ConocoPhilips 71 ExxonMobil 1,091

CNOOOC 64 ConocoPhilips 784

Total SA 60 Vico 687

Medco 55 Medco 169

PetroChina 52 Premier Oil 157

Unocal 35 Unocal 156

Vico 24 Kodeco 96

BP 19 PetroChina 84

Source: The Indonesian Petro Energy No. 2 year II, June - July, 2005; PT Pertamina EP

Page 5
 PERTAMINA IS NOW A LIMITED LIABILITY COMPANY
AND FACES ENORMOUS CHALLENGES
Law
#22/2001
• New competitors in retail

Working Draft - Last Modified 04/13/2006 4:22:18 PM

and industrial fuel
distribution
• New, independent
regulatory bodies
Subsidy and Pressure for
distribution fee performance
changes
• Fees for distributing PSO Pertamina’s • Profit as core KPI

Printed 04/12/2006 9:36:43 PM

fuels changed from cost- New World instead of volume
plus to a MOPs + x margin • Rising Government
• Subsidy cuts reduce demands for more
barriers to entry in Need for dividends
downstream
transparent and
clean business
• Priority of current
government to ensure
transparency and
professionalism in
business sector
Source: McKinsey analysis 6
OUR ASPIRATION
• To become a world class integrated oil and gas company – on
par with other leading national oil companies
– Building on dominant position in downstream
– Build E&P to become a significant player
– Shaping up refining, infrastructure, and logistics
• We want to change our image, to become a company that is:
– Confident
– Clean
– Customer focused
– Competitive

Internal transformation/restructuring is underway to

strengthen our fundamentals, including but not limited to,
changing the mindsets of the management and employees
Page 7
Where Does CBM Fit in Our Activities?
• As we aspire to increase our E&P activities, PERTAMINA
would like to enhance its role in supplying natural gas to
the domestic market, while maintaining its significant
role in the LNG business activities
• CBM – when it is proven to be economically exploited
and produced – will add to the gas supplies that can be
marketed to our customers
• PERTAMINA will take advantage of its customer base
(and its potential growth) and the availability of (both
current and projected) infrastructure, including the ones
that are developed by other companies

Page 8
Our Efforts in CBM
• Concentrate on the area that:
– Has good potential of CBM resources
– Has sufficient infrastructure
– Close proximity to our main customers
• Our initial project will concentrate on South Sumatra, which
meets the above criteria. While the last two criteria are
obvious, we are working on ensuring that the resources are
there and that the CBM can be economically and safely
produced
• PERTAMINA has done a preliminary study on CBM
development in South Sumatra, whereas a pilot project area
has been proposed by the Government (lead by LEMIGAS)

Page 9
South Sumatra CBM Study Highlights
• The study started on February 2002, and used existing
data of seismic and log
• The coal layers were identified at about 600 to 1300 m in
depth
• The study identified potential CBM resources of 124 TCF
• Environmental impact was studied. For example, the
water produced (as a by-product of CBM) is proposed
to be injected into the non-producing wells surrounding
the pilot project area.

Page 10
 SCHEMATIC GAS TRANSMISSION NETWORK
SOUTH SUMATRA GAS PROJECT

TERAS RAMBUTAN
MUSI BETUNG
P= 680 P= 620
28” - 3 P= 550
7 km
28” - 19 km 28” - 19 km
BENUANG
Q : 150 28” - 23.8 km 14” - 58,3 km SP.Y
28” - 2 CBY
S : 50 3.7 km PRABUMULIH 20” - 58,3 km
0,1 km
D : 770 24” - 1
BHP : 37260 Q : 150 14” - 50 km
0,1 km

m
S : 254 10” - 1

k
WELL : 33 24” - 11 km

15
D : 630
LEMBAK

6” -
BHP : 12420
LIMAU TUNDAN
Q : 10
D : 563
BHP: 1534
WELL : 3
NOTE :

24”
10
”-
S : COMPRESSOR SUCTION (PSIG) 27

- 59 k
D : COMPRESSOR DISCHARGE (PSIG) ,5
km
P : GAS PRESSURE (PSIG)

m
Q : FLOWGAS (MMSCFD) PAGAR DEWA BERINGIN
BHP : BRAKE HORSEPOWER (HP) Q : 20
D : 500

6”
BHP : 1950

-
Q7

3
: EXIST. FIELD P7

km
WELL : 8
100 430
: FIELD GAS COMPRESSOR PRABUMENANG
4” - 5 km
Q : 10 CPF PAGARDEWA
: BOOSTER GAS COMPRESSOR D : 550
BHP : 1120 km
8,1

4” - 18.3 km
: CENTRAL PROCESSING PLANT (CPP) 1
WELL : 4 ”-

36
10

”-
39
: NEW GAS TRANSMISSION
MERBAU

0
km
: NEW FIELD GAS PIPELINE Q : 70
: EXISTING GAS PIPELINE D : 540
BHP : 8280 TASIM
Q :5
WELL : 19
D : 530 Q8 P8
BHP : 1120
392 500
WELL : 3

CILEGON

Page 11
The CBM Studied Area
(Satellite Image of South Sumatra)

Page 12
 CBM Area Study
0

120 M
TOTAL CBM
AREA

STUDY
0M 50 M
15.075 KM2

PERTAMINA
10.135 KM2
PERTAMINA DOH
SUMBAGSEL PSC / JOB
TOTAL NET ISOPACH CBM
MUARA ENIM FORMATION 4.940 KM2
CI : 10 M
By. Marzuki & B.Tamtomo

Page 13
 Result of Preliminary Study
on South Sumatra CBM Potentials

POTENSI CBM DI SUMATRA SELATAN

PERTAMINA DOH SBS
140 KPS
PTM DOH SBS 124
KUMULATIF
120

100 92
KPS / JOB
80
TCF

60

40 32

20

0
PERTAMINA DOH SBS KPS KUMULATIF

GAS

Page 14
Concluding Remarks
• In facing new challenges brought about by the Laws,
Regulations, and its stakeholders’ expectations, PERTAMINA
aspires to become a significant E&P company. We are to
embark on accumulating new reserves and increasing
production of oil and gas
• In meeting domestic gas demand, PERTAMINA will leverage its
position based on its customer base and available infrastructure
• CBM fits strategically with our intent to increase our role in
meeting untapped domestic gas demand, most notably in West
Java, where our main customers are located
• South Sumatra meets our criteria for developing a CBM project,
which include significant potential resources to be exploited,
availability of infrastructure, and the proximity to our main
customers.

Page 15
Thank you

Page 16