BP Migas AnnualReport2010

MISSION AND VISION

CORE VALUES

STATEMENT FROM THE CHAIRMAN

EXECUTIVE HIGHLIGHTS

REALIZATION OF UPSTREAM OIL AND GAS IN 2010

PELAKSANAAN PROYEK HULU MINYAK DAN GAS BUMI

NATIONAL CAPACITY EMPOWERMENT & K3LL

INTERNAL BPMIGAS

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BPMIGAS Annual Report 2010

PROFESSIONALAct as a professional with strong commitment

RESPONSIVEPromptly responding to inquiries and resolving issues

UNITY IN DIVERSITYSynergizing the differences for greater achievements

DECISIVETaking Calculated risk within the authority

ETHICSConducting business by following the highest ethical standards consistently

NATION FOCUSEDMaximizing national capacity and capability

TRUSTWORTHYMaintaining credibility to earn the trust of stakeholders

0403

MISSION AND VISION

MISSIONSupervise and control the Production Sharing Contracts’ implementation through

partnerships in order to ensure the effectiveness and efficiency of upstream oil and gas

business activities for the greatest welfare of the Nation.

VISIONBe a proactive and trustworthy partner in optimizing the benefits of the upstream oil and

gas industry for all stakeholders while becoming one of the Nation’s engines in mobilizing

different economic and industrial activities.

STATEMENT FROM THE CHAIRMAN

Assalammulaikum Wr.Wb.

Today, upstream oil and gas industry still serves as one of the primary state revenue

generators. Within the last 3 (three) years period, the upstream oil and gas industry has

been contributing around 30% of the entire state revenue.

Given the fact that natural oil and gas are considered as non renewable energy sources,

BPMIGAS has initiated and pushed a shift function of the upstream oil and gas industry from

being the state revenue generator to become an economic growth engine. Several attempts

have been undertaken to realize this paradigm, which among others, was by involving other

domestic business sectors to actively support the industry, ranging from banking to other

supporting industries.

The use of energy for domestic consumption was also being the top priority concern for

BPMIGAS, whereas that particular decision has eventually rolled a multiplier effect condition,

as a result of the strong impact of the “pro growth, pro poor, pro-employment” policy set

out by the Government. Implementation of this decision still prioritizes on environmental

protection aspect aiming at sustainable development. Therefore, BPMIGAS should develop

the required effective and holistic management of demand, infrastructure and oil and gas

supply as first priorities.

Upstream oil and gas industry recognized the increasingly challenging journey along with

all the involving operational, fiscal or legal aspects. Moreover investor’s perception toward

non-conducive investment climate added to the upcoming challenges that must be properly

addressed through hard working and smart working attitudes. To that, BPMIGAS invites all

stakeholders including other government institutions and business players to work together

and strengthen the synergy through effective communication and coordination so that the

upstream oil and gas industry can run its duties and responsibilities to the nation.

Wassalammulaikum Wr.Wb.

Kepala BPMIGAS

Ir. R. Priyono

CORE VALUES

BPMIGAS Annual Report 2010 0605

PERFORMANCE HIGHLIGHTS 2010

Through effective planning and supervisory functions, and in line with the efforts of seeking

a conducive investment climate for investors of upstream oil and gas industry, the Upstream

Oil and Gas Executive Agency (BPMIGAS) succeeded in dealing with such a challenging year

2010 then closed the year with an encouraging performance. Contribution of the upstream

oil and gas industry to the State Budget (APBN) has increased and could even lead to other

sectors’ growth. Therefore, some accomplishments to note for the year 2010 were as follows:

Generated revenues of US$26.49 billion or 32.78% higher than 2009 revenues, which

amounted to US$19.95 billion. The actual state revenue in 2010 also exceeded the targeted

state budget for year 2010 totaled US$26.06 billion or 100.6%.

Increased realization of the natural oil and gas lifting by 11.7% from 2,033 million barrels of

oil equivalent in 2009 to 2,271 million barrels of oil equivalent per day by 2010. These figures

could be achieved due to the successful attempts of BPMIGAS together with PSC Contractors

in pushing down the declining rate of crude oil production of the average initial decline rate

by 12% to 0.43%.

Maximized the use of national banking system to support procurement of goods and

services transactions in the upstream oil and gas sector and depository of Abandonment

and Site Restoration (ASR) funding in the long term. During 2010, total transaction value we

conducted through national banking system reached US$8.59 billion (around Rp76 trillion)

and total deposited ASR funds reached US$167 million. This policy implementation has been

started since late 2009 and was proven successful in strengthening the entire national

banking sector.

Maximized the use of domestic goods and services to support the upstream oil and gas

industry. Domestic Containment Level (TKDN) of goods and services procurement in 2010

reached US$6.84 billion or 63.43% of total procurement value of US$10.79 billion. The

realization was higher than year 2009 TKDN, which recorded 62% of total procurement value.

Increased gas utilization to meet the increased domestic demand from 15.28 trillion cubic

feet (TCF) in 2009 to 20.09 TCF in 2010. This volume increase lifted the domestic industry

more efficiently while pertaining a high competitive capacity amidst the tightening global

competition.

BPMIGAS ensured that future production activities can be better managed to increase the

commitment of PSC Contractor to undertake exploration drilling activities throughout 2010

that covered a total of 95 wells or 26.6% higher than year 2009 figure, wherein 75 wells

were completed. The success ratio of exploration drilling in 2010 reached 46.27% and was

managed to find a contingency reserve totaling 489.4 million barrels of oil equivalent.

Increased cost efficiency initiative in upstream oil and gas sector through joint procurement

activities with the PSC Contractors and through material transfer system (maximization

of the use of material surplus, inactive assets and used material). In 2010, the achieved

savings value resulted from the joint procurement initiative amounted to US$70.19 million or

increased by 111% from US$33.20 million in year 2009. Meanwhile, total savings generated

through material transfer amounted to US$34.80 million or increased by 27% from US$27.50

million in year 2009.

Improved planning and budgeting mechanisms of the upstream oil and gas industry by

accelerating approval of Contractor’s Work Program and Budget (WP&B) to fasten the

realization of the PSC Contractors’ field activities as scheduled. The 2011 WP&B has been

approved on 16 December 2010 or earlier than the initial execution schedule that was dated

1 January 2011.

Reformation of BPMIGAS organization that drove all programs toward a clearly directed and

measured implementation, which in accordance with each department’s roles and authority.

SIGNIFICANT REMARKS 2010

Many problems interfered the realization of upstream oil and gas industry during year 2010,

mainly related to ongoing overlapping regulations. However, the following problems have

been resolved :

The issuance of Government Regulation No.79/2010 on Cost Recovery and Tax Income for

the Upstream Oil and Gas. Although this rule has been deemed legally uncertain by the PSC

Contractors, but at the same time also deliver certainty to incomplete tax issues we dealt

with during the past recent years.

Issuance of the Minister of Environment Regulation No.19/2010 to replace the Minister

Regulation No.04/2007 regarding Waste Water Quality Standard for Enterprises and/or Oil and

Gas and Geothermal Activities, which have accommodated the PSC Contractor’s operational

conditions as regards water quality standard.

Enactment of the Minister of Finance Regulation (MFR) No.165/2010 to replace the MFR

No.135/2009 has simplified material exchange process used by PSC Contractor and waste

disposal mechanism, of which the approval can now be done directly by BPMIGAS and do not

necessarily need other institutions’/agencies’ approval (depending on the material value).

EXECUTIVE HIGHLIGHTSLAPORAN TAHUN 2011BPMIGAS

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CONSTRAINTS FACED BY UPSTREAM OIL AND GAS SECTOR

Various problems lie ahead our current journey, awaiting the accurate, quickly and

comprehensive solutions that can disable any negative impacts that may be affecting our

efforts in achieving future production targets including:

Among others, various laws and regulations have been issued by either the Central

Government or Local Government, and that caused the following constraints:

Spatial issues as stipulated by Law No.26/2007 regarding Spatial Planning. Based on

that law, the Local Government was authorized to organize spatial planning. While

the Local Government was in progress of setting out the Spatial Planning (RTRW),

the ongoing upstream oil and gas business activities was however often overlooked.

In line with the Regional Autonomy framework, various regulations that were issued

by Local Government have apparently burdened the upstream oil and gas sector.

The current overlapping of land and activities between activities of upstream oil and

gas industry with the activities of coal mining, agriculture, plantation, forestry and

community land management especially relating to the local people’s courtyards.

Gas utilization for domestic industry still found the following barriers, among others were:

Determination of gas prices was still relatively low that it could not meet the minimum

economical conditions required for the project.

The limited availability of infrastructure to meet the particular needs of the domestic

gas transmission and distribution network that linked the production field to gas

consumers.

Long-term export contracts that were not diverted domestically within a short time period.

In general, the upstream oil and gas industry activities succeeded to reach the set targets

and have been considered as revenue generator, while at the same time being the economic

growth engine. Hence it is worth to say that this industry has then become one of Indonesia’s

economic driving engines.

BUREAUCRACY REFORM TO ENHANCE BPMIGAS CAPABILITY

In effort of improving the performance of upstream oil and gas industry, BPMIGAS conducted

a bureaucracy reform to create a more effective and efficient way to achieve the set

production targets. The reforms include the following 8 (eight) aspects of :

Improving the mindset and work culture through new core values comprising: P.R.U.D.E.N.T

(Professional, Responsive, Unity in Diversity, Decisive, Ethics, Nation-focused, Trustworthy)

Improving the ability of organizations to restructure the organization to be more effective

and efficient in monitoring and controlling the upstream oil and gas

Improving Corporate Governance by changing business processes, Standard Operating

Procedures (SOP) and Standard Guidelines for Management Authority (PSKM) according to

a new organizational form and by formulating and revising the Rules of Employment (PTK)

Improving the quality of Human Resources (HR) through implementation of competency-

based human resources management, by adding the number of workers accordingly to the

required competency and adjustment of job descriptions to the newly reformed organization.

