Pekanbaru – As is known, the contract of PT. Chevron Pacific Indonesia (CPI) in the management of the Rokan Oil and Gas Working Area (WK Migas) will end on August 8, 2021. The Minister of Energy and Mineral Resources (ESDM) through letter number 1923K/10/MEM/2018 dated on August, 6, 2018, has stipulated that PT Pertamina (Persero) or its affiliates (100%) shall be appointed as the manager of the next Rokan Management Area. Currently, the Transfer of Management of Rokan Management Area from PT Chevron Pacific Indonesia (PT. CPI) to PT Pertamina Hulu Rokan is ongoing.
Area of Rokan Oil and Gas is one of the fertile oil and gas blocks with a total of 96 managed fields. The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) noted that the oil production capacity of the Rokan Oil and Gas Working Area reached 170,000 BOPD (July, 2020). It contributes 26% equivalent to the total oil and gas production in Indonesia. In the context of the extractive industry, the strategic value of the Rokan Block is equivalent to the Mining Area managed by PT. Freeport Indonesia.
How are the efforts to optimize the Rokan Oil and Working Area (WK Migas) to benefit the people of Riau? What are the opportunities and challenges? These were many questions discussed in a Webinar entitled “Optimizing the Potential of Rokan Oil and Gas Working Area for the Riau Community” on Wednesday (15/7/2020) organized by the Riau Community Leaders Communication Forum (FKPMR) in collaboration with Publish What You Pay (PWYP) Indonesia. Apart from virtual (webinars), this activity is also carried out offline in the Medium Meeting Room of the Riau Province Regional Representative Council (DPRD) Building using protocols to prevent the spread of Covid-19.
Several speakers attended the event, including Edi Natar Nasution (Deputy Governor of Riau), Budiman Parhusip (President Director of Pertamina Hulu Energi), Satya Widya Yudha (Expert Advisor of SKK Migas), Maryati Abdullah (Coordinator of PWYP Indonesia), and Chaidir (Chairman of FKPMR Riau Province). Ego Syahrial who served as Acting Officer the Director-General of Oil and Gas representing the Ministry of Energy and Mineral Resources is expected to be able to provide material that does not appear in the activity. Meanwhile, Azlaini Agus, ex-official of Ombudsman the Republic of Indonesia acted as a moderator.
“The Riau Government encourages and facilitates the acceleration of the 10% Participating Interest (PI) transfer of the Rokan Oil and Gas Working Area; preparing BUMD participation in the management of the Rokan Block through the “B to B” mechanism, or BUMD in collaboration with other parties in terms of funding and technical operations for B to B with PT. Pertamina Hulu Rokan; prepare Riau BUMD to be active in Upstream and Downstream Oil and Gas Business activities as well as Oil and Gas Support Services; and encouraging the involvement of district/ city governments of oil and gas producing regions to coordinate and synergize the CSR program at the Rokan Oil and Gas Working Area with regional development programs.” said Edy.
Furthermore, Edy Natar Nasution reminded that around 65-85% of the Provincial Revenue and Expenditure Budget (APBD) and all districts/cities in Riau Province still depend on the Oil and Gas Production Sharing Fund (DBH). So it needs a common perspective by all stakeholders so that the Rokan Oil and Gas Working Area is truly optimal and beneficial to the community. Moreover, with the current condition of crude oil prices in the international market that does not reach the assumptions in the 2020 State Budget, coupled with the Covid-19 pandemic, it has had a direct impact on DBH revenues for both provinces and districts/cities in Riau.
Satya Widya Yudha, Expert Advisor to the Head of SKK Migas explained that the process of transferring the management of Rokan Working Area from PT. Chevron Pacific Indonesia (CPI) to PT. Pertamina Hulu Rokan is running and very intensively. Facilitated by SKK Migas as an institution that supervises upstream oil and gas activities in Indonesia, a Steering Committee was formed consisting of CPI, Pertamina, and SKK Migas.
“This Steering Committee will determine the rights and obligations of Chevron when the management is handed over to PT Pertamina. We hope that this transition will run well, production and investment will continue,” he said.
Although oil production has decreased, SKK Migas is trying to actualization the amount of oil production to 1 million barrels/day nationally, which has been echoing so far. Satya did not deny that the position of the national oil reserves which decreased from time to time naturally needed efforts to ensure that the rate of reduction in these reserves did not last long. One of these efforts is to open new wells stretching from Sabang to Merauke. The Rokan Block has a major contribution in achieving 1 million / day which will be achieved until 2030 and is still significant enough to be developed even though it is old. However, with the use of technology and good management, production can be boosted better.
