Government Asks Pertamina to Release or Collaborate on Idle Oil & Gas Drilling Well

KONTAN.CO.ID - JAKARTA. The Minister of Energy and Mineral Resources (ESDM), Arifin Tasrif, has asked Pertamina to release or collaborate on wells that are not optimally operated, also known as idle, with private Contract of Work Contractors (KKKS). According to him, this option is indeed allowed by the rules.

“We have asked for it to be collaborated or released, we have given the rules for it from the Ministry,” he said when met by reporters on the sidelines of the 4th International Convention on Indonesian Upstream Oil and Gas Industry 2023 (ICIUOG), Friday (22/9), in Nusa Dua, Bali, Friday (22/9).

According to Arifin, the number of idle wells reaches tens of thousands. However, most of these wells are small.

So far, the process of releasing or collaborating on such wells has been underway.

“The release of cooperation can produce approximately 3,000-4000 barrels per day. But it's quite good, the production period is only about 4 years, but it's quite good to keep going,” said Arifin.

The Deputy Head of SKK Migas, Nanang Abdul Manaf, said that they support the idea of releasing or collaborating with Pertamina's idle wells to the KKKS. According to him, this option is better than leaving the wells idle.

“Rather than being idle, it's better to collaborate with partners whose business scale can handle wells with small production, but still economical,” said Nanang when contacted by Kontan.co.id, Sunday (24/9).

Furthermore, he also added that the management of old wells that are already running can also be done by BUMD or KUD. This is regulated in the Minister of ESDM Regulation No.1 of 2008.

“There is also cooperation to reactivate idle wells, by service companies,” added Nanang.

The Executive Director of ReforMiner Institute, Komaidi Notonegoro, said that the option of releasing or collaborating with Pertamina's idle wells could have a positive impact on national oil and gas production. Therefore, the government and Pertamina need to communicate to discuss which idle wells need to be released or collaborated by Pertamina.

“For Pertamina too, too many assets that are not prospective from the company's perspective will also be a burden. But of course, it must start from the internal, so Pertamina identifies which assets can be released or collaborated with other parties,” explained Komaidi when contacted by Kontan.co.id (24/9).

VP of Corporate Communication Pertamina, Fadjar Djoko Santoso, said that they will review the government's direction to find the best option.

“Of course, we will review the direction first to see the best option. Pertamina's commitment is also to continue to strive to achieve the government's target to increase oil and gas production,” said Fadjar to Kontan.co.id (24/9).