Enhancing accountability by establishing and monitoring the performance measurement

through Key Performance Indicators (KPI).

Improving supervisory role through improved internal control systems to obtain better

auditor’s opinion, which then be followed up by Indonesia’s State Auditor’s findings along

with validation of the Code of Ethics and Whistleblower program.

Providing inputs relating to legislation improvement, which include Shipping Law,

Government Regulation on Cost Recovery and Upstream Oil and Gas Taxation Rules.

Improving public services by accelerating the WP&B and AFE approval process as well as in

conducting surveys regarding PSC Contractor satisfaction to BPMIGAS services.

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B.

C.

C.

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REALIZATION OF UPSTREAM OIL AND GAS IN 2010

1OIL AND CONDENSATE LIFTING

Achievement

954 ribu BOPD (98.9%)

NATURAL GAS LIFTING

Achievement

7681 BBTUD (99.0%)

STATE REVENUE

Achievement

US$26.22 Miliar(100,6%)

UPSTREAM OIL AND GAS PERFORMANCE IN 2010


Realization of Upstream Oil and Gas in 2010

1211

In line with the government’s efforts to enhance oil and gas (O&G) discovery and reserves in

new Work Area as well as in improving O&G production and lifting, we always seek to discover

new work areas.

There were 27 new work areas in 2010, which consisted of 21 O&G work areas and 6 (six)

Coal Bed Methane (CBM) work areas. In addition, there were also some work areas that have

been terminated due to incompletion of commitments. Given those activities, as of end 2010,

Indonesia owned a total of 245 work areas comprising 67 production work areas and 178

others that were under exploration.

ADDITIONAL WORK AREAS

Yeas

New PSC

Production PSC

2005

7

5

2006

5

0

2007

28

0

2008

41

0

2009

33

1

2010

27

1

Meanwhile, the Exploration work areas consisted of 23 Coal Bed Methane (CBM) work areas,

150 O&G work areas and 5 (five) terminated work areas due to unfulfilled commitments. Those

5 (five) terminated work areas were Yapen (Nations Petroleum) and East Bawean II (Husky

Oil), Rembang (Orna International Ltd.), Offshore Halmahera Maluku (Halmahera Petroleum

Ltd.) and Donggala (Santos).

Throughout 2010, BPMIGAS also provided recommendations to the government (O&G

Directorate General) to determine the terms and conditions to be applied at 44 new O&G

work areas and 8 (eight) CBM work areas. This activity was conducted ar part of BPMIGAS

main responsibilities for providing inputs to the government prior to establishment of new

work areas.

Exploration activity is carried out to search for more accurate and detailed information about

conditions of the working areas as well as the O&G resources both in the Exploration and

Production work areas. The exploration activities include geophysical activities (through 2D

seismic and 3D seismic surveys), exploration drilling, coring and production examination. In

parallel, the CBM work areas conducted extra drilling and dewatering activities.

Both the Geology and Geophysics (G&G) study and Technical Assistance from Abroad (TSA)

implementations were undertaken after approval from the Authorization For Expenditure

(AFE). In 2010, there were 259 AFE G&G Studies and 36 AFE TSA explorations. Moreover,

budgeting for the G&G Study and TSA exploration totaled US$78.95 million, which covered

US$70.64 million (89%) for the G&G study allocation and US$8.31 million (11%) was allocated

for the TSA.

G & G STUDY AND TSA

For the 2D seismic survey, we have completed 89% or 27,606 km out of 31,181 km being planned.

As for the 3D seismic survey, an area of 7,411 km2 has been realized, which represented 81%

of 9,612 km2 being planned. The main constraint lied on land acquisition activities that will

be involved to support successful seismic activity. BPMIGAS then coordinated with related

agencies (mainly the BPN and the Ministry of Forestry) to overcome these obstacles.

GEOPHYSICS SURVEY

3500030000250002000015000100005000

0

2004 2005 2006 2007 2008 2009 2010

2D Seismic Realization (km) 3D Seismic Realization (km2)

EXPLORATION ACTIVITIES02

WORK AREA OF UPSTREAM OIL AND GAS INDUSTRY

WORK AREA OF UPSTREAM OIL AND GAS INDUSTRY01

SEISMIC SURVEY REALIZATION



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Throughout 2010, the actual well drilling explorations totaled 95 wells or 75.4% of 126 wells

being planned. In year 2010, total realization of the successful drilled exploration wells was

21% higher than the year 2009 figure. Some activities are still underway beyond what has

been initially scheduled, and the delay was mainly caused by land acquisition and licensing

issues. Moreover, those activities that were incomplete in year 2010 will be carried over into

year 2011 realization.

EXPLORATION DRILLING

Total Well Realization

Wildcat Well Realization

Delineated Well Realization

CBM Well Realization

100

90

80

70

60

50

40

30

20

102003 2004 2005 2006 2007 2008 2009 2010

COMMITTED TO THE ‘PASTI’ PROMISEDuring year 2010, a firm compliance to the definitely (pasti) promise throughout the

exploration work areas during the ongoing seismic activities experienced many on-field

obstacles and that caused incomplete realization. For instance, 69% of the 2D seismic

activity has been accomplished while the 3D seismic activity achieved 45% of the total plan.

0

69%

0%

0%

9%

24%

26%

Realisasi Rencana

26%

Production Test

Dewatering

CBM Drilling

Coring

Eks Drilling

3D Seismic (Km2)

2D Seismic (Km)

20 40 60 80 100

Some of the main obstacles we faced last year were related to the procurement of supporting

equipment needed in the seismic activity including rigs and ships (23%), licensing problems

in the working area (13%), overlapping of activities such as with forestry (22%), social

community problems (2%) and country border disputes (2%).

Due to all the problems we faced in the work areas, 44 Exploration areas have not been

implemented accordingly to the pasti commitment, as it is stated in the contract.

Meanwhile there were only 4 (four) Exploration work areas that have successfully met the

pasti commitments in accordance with the signed contract terms and conditions, which

prevailed in Batanghari in Jambi (CNOOC Batanghari Ltd.), Sekayu in South Sumatra (Star

Energy (Sekayu) Ltd., Karang Agung in Musi Banyu Asin (PT Odira Energy Karang Agung) and

Randugunting in West Java (PT Pertamina EP).

In fulfilling the pasti commitment, North East Madura (NEM) III work area manager Anadarko

proposed to the Directorate General of O&G as regards amendments to the pasti commitment,

and has gained the Government approval (O&G Directorate) on specific issues related to the

purchase of 3D seismic data for a 2,560 km2 area, which then was noted as meeting the

past commitments.

G&G Technique/ exploration strategy

Local government permit

Forestry overlapping

Internal issues/ non-active

Electricity/ Power quota

Socio-community

Rig/ ship supply, etc

32%

13%

9%

23%

2%

19%

2%

DRILLING ACTIVITY REALIZATION

WORK PLAN AND REALIZATION OF PASTI IMPLEMENTATION IN 2010

PROBLEMS FACED IN EXPLORATION WORK AREAS

DISCOVERY OF RESERVESThrough the well drilling activities conducted at 20 wells located in Exploration and Production

working areas in year 2010, BPMIGAS founded 20 prospective wells containing promising oil

and gas reserves. In total, we found about 140 million barrels of oil (MMBO) and 2,095 billion

cubic feet of natural gas (BCFG) or equivalent to 490 MMBOE.

To date, supported by the discovery of new petroleum reserves in 2010, which amounted to

140.2 MMBO and total production of 344.9 MMBO (945 MBOPD), the reserve replacement rate

(RRR) for year 2010 reached 41%. In other words, each production of 1 (one) barrel petroleum

was replaced only by 0.41 barrels of exploration results. Ideally, for a minimum production of

1 (one) barrel of oil can be replaced with 1 (one) barrel of exploration discovery.

Discovery of

contingency reserves

in year 2010 amounted

to 489.4 million barrels

of oil equivalent



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With the new findings, the amount of proven and potential reserves of oil and natural gas

as of 1 January 2011 recorded 7.41 billion barrels of oil and 153.72 TSCF or equivalent to 33.04

billion BOE. Details of Indonesia’s oil and gas reserves are as follows:

Given the current reserves’ findings, if we are producing at the current production capacity,

thus, the Indonesian oil reserves can meet the energy needs demanded for next 12 years,

while the natural gas can meet the next 46 years of gas demand.

TOTAL

JOB Working Area Well’s Name MMBO BCF G MMBOE

PT. PERTAMINA EP

Petro China International Jabung Ltd.

Petro China International (Bermuda)Ltd.

PT. Seleraya Merangin Dua

Eni Muara Bakau BV.

Anadarko Indonesia Nunukan Company

OT. Chevron Pacific Indonesia

JOB Pertamina-Petrochina East Java

PT. Sumatera Persada Energi

CITIC Seram Energy Limited

Serica Kutei B.V.