However, Satya Widya Yudha reminded some key points for optimal management of the Rokan Oil and Gas Working Area. Support from all parties, including the regions, so that the process of transferring management and transferring operations of the Rokan Oil and Gas Working Area runs well and smoothly. Building communication is needed between the parties with an interest in management. Managing expectations, considering that the continued management of Rokan Working Area also still carries considerable risks and some challenges are not easy.
The same thing was also expressed by the President Director of PT. Pertamina Hulu Energi, Budiman Parhusip. Budiman hopes that the transition period for managing the Rokan Block will run smoothly and production will not decrease drastically.
“When the management status changes and Pertamina becomes the operator of Rokan Working Area, in the future we will increase the well drilling from 175-180,000/ barrel oil/ day and increase to 190-200,000/ barrel oil/ day,” he said.
In the management of this Rokan Working Area, the involvement of local companies is needed. This needs to be considered by the Riau provincial government so that it can contribute maximally in providing the goods and services that will be needed in the Rokan Block operation. Thus, it will drive the economy of the Riau people, develop local capabilities and technology that can be mastered by local companies.
“It is also Pertamina’s hope to work together so that the management of the Rokan Working Area can be better and contribute economically to the Riau province, both for the community, companies and the progress of the government, namely the province of Riau and the Indonesian state,” he added.
Maryati Abdullah, the National Coordinator for Publish What You Pay (PWYP) Indonesia hopes that this momentum can be utilized properly by the people of Riau. “When we talk about the interests of the people of Riau, each group must put their interests and egos. We must think of the Indonesian people or the people of Riau as the community where the Rokan Block operation was carried out. I agree with the points regarding the impact or benefits of the Rokan Block for the community which is disclosed regarding local content, increased income and welfare, labor, and so on, including how to maintain communication methods so that unwanted things do not occur such as conflicts, oil leaks. including leaks in DBH spending and dividends participating interest if they come out later. Natural Resources Management is the mandate of the 1945 Constitution, namely for the prosperity of the people.
Maryati also reminded that decision making by the Riau Provincial Government must be consistent and unified. In preparing the institutions related to this PI, there are many challenges faced, many ripples that occur because 10% for BUMD is quite large. In preparing HR and Managerial, it is necessary to carry out a fit and proper test, placing professional people by putting aside political and individual interests so as not to fail.
Natural Resource Management for the Prosperity of the Riau Community is the necessity
Riau contributes significantly to the national economy from the oil and gas sector. However, the fact is that the poverty rate is quite high, the income gap is striking, unemployment, lack of infrastructure, environmental damage and environmental pollution are increasingly widespread.
“Natural resources management for the prosperity of the Riau people is a necessity,” said Chaidir, Chairman of the Riau Community Leaders Communication Forum (FKPMR) in delivering several key ideas of the Riau people in managing the Rokan Oil and Gas Working Area. Among them are urging the central government to give priority and privilege of Riau Regional Owned Enterprises (BUMD) in the form of joint operations, and to provide opportunities for Riau BUMD and Riau Provincial Government to propose partners in the management of the Rokan Oil and Gas Working Area;
FKPMR also urged the government to provide broad business and job opportunities for local communities; carry out knowledge transfer and technology transfer in the oil and gas sector for the Riau region; established the National Oil and Gas Education and Training Center in Riau, established the Riau Oil and Gas Academy (Diploma education) and strengthened technical study programs at existing academies and universities in Riau. In addition, the former chairman of the Riau Provincial Representative Council hopes that President Jokowi will keep the promise made during the 2019 presidential election campaign in Riau province, namely to give trust to Putra Melayu (Son of Melayu) as a Commissioner at PT. Pertamina Hulu Rokan.
The same thing also was conveyed by Hardianto, Deputy Chairman of the Riau Provincial Representative Council. “This activity (webinar, red) is a big leap. Not only for Riau, but also for Indonesia to prepare a momentum on August 8, 2021. This is a form of 100% energy sovereignty. We hope that the people of Riau will not be immersed in this pride. Worryingly, we are sinking again like in previous years. The Rokan Block is expected to have a positive effect on Riau’s progress. “
As a leader in the Riau legislative institution, Hardianto promised to be ready to help make regulations in the form of regional regulations. “We want to focus not only on upstream but also downstream. The problem of local labor around the company’s operational area must be considered,” he said.