Inovasi PIEP Bikin Bisnis Migas Pertamina Mendunia di Irak Hingga Aljazair

Summary

The transcript discusses the operational challenges faced by Pertamina International Exploration and Production (PIEP) across various countries. These challenges include technical issues like managing declining production rates, navigating different countries' regulations, and ensuring cost efficiency. The company also emphasizes innovation, both technically and in building relationships, to maintain productivity. Specific projects in countries like Venezuela, Algeria, and Iraq are highlighted, along with their unique regulatory and geopolitical complexities. PIEP's risk management strategy and collaboration with local governments and international partners are key to overcoming these challenges and achieving operational success.

Takeaways

• ⚙️ The main technical challenge faced by PEP is managing the natural decline rate in oil fields, requiring aggressive and massive work programs to maintain production levels.
• 🛠️ Efficiency is a priority, as operations in various countries are capital-intensive, requiring innovations to reduce costs while maintaining high productivity.
• 🌍 PEP operates in highly regulated environments globally, similar to Indonesia, requiring adaptation to different laws, regulations, and cultural contexts in each country.
• 🛢️ In Venezuela, sanctions from the U.S. and other regulations complicate oil production, but PEP adapts by aligning its business strategies with local regulations.
• 🏅 PEP has received recognition for technical innovations, such as a cost-saving initiative in deepwater operations that increased profits by nearly 1 trillion IDR.
• 🔧 Relationship-building is critical to ensuring approvals from local governments and partners, avoiding project delays and improving efficiency.
• 📈 Risk management is a key aspect of PEP's operations, with daily assessments of geopolitical and other risks to ensure safe and successful operations in foreign countries.
• 🇩🇿 In Algeria, PEP is awaiting government approval for Phase 5 of development, which includes building an LPG plant to monetize gas resources.
• 🏭 PEP has expanded its operations in Iraq, increasing its ownership to 20% in the West Qurna 1 block, with plans to ramp up production to 600,000 barrels per day.
• 🤝 Close collaboration with international oil companies, governments, and embassies is vital for PEP to navigate geopolitical risks and maintain smooth operations across different regions.

Q & A

What are the primary challenges faced by PIEEP in managing operations in various countries?

The primary challenges include technical issues, such as the natural decline in production rates that must be countered to maintain output, and ensuring efficient capital management despite the high costs involved. Additionally, PIEEP must navigate highly regulated environments, adapting to different rules, cultures, and approval processes in each country of operation.

How does PIEEP address the technical challenges related to declining production rates?

PIEEP focuses on aggressive and massive work programs aimed at counteracting the natural decline in production rates. These programs include innovative solutions and partnerships with local communities to maintain consistent production levels.

What measures does PIEEP take to ensure capital efficiency?

PIEEP employs technical innovations and cost-saving strategies. For example, in a deep-water project, PIEEP proposed an approach that saved almost 1 trillion rupiah and was recognized internationally with an award. Maintaining efficient operations while achieving substantial output is a key focus.

How does PIEEP navigate the regulatory differences in the countries it operates in?

PIEEP accepts each country's regulations as given conditions and uses a strategic approach to align its business objectives with local laws. The company engages in relationship-building with governments to facilitate quick approvals and smooth operations.

Can you provide an example of a specific regulatory challenge PIEEP has faced and how it adapted?

In Venezuela, when the country was sanctioned by the U.S., PIEEP had to navigate specific regulations regarding oil production. Additionally, they faced challenges in balancing the oil needed for both Venezuela’s local refineries and export to Indonesia, requiring them to adapt production schemes accordingly.

What innovations has PIEEP introduced to improve productivity and efficiency in its international operations?

PIEEP has introduced both technical innovations, such as the aforementioned deep-water project, and relationship-building strategies that streamline government approval processes and enhance collaboration with international partners.

How does PIEEP manage risks, especially those related to geopolitical and economic factors?

PIEEP uses a comprehensive risk management system to evaluate potential risks daily. The company closely monitors political events and economic shifts, collaborating with international oil companies and local governments to assess and respond to risks promptly.

What role does the Indonesian government play in supporting PIEEP's international operations?

Various Indonesian ministries, including the Ministry of Foreign Affairs, Ministry of Energy, and local embassies, play a crucial role in facilitating PIEEP's operations abroad. They provide critical information and support, helping PIEEP make timely and well-informed decisions.

What is the current status of PIEEP’s operations in Algeria?

PIEEP is in the final stages of approval for Phase 5 of its Algeria operations, following the country’s recent elections. In addition to drilling, PIEEP plans to build an LPG plant to monetize gas, a resource that was previously not allowed to be commercialized.

What is the production outlook for PIEEP's operations in Iraq’s West Qurna 1 block?

PIEEP currently holds a 20% participation interest in the West Qurna 1 block, where PetroChina is the operator. Production is expected to increase from the current 550,000 barrels per day to 600,000 barrels per day next year, with potential further growth to 800,000 barrels per day pending government approval.