0

0

0

0

0

12.6

12.7

6

23.1

0

38.7

729.8

318.4

426.7

492

0

0.075

0

0

35

2095.1

1.1

7.6

1.9

3.3

15.5

2.1

2.1

8

5.8

2.3

15.8

121.6

53.1

71.1

170.5

0.7

0.1

1

0.1

5.8

489.5

1.1

7.6

1.9

3.3

15.5

0

0

7

2

2.3

9.4

0

0

0

88.5

0.7

0.1

1

0.1

0

140.2

Pondok Makmur-C

Pondok Makmur-D

Pondok Makmur-E

Jati Keling

PrabuMenang

PagarDewa Selatan-1

North Kedung Tuban-A

Panen Utara-1

Sabar-3

North Walio-1

West Belani Ext.1

Jangkrik-1

Jangkrik-2

Jangkrik-3

Badik-1/ST1

Prima-1

Lengowangi-2A

Pendalian-4

Nief Utara A-3 (USRD)

Dambus-1

Indonesia

Jabung

Kepala Burung

Merangin II

Muara Bakau

Nunukan

Rokan

Tuban

West Kampar

Seram

Kutai

PRODUCTION ACTIVITIES 03

FIELD DEVELOPMENT PLANDuring year 2010, BPMIGAS received 48 proposals for this field development conducted by

the PSC Contractor (Plan of Development-POD). Through evaluation process, 32 documents

have been approved, 9 (nine) documents are still under evaluation and 7 (seven) POD were

returned. Most of the POD returned documents were lack of comprehensive data, which

made the evaluation process difficult.

Out of all approved POD, it is expected that these fields’ development can reach 194.1 MMBO

of oil production and 1533.74 BSCF of gas production. The costs required to develop the field

amounted to US$3.33 billion.

9

7

32

Approved plan

Returned plan

Decision in-porgress

0.23

1.01

3.33

Dalam Miliar US$ Investment

OPEX

ASR

RESERVES DISCOVERY IN 2010

Reserves

Oil+Condensate

(MMSTB)

GAS (Associated + Non Associated)(TSCF)

Oil+Gas (MMBOE)

Produced

Proven

3.604,56

36,08

9.617,83

Potential

3.089,58

15,08

5.599,45

Proven

280,78

68,90

11.764,89

Potential

444,73

33,67

6.055,82

7.419,64

153,72

33.040,98

TotalNot yet produced

INDONESIA RESERVES’ STATUS IN 2010

POD PROPOSED BY THE PSC CONTRACTOR IN 2010

RINCIAN BIAYA YANG TERCANTUM DALAM POD 2010



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In effort of reducing the declining rate of the completed field production, the PSC Contractor

have carried out additional well drillings (infill/insertion wells) as well as well maintenance. In

2010, total number of well drilling or exploitation activities reached 951 well drillings, which

exceeded 933 wells as targeted for year 2010.

EXPLOITATION & WORKOVER OF WELL DRILLING

In year 2010, well maintenance activities were completed through work-over and well service

to a total of 1,439 wells, which represented 97% of the targeted 1,487 wells. Most of the

workover activities have been performed in PT CPI’s working areas.

WELL DRILLING PLAN AND REALIZATION EOR PROGRAM IMPLEMENTATION IN 2010

1400

1200

1000

800

600

400

200

0

Planned

Realization

2005 2006 2007 2008 2009 2010

WP&B

Realization

2009

WORKOVER REALIZATION

1700

1650

1600

1550

1500

1450

1400

1350

13002010

Jum

lah

Wor

kove

rENHANCED OIL RECOVERY (EOR) ACTIVITY

EOR is considered as an advanced drain technology adopting water injection, steam,

chemicals, gases and microbes to enhance production of the already mature oil fields. In

2010, a number of PSC contractors strived to increase production using EOR technology

through water injection, steam injection, gas injection and chemical injection. Through EOR

activities, total oil production reached 332,717 BOPD.

PSC Contractor

PT CPI

PT Medco E&P

PT Pertamina EP

PT BOB - BSP

Total Indonesie

CNOOC

JOB Pertamina - Talisman

PT CPI

Field

Minas, Bekasap, Bangko, Balam South,Telisa, Libo SE, Kota Batak, Pungut,Cebakan dan Aman

Rantau, Talang Akar, Supa, Sago, TL. Jimar,Tanjung, Benakat, Benakat Timur, TT Barat, Beragai, Lirik, Kenali Asam, Tempino, Limau, Nglabo dan Kawengan

Krisna Upper BRF, Krisna Lower BRF, Widuri, Intan, Vita Anryani, East Widuri dan Zelda

NE Air Serdang dan Guruh

Duri dan NDD

Zamrud, Pusaka, Beruk, Peudada dan Sabak

Handil Phase I dan II

Kaji Semoga

TambahanMinyak(Incremental Oil)BOPD

98,526

3,525

26,438

7,620

3,075

4,808

4,678

184,047

148,670

184,047

332,717

ProduksiPrimer(Baseline)BOPD

17,962

8,653

-

-

-

-

-

31,761

1,459

31,761

3,687

Water Flood

Steam Flood

Total Water Flood

Total Steam Flood

Total EOR

Some EOR activities have been undertaken in Handil Field, East Kalimantan managed by

Total E&P Indonesie by injecting gas into the reservoir. To date, this activity was stopped

from proceeding further because the injected gas we normally use in production was being

utilized to meet commitments to the buyers.

Currently, some PSC Contractors are performing EOR studies. Among others, include, PT

Chevron Pacific Indonesia who studied the Minas Field (using chemical) and PT Medco E&P

who studied Kaji Semoga Field (using chemical). For that reason, BPMIGAS encouraged the

PSC Contractors to increase their production using these technologies.



2019

OIL AND GAS PRODUCTION04

In 2010, the actual of Indonesia’s oil and gas production amounted to 2.52 million barrels

of oil equivalent per day (BOEPD) or 6.56% higher than year 2009 realization of production.

That increase in gas production was considered significant as it recorded the highest level

throughout Indonesian oil and gas history, which eventually boosted the overall oil and gas

production. That increase in year 2010 natural gas production has also brought a notable

production level as much as year 2003 production achievement. That represents a gradual

increase in the decreasing production that have occurred since 2003.

BPMIGAS WP&B has successfully gained approval prior to end of year, which has allowed the

PSC Contractors to carry out production since early year 2010. The increasing production

trend was indicated by the actual production recorded in January to September 2010, so that

the average daily production can reach the budgeting target at around 965 thousand BOPD.

OIL AND CONDESATE

2,750

2,500

2,250

2,000

1,750

1,500

1,250

1,000

750

500

2502000 2001 2002 2003 2004 2005 2006 2007

Gas Kondensat Minyak

2008 2009 2010

Rib

u B

OEP

D

950,000

900,000

850,000

800,000

750,000JAN-10 FEB-10 MAR-10 APR-10 MAY-10 JUN-10 JUL-10 AUG-10 SEP-10 OCT-10 NOV-10 DEC-10

APBN= 965 MBOPD

OIL AND CONDENSATE PRODUCTION FOR YEAR 2010 - (BOPD)

As of end September 2010, the oil pipeline operated by Indonesia Gas Transportation (TGI)

experienced a broke down and that caused 3 (three) PSC Contractors to stop their production

for several days as their pipes could not properly deliver their oil to Dumai storage tanks. The

three PSC Contractors include PT CPI, PT BOB BSP and PT SPR Langgak. As a result, national

gas production decreased to 166.5 thousand BOPD, which eventually took a long time and

needed extra efforts to restore production to its initial level of production.

Other operation disorders have contributed significantly to the declining oil production

throughout 2010 was the crash incident of TO-40 owned by Kodeco Energy Co by an unknown

ship who is still unidentified up to now. Due to improper functioning of the ship, eventually,

the oil production decreased to 2,400 BOPD.

Given the fact that most of the oil production facilities have been in operation for more than 20

years, incidents like unplanned shutdown were also being inevitable operation constraints.

Due to the above mentioned various disorders, there were only 14 PSC Oil Contractors that

could meet the targeted state budget, namely: Kodeco, Santos (Sampang), Vico, Medco

(Tarakan), JOB Pertamina - PetroChina (Salawati), JOB Pertamina - Talisman OK, ExxonMobil

Oil Ind., Chevron Indonesia, ConocoPhillips, JOB Pertamina, PetroChina East Java, PHE ONWJ,

Pertamina, Total E & P Indonesie and PT CPI. To date, the actual oil and condensate production

recorded 945 thousand BOPD in 2010 or 97.9% of the targeted state budget of 965 thousand

BOPD.

14,043 BOPD57.8%

2,496BOPD9.6%

4,156 BOPD16%

80BOPD0.3%

4,130 BOPD14.4%

481 BOPD1.9%

25,946 BOPD100%

1 12 1 71 1

282196

UnplannedShutdown

Project Involvement

Offtaker New Project Below Surface

Extension of Shutdown

Total

Seleraya& KEI

JOBP - Tallsman(Jambi-Merang)

CNOOC

Produk tidak terealisasi Frekuensi

Pecahpipa TGI

7000BOPD

REALIZATION OF OIL AND GAS PRODUCTION



21 22

NATURAL GAS

Apart from the ongoing Tangguh project managed by BP Indonesia, the national gas production

have also been contributed by the fields operated by Total E&P Indonesie in East Kalimantan,

Pertamina EP in regions I, II and III, PHE, ConocoPhillips in Sumatra and Natuna, Vico Indonesia in

East Kalimantan and other fields by Exxon Mobil in Aceh, Petrochina Jabung in Jambi, and Kodeco

Energy.

During the past recent years, realization of natural gas production has been gradually

increasing and in 2010 was realized at the highest level throughout the Indonesian oil and gas

history, that was equal to 8,857 MMSCFD or 11% increase from year 2009 production which

amounted to 7,962 MMSCFD. The increase in production was achieved after completion of

Indonesia’s Tangguh project in Papua.

2003 2004 2005 2006 2007 2008 2009 2010

4

2

0

-2

-4

-6

-8

-10

-12

-14

Pro

duk

si M

inya

k

Penurunan (%)

Kenaikan(%)

Out of those various efforts being carried out so far, the production decline rate could be

reduced from 8.4% in 2003 to only 0.43% in 2010.

Throughout 2010, we experienced a relatively low gas production facility disorder considering

that our natural gas production facilities that are still relatively new. The occurring production

decrease mostly due to non-operational factors such as maintenance activities, equipment

replacement and decrease of consumer demand.

PRODUCTION AND DISTRIBUTION OF GAS IN 2010 - [MMSCFD]

REDUCTION RATE OF PRODUCTION

NATIONAL GAS PRODUCTION

9,600

9,200

8,800

8,400

8,000

7,600

7,200

6,800

6,400

6,000

Produksi

Penyaluran

Lifting APBN = 7,758 MMSCFD

Jan Feb Mar Apr Mei Jun Jul Agt Sep Okt Nov Des

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

-2000 2001 2002 2003 2004 2005 2006 2007

Gas

2009 2010

M

M

S

C

F

D

2008

PETROLEUM PRODUCTION DECLINE RATE INITIATIVES

Most of the national petroleum production generated by the old O&G fields that have

experienced natural production decline of about 7-12% per year. To push down the overall

natural production decline rate, various efforts have been realized such as through

intensification initiatives (among others were to increase seismic and EOR activities) as well

as business expansion efforts by proposing new blocks to the O&G Directorate General.

Utilization of gas to

meet domestic needs



2423

PETROLEUM AND NATURAL GAS LIFTING05

Realization of petroleum lifting in 2010 was 954 thousand BOPD. This achievement was

98.9% of the target set by the Government and the House of Representatives in the 2010

State Budget amounting to 965 thousand BOPD. Realization of petroleum lifting was higher

than production due to the usage of stocks from previous year.

PETROLEUM LIFTING

In the meantime, natural gas lifting increased by 11% to 7,681 BBTUD in 2010 from 6,943 BBTUD

in year 2009. This increase in lifting is aligned with the increase in natural gas production

throughout 2010.

Natural gas lifting is utilized to meet both domestic and export needs. In 2010, there was

an increase in export, which was due to the start of production of LNG Tangguh Refinery in

Papua specifically dedicated for export.

NATURAL GAS LIFTING

06STATE REVENUE AND COST RECOVERY

US$ 26.49 billion of

state revenue or 32.78%

increase compared to

state revenue in 2009

2.27 million BOEPD

oil and gas lifting

or increase by

11.7% from lifting

realization in 2009

Upstream oil and gas industries are among the main sectors that stimulate Indonesia’s

economic growth. In 2010, state revenue from oil and gas sectors amounted to US$26,489

billion or an increase by 32.78% compared to revenue in 2009 which was US$19,950 billion.

The above realization of state revenue in 2010 also reached beyond the state budget in 2010

which was US$26,060 billion. The main contributing factor for this achievement in state

revenue was the realization of a lower cost recovery from the state budget target.

The above State Revenue is exclusive of potential state revenue derived from indirect taxes

such as Land and Property Tax, VAT, Local Tax, and Income Tax of employees working in

upstream oil and gas industries which all amounts to Rp26.9 trillion.

STATE REVENUE YEAR 2005-2011

60

50

40

30

20

10

Mili

ar U

S$

2005 2006 2007 2008 2009 2010

Gross Revenue

Cost Recovery

Indonesian Share

Net Contractor Share

DEVELOPMENT OF INDIRECT TAXES FROM OIL AND GAS INDUSTRIES IN 2006-2010

2006 2007 2008 2009 2010

30,000

25,000

20,000

15,000

10,000

5,000

0

Value Added Tax

Property TaxM

iliar

Ru

pia

h

Production (BOPD) Lifting (BOPD) Total Stock (BBL)

1.100

1.000

900

800

700

600

500JAN FEB MAR APR MEI JUN JUL AGU SEP OKT NOV DES

16

13

10

7

4

1

- 2Pro

duk

si /

Lift

ing

(rib

u B

OP

D)

Sto

k B

BL

(juta

)

PETROLEUM LIFTING AND SUPPLY

For the last decade of state revenue, upstream oil and gas industries have contributed

20% to 30% of the total state revenue. As a business entity, for the period of 2005 to 2010,

upstream oil and gas industries have consistently shown an average of above 400% Revenue

to Cost Ratio. This means that every US$1 paid as a cost can generate at least US$4. This

condition shows that cost recovery paid from oil and gas proceeds is able to boost higher

state revenue. Realization of cost recovery in 2010 amounted to US$12 billion, 1.5% below the

state budget target which was US$12.2 billion.

REALIZATION OF NATURAL GAS LIFTING5,000

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

-

Export Domestik

20062005

Tangguh 710 BBTUD

20042003 2007 2008 2009 2010

BB

TUD



2625

07INVESTMENT REALIZATION

Investment in upstream oil and gas industries within the past 5 (five) years demonstrated

a highly positive development, which was shown by the high amount of expenditures. Total

expenditures disbursed in the period of 2006-2010 reached US$54.42 billion. At least 20%

from the above mentioned value was invested in capital expenditures, which was a guarantee

for the sustainability of oil and gas production level in Indonesia. The aforementioned Capital

Expenditures are addition of state assets in the oil and gas industries.

Compared to the investment done by industries from other sectors, investment in upstream

oil and gas industries is the biggest. Its role in increasing Gross Domestic Product (GDP) and

economic growth is highly significant, hence the positive trend in investing in upstream oil

and gas industries must be maintained through a favorable investment policy.

Throughout 2010, there were still several challenges that hindered the realization of

investment in upstream oil and gas. Most of the challenges emerged as a result of the

issuance of a regulation that did not suit the situation and condition of Indonesia’s upstream

oil and gas industries nor correspond with existing regulations.

The result of such overlapping of regulations is rather substantial for the realization of

investment, as upstream oil and gas industries demanded clarity in regulations for better

assurance in investment, bearing in mind that the total amount invested is reasonably high.

Several new regulations have proven to be directly disruptive of the production process as

PSC Contractor was charged to add cost that was relatively high in a fairly short time.

Legislation No. 17 year 2008 regarding Shipping required effective implementation of

cabotage principle by year 2011, at the latest, for all types of vessels operating in Indonesian

sea. Those issues emerged due to the fact that the use of vessels in upstream oil and gas

industries are being mandatory requirement such as seismic, well drilling and maintenance.

Up to today, no single national company is able to provide what is being required as we need

several years time to build it.

REALIZATION OF UPSTREAM OIL AND GAS INVESTMENT

*) As of 22 February 2011, the 2010 data was still considered provisional

Capital Non Capital

2006 2007 2008 2009 2010

14

12

10

8

6

4

2

Juta

US

$

INVESTMENT CHALLENGES

The reinforcement of regulation without considering the vessels’ duties and functions,

have caused operational disruptions to occur rather significantly. For instance there were

several drilling vessels that have completed their contract period, yet they must immediately

leave Indonesian water although they have not yet completed their activities. Several PSC

Contractors also faced difficulties in leasing seismic vessels used for drilling purpose in 2011,

as domestic companies are not yet able to provide the vessels as required.

Government Regulations No 79 year 2010 regarding Reimbursable Operational Cost and

Enforcement on Income Tax in Upstream Oil and Gas Business Sector. Although this regulation

provides several legal assurances in taxation (enforcement on provisions of lex specialist

for PSC Contractor exploration) and provides more flexibility in the usage of cost recovery

without restriction (capping), however, investors view that the regulation still contains

provisions that dishonor the sanctity of contract.

Law No 26 year 2007 regarding Spatial Organization. Based on the aforementioned Law, Local

Governments are authorized to organize their respective regional spaces. However in the

establishment of Regional Spatial Plan, activities from upstream oil and gas sector are often

disregarded as they are not viewed as vital national objects. Their presence have only been

considered as regular projects by private companies.

Law No 32 year 2009 regarding the Environment. Enforcement of this Law has created issues

for upstream oil and gas operations when a ministerial regulation, Ministerial Regulation No.04

year 2007 being issued. The problem mainly lied in Article 2 Appendix I, which stated that

waste water quality standard/reproduced water can only be disposed to the environment if

its temperature is already below 40 degrees Celsius. Meanwhile other industries including

geothermal/oil refinery/LNG refinery/LPG refinery are still allowed to dispose with maximum

temperature of 45 degrees Celsius. As a result of such change, existing production

equipment must be renovated, hence relevant PSC Contractor must provide additional cost

and time for procurement of equipment. Eventually this regulation created a burden for the

PSC Contractors, however, the problems can be overcome by means of a policy allowing

additional time for contractors to renovate their equipment.

There are still some local regulations that conflict with the central government’s regulations,

therefore, burdening the implementation of activities in upstream oil and gas at regional level.

Overlapping of land for upstream oil and gas and other activities. The issue of land acquisition

to support upstream oil and gas activities is one of the main disruptions that caused

investment plan not being able to be implemented in 2010. To settle this issue, several steps

have been undertaken by BPMIGAS, for instance by coordinating with the Minister of Forestry

(for cases on land acquisition that intersect with forestry zone), coordinating with National

Land Registry and establishing an ad hoc team to directly assist PSC Contractors team

in acquiring land from the community. This last method has proven to be effective when

assisting the process of land acquisition for MCL project in Cepu.

PELAKSANAAN PROYEK HULU MINYAK DAN GAS BUMI

2

BPMIGAS Annual Report 2010 28 30

ONSHORE PROJETCS IMPLEMENTATION

FULL SCALE DEVELOPMENT OF BANYU URIP FIELDA

01

Several upstream oil and natural gas projects that were

implemented in 2010 are categorized as main projects. This

classification takes into account the investment value needed

to implement the projects, the output that will be produced by

such projects or supporting state-of-the-art technology that

will be used. Some parts of the projects are located offshore

and some are onshore. BPMIGAS and PSC Contractor strive

to ensure that the projects can be implemented on time to

achieve the target for oil and natural gas production.

The development of Banyu Urip Field at the Cepu Block Onshore working area was conducted

by Mobil Cepu Limited (MCL). The construction of the project was divided into 2 (two) phases,

namely early production facilities and full-scale construction. The target for early production

stage was for petroleum production to reach approximately 20 thousand BOPD by the end

of 2009, while the target for full-scale phase was the production of approximately 165

thousand BOPD by the end of 2013.

The early production stage was completed on 31 August 2009 with an estimated production

level of 1,700 BOPD. Production could then be increased gradually so that throughout 2010

the project has produced an average production of 18,500 BOPD.

Meanwhile, in order to support the realization of full-scale projects, throughout 2010 BPMIGAS

approved the project procurement plan, namely procurement of production facilities

(Engineering Procurement Construction/EPC-1), provision of pipes on land (EPC-2), provision

of pipes at sea (EPC-3), provision of floating storage and offloading (EPC- 4) and provision for

supporting infrastructure (EPC-5). At the end of 2010, tender process for the five EPCs was

underway and the auction winner is scheduled to be announced in early April 2011.

Procurement of a 700-hectare land to support the project implementation has also increased

considerably compared to previous years. This achievement was the result of intensive

cooperation between BPMIGAS team and the District Land Office of Tuban and Bojonegoro in

processing the letters and map areas of the acquired land.

At the end of 2010, land acquisition for the Central Field Facilities (CFF) has reached 73%

and land acquisition for Right of Way (ROW)/onshore pipeline was able to be completed

approximately 84%. Meanwhile land for infrastructure facilities (EPC-5) of 204 hectares had

been 100% acquired with assistance from locally-owned enterprise in Bojonegoro District.

All payments and signing of the Deed of Release of Land Rights is equipped with supporting

documents.


Pelaksanaan Proyek Hulu Minyak dan Gas Bumi

DEVELOPMENT OF JAMBI MERANG PROJECT

DEVELOPMENT OF BETARA BCD-4 PROJECT

B

C

Construction of Jambi Merang Project in South Sumatra was implemented by JOB Pertamina -

Talisman Jambi Merang. Implementation of the project which included 2 (two) fields, namely

Pulau Gading and Sungai Kenawang was expected to yield 120 BBTUD of natural gas and

12,500 BOEPD of condensate. The natural gas will be partly used to support operational

needs of Duri Field managed by Chevron Pacific Indonesia (CPI) for steam flood purposes in

order for Duri Field’s production target to be achieved. Meanwhile the rest of the natural gas

will be used to meet the needs of industries in West Java.

Approximately US$464.4 million investment was needed to implement the project, which

among others was utilised for:

Building natural gas production facilities in Pulau Gading in the form of separator

facility with a capacity of 95 MMSCFD (feed gas).

Building Central Gas Production Facilities in Kenawang River in the form of

separator and natural gas purification facilities, as well as Condensate Recovery

with a capacity of 155 MMSCFD.

Installation of natural gas distribution pipeline from Kenawang River Gas Plant to

pipelines operated by PT Transportation Gas Indonesia (TGI), along 14 km in order

for natural gas to be streamed to Duri Field, PKB PDPE Batam and South Sumatra.

Installation of distribution pipelines for natural gas and condensate from Pulau

Gading to Kenawang River Gas Plant along 11.5 km as well as condensate distribution

pipelines from Kenawang River Gas Plant to North Geragai Facilites (usage of shared

facilities with PetroChina Jabung) along 110 km.

Until the end of 2010 the construction of Kenawang River Central Gas Production Facilities

and Pulau Gading Gas Production Facilities has reached 99.2%, pipe-connecting (tiein) to

North Geragai Facilities reached 77.1% and tie-in to the TGI gas pipeline reached 20.8%.The

entire project is scheduled for completion by the first semester of 2011.

Betara Project in Jambi Province was implemented by PetroChina International Jabung Ltd.

BCD-4 Project is a continuation of the Betara Field development project with a view to benefit

from burned natural gas (flaring) from associated Betara South West Area and West Betara

as well as construction of petroleum pipeline with a capacity of 9300 BOPD. The construction

of pipeline was done to substitute transporting of petroleum that has been done by truck

(temporary trucking). The works include compressor installation, flowlines and gathering

system for wells and installation of vapor recovery system.

At the end of December 2010 the implementation of the project reached 95.34% and was

expected to be completed in the second quarter of 2011. Investment for the construction of

the BCD-4 production facilities is estimated at US$122.5 thousand.

SINGA FIELD DEVELOPMENT

NORTH DURI DEVELOPMENT (NDD) AREA-12

D

E

Development and construction project of the Central Processing Plant (CPP) Singa Field,

which was conducted by Medco E & P Lematang, was located in South Sumatra Province.

Projects were undertaken to support the production of Singa-1 Field, Singa-3 and Singa-4

that were expected to produce approximately 50 MMSCFD of natural gas. Based on the sales

agreement that has already been signed, natural gas will be used by PT Perusahaan Gas

Negara (PGN).

Construction work had commenced in January 2008 and was completed at the end of 2010

as it has produced approximately 30 MMSCFD of natural gas from Singa-3 Well. Overall

completion of the project was delayed from its original plan, which was December 2009. This

was due to the delay in completion of Singa-1 and Singa-4 wells’ drillings, hence the supply

of natural gas for commissioning activities could not be undertaken.

North Duri Field is located in Riau Province and is operated by PT Chevron Pacific Indonesia (PT

CPI). With a view to maintain and increase field production, Area-12 was developed in 2010,

which was also part of the development of Area-13 and Area-14. Area-12 has commenced

production since 2008. The development of this area is expected to produce approximately

34 thousand BOPD in 2011.

The scope of work carried out as part of NDD Area-12’s development activities included

building a test station, CVC (Casing Vapor Collection), Degassin, piping systems, electrical

and instrumentation as well as construction of Area-12 main road to facilitate mobilization

to the field. Investments that were reserved for this project was approximately US$207.7

million, while the estimated cost of the project to completion was approximately US$168.4

million.

At the end of 2010, completion of the project has reached 99.2%. Finalization of work

includes performance improvement of supporting facilities that are unrelated to the main

facility.



MINAS SURFACTANT FIELD TRIAL 2 F

Projects implemented in Minas Field by PT CPI is a study to gather information needed for

implementation of a large scale Enhanced Oil Recovery (EOR) program. To assist the process

of extracting natural oil from Minas Field, PT CPI currently uses water flooding technology,

which is by injecting hot water into the reservoir so that the oil is pushed to the surface.

However, such technology has not been able to lift the entire oil from the reservoir. Minas

Field is estimated to still contain petroleum of more than 4 (four) billion barrels which can

not be recovered by means of water flooding. The application of surfactant technology/EOR

polymer (chemical) is expected to assist the extraction of 841 million barrels of petroleum.

Investment cost for this project is estimated to be US$157.3 million, which will be used for

the construction of production facilities, wells drilling, procurement of chemical substances

and project management. For pilot project purpose, the ongoing development wells included

chemical injection wells, production wells, monitor wells, S-sand injection well and coring

wells.

Until the end of 2010, implementation of the overall project has reached 66.2%, and it is

expected that the first injection activities can be done at the end of March 2012.

DEVELOPMENT OF SOUTH SEMBAKUNG NATURAL GAS FIELD

G

Development of South Sembakung Field, which is located in Simenggaris Onshore Block in

the northern part of East Kalimantan Province, is conducted by JOB Pertamina Medco Pty

Simenggaris. Ltd. Based on the Plan of Development (POD) approved by BPMIGAS, the project

cost is approximately US$22 million.

Field construction is done through the installation of pipes and gas manifold to distribute

production from wells with a production of 25 MMSCFD, headed for Methanol Bunyu Refinery

(KMB), which will be built by Pertagas - Medco Gas Consortium.

Production activities are scheduled to be carried out in December 2011. In late 2010, the

progress of the project has reached 10.03%, which is in line with the set target.

IDD Project is a development of 5 (five) natural gas fields in Makassar’s deep water (between

975 m - 1785 m) in 4 (four) working areas, namely Ganal, Rapak, Makassar Strait and Bakau

Estuary. The fields that were developed include Gendalo, Maha, Gandang, Gehem and

Bangka Fields. Gendalo Field is a unitization between Ganal working areas and Makassar

Strait; Maha Field is a unitization between Ganal working area, Makassar Strait and Bakau

Estuary, while Gehem Field is the unitization between Ganal working area and Rapak and

Bangka Field in Rapak Working Area. The operator for this PSC unitization implementation is

Chevron Indonesia Company (CICo).

These fields’ development has been done in an integrated manner to meet the domestic

and export needs for natural gas. The natural gas allocated for export would be initially

processed into LNG at the LNG Bontang Refinery, which is also located in East Kalimantan.

The project scope consisted of wells drilling and construction of production facilities. The

production facilities that will be developed are: subsea flowline will be built in Bangka Field

from the wells headed to the West Seno Floating Production Unit (FPU) (existing); FPU,

subsea completion and production pipeline will be built at Gehem Field headed to Santan

Terminal. Meanwhile, some facilities will be built in Gendalo Field that is also utlized as a Hub;

those facilities include FPU, subsea completion and production pipeline headed to Santan

Terminal.

It is scheduled that in the 3rd (third) quarter of 2014, the delivery of 120 MMSCFD of natural

gas and condensate of 2,880 BOPD to consumers will begin from Bangka Field. Production

will be increased gradually, therefore by 2017 natural gas production will reach its peak of

924 MMSCFD and condensates will amount to 23 thousand BOPD. Afterwards, the production

will decline until it reaches economic limit in 2028.

Investment for the development of IDD Project is estimated to cost US$6.98 billion, which

will be used to finance drilling and construction of production facilities. In the meantime to

reduce the environmental impact resulted from the activities, CICo has also prepared the EIA

Terms of Reference, which is expected to be approved by the Ministry of Environment by the

end of 2011.

OFFSHORE PROJECTS IMPLEMENTATION

INDONESIAN DEEPWATER DEVELOPMENT (IDD)A

02



Abadi Natural Gas Field was discovered in December 2000 through drilling of Abadi # 1

exploration well at Masela Block operated by INPEX. Abadi Field is located in West Southeast

Maluku District (MTB), in the Arafura Sea, located approximately 350 km east of Timor Island

with depth of sea ranging between 400-700 meters.

The Government (Minister of Energy and Mineral Resources) has issued approval of the First

POD for Abadi Field Masela Block on 6 December 2010. The project was developed by using

Floating LNG with a capacity of 2.5 MTPA.

The first phase of field construction was designed with an estimated investment cost of

US$4.99 billion and an operational cost of US$4.01 billion. Natural gas production is expected

to be achieved in 2016 with an average production of 355 MMSCFD for 30 years. The initial

production of 7,106 BOPD condensate will be increased gradually to 8,194 BOPD between

year 2020 to 2041 period. After the above period, production is expected to decline until year

2049.

DEVELOPMENT OF ABADI MASELA GAS FIELD B

DEVELOPMENT OF APN E AND APN F GAS FIELDSC

APN E and APN F Gas Fields are located in the Offshore North West Java working area

operated by Pertamina Hulu Energy Offshore Northwest Java Ltd (PHE ONWJ). Investment

being allocated for the construction of production facilities for this development project is

estimated to cost US$97.26 million.

The development of APN E/F Gas Fields was done to increase gas production in order to meet

the increase in consumer demand, for example, to meet the needs of Pupuk Kujang. The

entire project construction is scheduled to be completed by December 2011.

DEVELOPMENT OF GAJAH BARU-NATUNA SEA BLOCK A FIELD

D

Gajah Baru Field is located in the southern part of Natuna Sea Block A working area, operated

by Premier Oil Natuna Sea B.V. (PONSBV). The development of this field is based on the POD

approval for Gajah Baru, Iguana and Naga Fields on 14 April 2008 with a total investment cost

for the production facilities of US$873 million. In addition, particularly for Gajah Baru Field

development, an investment of US$418 million will be used for Central Processing Platform

(CPP), Wellhead Platform (WP), pipeline and Onshore Receiving Facilities (ORF).

Gajah Baru Field is developed to meet the commitment of providing natural gas to domestic

consumers in Batam area, which are PT PLN and PT UBE as well as foreign consumer, namely

Sembgas (Singapore). Year 2011 is the year we are committed to deliver natural gas from

Gajah Baru Field. At the end of 2010, development of the project had reached 74.7%.

Tunu Field is a giant field with a length of approximately 75 km and an estimated width of 18

km on the banks of the Mahakam Delta, East Kalimantan. Tunu Field is operated by Total E&P

Indonesie (TEPI) based on the Mahakam Production Sharing Contract (TEPI and INPEX, each

holds 50% shares). This field supplies LNG Bontang Refinery’s natural gas needs (for further

export) and for domestic consumers, such as PT Pupuk Kaltim and PLN.

Development of Tunu Field was carried out in phases. During 2010, development activities

were conducted at Tunu Project Phase 11, Tunu Project Phase 12 and Tunu Project Phase 13A.

TUNU PHASE 11

The development of Tunu Phase 11 is the construction of compression facilities, manifolds

and utilities so that the level of natural gas production from the Tunu South and Tunu North

wells can still be maintained. This project was carried out due to natural decline in wellhead

pressure from 30 barg to 10 barg (Low Pressure). Through the construction of this facility,

natural gas production could be increased back amounting to 200-250 MMSCFD. The

entire project was successfully be completed in late June 2010 with a total investment of

approximately US$554 million.

TUNU PHASE 12

Tunu Phase 12 Facility is a Gathering Testing Satellite (GTS) & Wellhead Platform (WHP)

facilities to accommodate additional wells in an effort to increase production of 405 MMSCFD.

The project was completed in late April 2010 with a total investment of approximately US$108

million, thus several wells had also been successfully produced. Meanwhile, well drillings

have been done in phases, in accordance with the design that has been created.

TUNU PHASE 13A

The development of Tunu Phase 13A is a project for the development of Gathering Testing

Satellite (GTS) & Wellhead Platform (WHP) facilities to accommodate additional wells in an

effort to increase production to 270 MMSCFD.

The entire project was completed in early June 2010 with an estimated total investment

of US$103 million. The gas production generated from several wells is flowed through the

existing trunkline pipes. To date, well drilling activities have been carried out in stages in the

existing designated WHPs.

TUNU FIELD DEVELOPMENTE



Peciko Field is located 25 km southeast of Senipah, East Kalimantan, operated by Total E&P

Indonesie (TEPI) based on the Mahakam Production Sharing Contract (TEPI: 50% and INPEX:

50%). The entire production in Peciko Field is distributed to Onshore Processing Central

Senipah to be further processed (after segregation and treatment are done) in order to meet

the specifications required for natural gas, petroleum/condensate and waste water.

The Peciko Field development project, which was implemented in 2010, consisted of Peciko

Phase 6 LP Compression Project and Peciko Phase 7A Project.

PECIKO PHASE 6 LP COMPRESSION

Peciko Phase 6 LP Compression Facility Project is a compression facility development in

anticipation of a natural decline from 30 barg to 12 barg (Low Pressure) in wellhead pressure

in Peciko Field, so it is expected that gas production from the field can be maintained at 333

MMSCFD in 2015.

The entire project was completed in early May 2010 with an investment of approximately

US$178 million. With this project, wells in Peciko Field that are already in a state of low

pressure can now be compressed in LP Compression train.

PECIKO PHASE 7A

Peciko Phase 7A Project is an additional extension platform conducted in several existing

platforms in Peciko Field to accommodate additional wells in an effort to increase production

to 85 MMSCFD in 2010 and 156 MMSCFD in 2011.

Total investment of Peciko Phase 7A Project amounted to US$46.56 thousand. It is expected

that the project is due for completion in November 2011. In December 2010 the project has

achieved 86.78%.

PECIKO FIELD DEVELOPMENT F

South Mahakam Field is located 58 km southwest of Peciko Field or 100 km from Senipah,

East Kalimantan. South Mahakam Field is operated by Total E&P Indonesie (TEPI) based on

the Mahakam Production Sharing Contract (TEPI: 50% and INPEX: 50%) that is received by

the entire production of South Mahakam Field which is then flowed to Onshore Processing

Central in Senipah, for separation and treatment processes, before natural gas is delivered

to Bontang. The South Mahakam Field development project was implemented to support the

development of South Mahakam Field Phase 1 & 2 in order to be able to produce 128 MMSCFD

of natural gas and 5,900 BOPD of condensate by 2012.

Total investment for the production facilities’ construction of South Mahakam Phase 1 and

Phase 2 amounted to US$382.59 thousand. At the end of 2010, the project has reached

16.26% progress and it is estimated that the project can be completed in the first

quarter of 2012.

SOUTH MAHAKAM FIELD DEVELOPMENT G

Image L10.

Peciko Phase 7A Extension

Platform

DEEPENING UNDERWATER GAS PIPELINE (PGBA) 16” PROJECT KODECO ENERGY

H

Kodeco Energy’s 16” gas pipeline distributes natural gas from Poleng Processing Platform

(PPP) to the Onshore Receiving Facility (ORF). This gas pipeline was built to support the

Gas Expansion Project Phase 2 by Kodeco Energy, which started operation in June 2009.

The PGBA lays across the West Surabaya Shipping Lane (APBS) in 2 (two) points, namely

kilometer point (KP) KP 35-36 and KP 44-46 with depth of 16 meters Low Water Spring (LWS).

In anticipating any disruption occured along the shipping lanes, Kodeco buried those pipes

reaching -19 meters LWS. The burial began on 19 October 2010 and is due for completion on 17

February 2011. The target completion of this project is worth US$17 million, which may likely

be delayed due to extreme weather conditions.

DONGGI SENORO PROJECT DEVELOPMENT

Senoro Field and Matindok Area operated by PSC Contractor JOB Pertamina-Medco (Tomori)

were initially discovered in 1988. These fields are targeted to begin production by 2014, with

an average production capacity at approximately 415 MMSCFD.

Natural gas supply is allocated to meet the needs of PLN (approximately 25 MMSCFD), PT

Panca Amara Utama (PAU) fertilizer plant (approximately 55 MMSCFD) and to be processed

into LNG at Donggi Senoro LNG refinery (approximately 335 MMSCFD).

At the end of 2010, BPMIGAS has signed Seller Apointment Agreement (SAA) concerning gas

allocation concept and the DMO, along with the approval of the GSA signing.

NATIONAL CAPACITY EMPOWERMENT & K3LL

DOMESTIC COMPONENT USAGE INCREASED BY 14%

JOINT PROCUREMENT SAVINGS INCREAS BY 111%

OPTIMILIZATION OF ASSETS UTILIZATION INCREASED BY 27%

TRANSACTION THROUGH STATE OWNED BANK INCREASED BY 18%

ASR FUND SAVINGS INCREASED BY 27%

3


National Capacity Empowerment & K3LL

01UTILIZATION OF DOMESTIC GOODS AND SERVICES

The utilization of domestic goods and services in the upstream oil and gas activities

significantly increased in 2010 compared to 2009 both by volume as well as percentage.

The improvement was the result of BPMIGAS’ efforts in improving the PSC contractors’

commitment to maximize the use of domestic goods and services.

As an illustration, the value of domestic goods and services procurement in 2010 was

US$6.84 billion or 63.43% of the total procurement value of US$10.79 billion. PSC Contractors’

actual domestic expenditure, 71.9% of which was dominated by procurement expenditure. It

is indicated that the national supporting of upstream oil and gas service company posseses

great opportunity to develop its capability and competitiveness.

In order to encourage the use of domestic goods and services component, BPMIGAS regulates

the procurement of goods and services that can only be conducted by national companies

or foreign companies that have collaborated with domestic suppliers of goods and services.

The regulation has proven to be effective in protecting national interests, despite the fact

that BPMIGAS provides ample authorizations to PSC Contractors in terms of procurement

agreement from US$2 million to US$5 million.

PROCUREMENT OF GOODS / SERVICES - SAVING EFFORTS

Since mid-2008, BPMIGAS has continually improved its cost-efficient upstream oil and gas

operation through a well coordinated collaboration between the procurement function among

PSC Contractors. Such colaboration was initiated by the Supply Chain Management (SCM)

Forum. The procurement cooperation manifested through joint procurement contract such

as rig leasing, transportation infrastructures (land, sea and air), joint procurement of spare

parts of heavy equipment and machines with similar brands, joint use of shorebase facilities

and other operational support facilities as well as utilization of excess goods required by

PSC Contractors. The procurement cooperation is likely to have been carried out particularly

for PSC Contractors who have adjacent working area with similar operational characteristic.

As a result, BPMIGAS managed to save US$70.19 million through joint procurement in 2010 or

increased by 111% compared to the saving outlined in 2009 amounted at US$33.20 million.

The improvement was subsequently the outcome of more active participation from PSC

Contractors in the SCM Forum. Moreover, the savings made through joint procurement can

also be acquired from material transfer valued at US$34.80 million which rose 27% compared

to 2009 of US$27.50 million. The savings made by material transfer have indicated how

effective assets management as a result of excess materials, idle assets and used materials

utilized by the PSC Contractors through material transfer method.

PROCUREMENT COST SAVING AND ASSET OPTIMIZATION 2010

COLLABORATIVE PROCUREMENT SAVING JOB ASSET OPTIMIZATION

Target Realization Target Realization

2009 2009

40% 39%

2010 2010

80

70

60

50

40

30

20

10

0

40

35

30

25

20

15

10

0

} }

NILAI PENGADAAN DAN TKDN

Service Product

2006

43%

2007

54%

2008

43%

2009

49%

2010

63%

12,000

10,000

8,000

6,000

4,000

2,000

0

%TKDN

100%90%80%70%60%50%40%30%20%10%0%

Juta

Us$

US

$ Ju

ta

US

$ Ju

ta

Around 63% of

the upstream oil

and gas products’

and services’

procurement value

was generated

domestically. Effective saving

efforts in managing

the upstream oil and

gas materials have

resulted in cost-

effecient operations

valued at US$104.99

million



02 03ASSET MANAGEMENT UTILIZATION OF NATIONAL BANKING IN 2009

2009

At the end of 2010, the total assets used to support the upstream oil and gas operational

activities was US$6.09 billion of the total acquisition of US$31.23 billion. The value of this

acquisition was multiplied by 4.4% compared to the acqusition value at the end of 2009 of

US$27.01 billion.

During the five (5) years period, the upstream oil and gas assets have raised national assets

at the average of 9% per-year.

In order to protect assets from non-operational and operational risks, all assets are insured.

The process of insurance coverage is done through national insurance company underwriter,

which automatically become members of the consortium of the major underwriter. Such

approach is to empower domestic insurance company as well as to enhance retention

covers by national insurance company.

In 2010, cost of premium coverage paid for the upstream oil & gas was US$29.78 million or

decreased by 21% compared to premium coverage that had been paid in 2009 for the amount

of US$37.95 million.

Cost of premium reduction in 2010 was an achievement for BPMIGAS as it had been

supporting insurance closure for the last three years since 2009. Consequently, the amount

of premium paid by the Indonesian upstream oil and gas industry was not influenced by the

tendency of the world’s increased insurance coverage occurred in 2010 due to major work

incidents in the petroleum activities (particularly the recent oil spill incident in BP operational

area at the Mexican Gulf) as well as some of the natural disasters within that year.

TRANSACTION FOR GOODS AND SERVICES PROCUREMENT

Since 2009, BPMIGAS started to compel PSC Contractors to utilize national banks service to

support their procurement of goods and services. This policy was applied with the intention

to provide upstream oil and gas industry a maximum benefit for the country, among others

the raising circulation of money in national banks and enhancing national banks’ ability to

support financing upstream oil and gas business.

Since the enactment of the policy, transaction value through national banking system

began to expand. In 2009, procurement transaction through national banks was amounted

to US$3.93 billion (or around Rp35.4 trillion). In 2010, the transaction multiplied to US$4.63

billion (or Rp41 trillion) or increased by 18%. Thoroughly, since 2009, national banks have been

coping with procurement transaction of upstream oil and gas for the amount of US$8.56

billion or Rp77 trillion.

UTILIZATION OF NATIONAL BANK SERVICE IN PSC CONTRACTOR PROCUREMENT

OIL AND GAS INDUSTRY ASSET VALUE

35

30

25

20

15

10

5

-

Yield Value

Accumulated Depreciation

Book Value

2006 2007 2008 2009 2010

Mandiri US$2.63 miliar

BNI US$419.69 juta

BRI US$63.35 juta

Syariah Mandiri US$291.30 juta

Mandiri / BNI US$522.35 juta67%

11%

2%

7%

13%

79%

2010

Mandiri US$3.65 miliar

BNI US$737.91 juta

BRI US$166.27 juta

Syariah Mandiri US$68.76 juta

16%

4%

79%

1%

Mili

ar U

S$ National banking

sector was

strengthened to

support the oil and

gas activity.



PLACEMENT OF ABANDONMENT AND SITE RESTORATION FUNDS

Abandonment and Site Restoration (ASR) Funds are the amount of funds that PSC Contractors

should reserve in order to permanently suspend the operational of production facilities as

well as the other supporting facilities and eliminate its ability to be reactivated as well as to

perform environmental restoration in the upstream oil and gas operational area.

In 2009 BPMIGAS directed ASR fundraising through a joint account between BPMIGAS and

the PSC Contractors in the national banking system. Of this policy, the amount of ASR Funds

that were stored in the national banks had increased. In 2009, the ASR fund reached US$132

million and rose 27% to US$167 million in 2010.

Efforts to involve national banks in the activities of upstream oil and gas industry both to save

the ASR funds or procurement transaction of goods and services were aimed to improve the

quality of national banking liquidity to be able to play an active role in credit distribution, both

in credit investment and working capital particularly for the oil and gas industry as well as

the entire real sector.

Opportunity to obtain credit loans from the banks in the oil & gas sector is still widely open.

Based on Bank Indonesia record, from 2003 – 2009, loans that were given by the national

banks to the mining sector (including upstream oil and gas sector) was only 3.8% for credit

investment and 2% for working capital loans (Bank Indonesia, 2009).

TENAGA KERJA

Number of Indonesian workers (TKI) and foreign workers (TKA) in the upstream oil and gas

industry greatly depends on the number and type of activities performed during the year.

Accumulatively, number of workers in the PSC Exploration and Production Contractors

shrinked by 1.6% in 2010.

The numbers of PSC Exploration Contractors were down by 29.4% compared to 2009. As for

the details, number of Indonesian workers had dropped from 2,233 workers to 1,601 workers,

whilst foreign workers had dropped from 252 workers to 152 workers.

Meanwhile, for PSC Production Contractor, the number of employment rose to 1.5% compared

to 2009. As for the details, numbers of Indonesian workers increased from 21,520 workers to

21,727 workers, whilst foreign workers also rose from 649 workers to 776 workers.

The increase in employment numbers at PSC Production Contractors has been identified

since 2009, following the improvement in three major upstream oil and gas projects activities,

namely Cepu Block development by Mobil Cepu Ltd, Indonesia Deepwater Development (IDD)

by Chevron Indonesia Company (Cico) and Masela by Inpex.

Based on the approval of Work Program and Budget (WP&B) for year 2011, which was issued

at the end of 2010, total employment of exploration will be increased along with the signing

of new working area’s contracts.

04HUMAN RESOURCE MANAGEMENT

ASR FUND PROGRESS IN THE NATIONAL BANKING SECTOR

Bank Mandiri Bank BRI Bank BNI

Note:

1. All the years 2006 to 2010 data were based on 2010 CDM report.

2. Year 2011 data was based on the total number of recommended TKA & TKI stated

in 2011 WP&B.

REALIZATION OF TKA & TKI IN 2010 - PRODUCTION JOB

2006 2007 2008 20102009 2011

30.000

25.000

20.000

15.000

10.000

5.000

0

REALIZATION OF TKA & TKI IN 2010 - EXPLORATION JOB

2006 2007 2008 20102009 2011

2500

2000

1500

1000

500

0

200934%

16%

50% 201034%

34%

32%

Ora

ng

Ora

ng



CAREER DEVELOPMENT

In order to monitor Indonesian workers’ career development in the PSC contractors

management and to ensure transfer of technology in the upstream oil and gas business

activities, BPMIGAS designed Career Development Monitoring program (CDM). Through

the CDM program, BPMIGAS appraises contractor’s performance on personal expenses,

manpower planning, career development, training development, opportunities for

international assignments for workers (for instance through swapping program, overseas

job assignment, technical development exchange, internationalization), succession plan

and so forth.

In 2010, the monitoring results indicated that 3 (three) major PSC Contractors with the best

program include Medco E&P Indonesia (MEPI), PT Chevron Pacific Indonesia (CPI) and PT

Pertamina EP. While the other 3 (three) minor PSC contractors with the best program was BP

Indonesia, Santos and Pearl Energy.

In overall, the program development implementation for Indonesian workers plunged in 2010.

The main factors were due to the policy of post-crisis contraction budgets from the PSC

Contractors’ headquarter.Another effort is by swapping foreign workers employed at the PSC contractors with

declining production rate with Indonesian workers in the attempt to maximize the use of local

resources as to limit the numbers of foreign workers posted at PSC Contractor exploration.

BPMIGAS also encourages the management of PSC Contractors to develop Indonesian

workers’ career, hence they will be able to replace the various positions that were previously

taken by foreign workers, such as leadership position, surface operations, subsurface,

drilling, wells and completion as well as in engineering & projects discipline.

In order to confirm Indonesian Human Resource development work as planned, BPMIGAS

will evaluate the effectiveness of the use of foreign workers in the beginning of 2011 while

ensuring that foreign workers are employed in major upstream oil and gas projects and were

given KPI targets to support project acceleration.

DEVELOPMENT OF INDUSTRIAL RELATIONS

In order to foster industrial relations management, BPMIGAS, made an attempt to expedite

the approval of the Company Regulations (PP) and the Collective Labor Agreement (CLA)

proposed by the PSC Contractors in 2010 by observing the latest developments.

Furthermore, BPMIGAS also reevaluated the salaries and benefits of all employees in the

upstream oil and gas industry and ensured compliance to current procedures and standards.

Dispute cases concerning industrial relations were hardly occurred. Most cases were

generally associated with third-party workers’ request to be assigned as permanent workers.

However, all cases have been resolved through negotiation process.

BPMIGAS evaluation have indicated results that all PSC Contractors confronted by third-party

demand have yet to possess a clear job description that divided the workers’ core business

functions with the non-core business functions. Therefore, in order to improve industrial

relations in the upstream oil and gas industry, BPMIGAS required PSC Contractors to have

clear job descriptions with monitored performance through HR audits and CDM.

REALIZATION OF TKI DEVELOPMENT PROGRAM IN 2010

2008 20102009

250

200

150

100

50

0

Internationalization

Swapping

Job Assignment

TDE

Ora

ng


05


50

ENVIRONMENTAL-ORIENTED DEVELOPMENT

Furthermore, by carrying out the provisions as stipulated by the laws and regulations,

the PSC Contractors are required to conduct Environmental Baseline Assessment (EBA).

Liabilities drafted in the PSC should be performed by the PSC Contractors in the beginning of

their site activities. The objective is to identify preliminary environmental data, thus it would

be a base for site development as well as to provide preliminary mitigation strategy should

contamination takes place. In 2010, out of 32 EBA studies submitted by the PSC Contractors,

17 of them had been deemed to meet EBA criteria.

The PSC Contractors that are still in the exploration stage must compile a study on

Environmental Management Efforts (UKL) and Environmental Monitoring Efforts (UPL). The

implementation refers to the Minister of Environment Regulation No. 13 Year 2010. In 2010,

there were 114 studies of UKL/UPL for PSC Contractors’ activities which were evaluated by

BPMIGAS to be submitted and approved by the Ministry of the Environment or the related

Environmental Agency at the provincial or regency level, of which 50% of them have been

approved by relevant agencies.

OIL SPILL PREVENTION

During year 2010, there were no major oil spill incident (above 15 barrels), both onshore and

offshore. This was such an achievement, considering that in recent years such disasters

often occured in the upstream oil and gas industry. This achievement was the outcome

of BPMIGAS’ and PSC Contractors’ effort in working with other agencies through several

handling exercise and preventive campaign titled “Journey to Zero Incident”.

As for preventive measures, BPMIGAS and PSC contractors renewed their Standard Operating

Procedure (SOP) on oil spill prevention. This is a combination of onshore oil spill handling

procedure and offshore oil spill handling procedure.

STUDY PRACTICETo minimize the impact of upstream oil and gas activities to the environment, Government

Regulations require PSC Contractor to conduct some preliminary assessment before starting

the activities. One of the requirements is to set up Environmental Impact Assessment (AMDAL)

analysis. AMDAL is an asseseement of the activities impact towards the environment.

AMDAL is constructed during site development by examining aspects of physical-chemical,

ecological, socio-economic, socio-cultural and public health. Basic implementation refers to

Government Regulation No.27 of year 1999 concerning Environmental Impact Analysis.

In 2010, 8 (eight) PSC Contractors submitted the AMDAL documents (which consisted of KA-

ANDAL, ANDAL-RKL-RPL) as well as the Revised AMDAL document (RKL-RPL Addendum). Until

end of year 2010, 7 (seven) of them were approved by the Ministry of Environment (MoE),

whereas 1 (one) document was still pending for approval.

PSC Contractors

Genting OilNatuna Pte. Ltd.

Pertamina HuluEnergi ONWJ

JOB PertaminaPetroChina EastJava

Pearl Oil (sebuku) Ltd.

KondurPetroleum S.A.

Total E&PIndonesie

Kalila (Bentu) Ltd. & Kalila (Korinci Baru) Ltd.

Chevron PacificIndonesia

In progress diKLH

Sudah disetujuiKLH

Sudah disetujuiKLH

Sudah disetujuiKLH

Sudah disetujuiKLH

Sudah disetujuiKLH

Sudah disetujuiKLH

Sudah disetujuiKLH

Document Title

AMDAL, development of oil field in Ande-Ande Lumut, Northwest Natuna Block

RKL/RPL Development of Oil & Gas Field in North West Java (ONJW) Offshore Block in North West Java Off-shore and DKI Jakarta

KA ANDAL Development of Oil & Gas Field in Tuban Block, Phase IV- West Area in Bojonegoro Regency and Tuban Regency, East Java Province

EIA development of Ruby Gas field in Sebuku Block, Makassar Strait

RKL/LPL additional development of oil field and natural gas of Kuaru and South Padang, Merbau Regency, Meranti Island Regency, Riau Province

RKL / LPL additional activities of oil and natural gas exploration in the Contract Mahakam Site, South Mahakam and Balikpapan Base, East Kalimantan Province

Development Plan of Gas Field at Kalila (Bentu) Ltd. Mining Site at Pelalawan Regency, Kampar Regency and Pekanbaru, Riau Province

Andal, RKL & RPL of oil production development and natural gas in Minas Siak Areal Minas, Kotabatak Pata-pahan and Libo, Riau Province

Status

No

1

2

Spilled Area

Onshore

Offshore

2009

10

6

2010

0

0

EIA APPROVAL PROCESS FOR 2010 PSC CONTRACTORS

OIL SPILL INCIDENT IN 2010



In the effort of encouraging HSE performance, BPMIGAS also awarded Best HSE Performance

Award to the PSC Contractors. The assessment was based on the PSC Contractor’s Work

Safety data and PROPER for 2009 period as well as MoE Assessment for year 2009.

From the evaluation results, the best HSE Performance award was rewarded to PT. Chevron

Pacific Indonesia Block Siak (for the category over 10 million of work hours), Chevron Indonesia

Co.Makassar Block (for the category between 2-10 million of work hours) and the Energy Star

(Kakap) Ltd.Kakap Block (for the category under 2 million working hours).

ENVIRONMENTAL PERFORMANCE ASSESSMENT

Every year the Ministry of Environment (MoE) announced companies’ ratings on Enviromental

Compliance Performance Program for the upstream oil and gas activities. There were major

improvements in the quality of environmental management by companies involved in the

program during the 2010 assessment. One of the indicators was no more Black rank amongst

the PSC Contractors ever since all the contractors installed-Wastewater Treatment Plant

(IPAL). The number of contractors with PROPER rank also increased from 56 participant areas

to 59 participant areas.

In order to accelerate community self-reliance development in the surrounding oil and gas

mining area, the PSC Contractors conducted community development programs. However,

over the issuance of Minister of Energy and Mineral Resources Regulation No.22 Year 2008

concerning Types of Upstream Oil and Natural Gas Business Activity with Non-Recoverable

Cost to the Production Sharing Contract Contractors, prohibiting community development

programs to be included in the operational costs. Therefore, BPMIGAS divided the

implementation of community development program into 2 (two) categories. The objective is

to distinguish the social development programs, which will be allocated as operating costs

in order to comply with existing regulations and social development activities (community

development) which will be funded by PSC Contractors headquarters’ budget.

SOCIAL SUPPORT PROGRAM The Social Support Program (PSPO) is a community development activity conducted by the

PSC Contractors to support site operations at the working production area. This activity has

been also carried out to meet the AMDAL-related regulations or other regulations that should

be complied with.

In practice, PSPO was divided into 4 (four) types of programs namely infrastructure,

compensation for activities that correlates with permits/land use and regulatory compliance.

The programs that correlate with infrastructure covering road construction/repairment,

electrical installation and information centre construction. While the programs that correlate

with compensation covering renovation/repairment of public facilities, compensation over

the effects of operations toward public health, environmental or security, land compensation,

overlapping land, project socialization and relocation project. The programs that were related

to permit covering society’s needs in the form of donations, services and development.

06COMMUNITY DEVELOPMENT PROGRAM

Tahun

Black

Red

Red

Blue

Blue

Green

Gold

Total

1

3

2

12

27

7

0

52

1

5

5

29

17

10

0

67

0

11

48

11

0

70

Tidak Taat

Taat

2008 2009 2010

Assessment

SOCIAL PROGRAM TO SUPPORT OPERATION ACTIVITY IN 2010

Regulatory compliance Rp 97,85 Billion

Compensation Rp 52,44 Billion

Infrastucture Rp 46,39 Billion

Permit Rp 12,81 Billion

47%

6%

22%

25%

PSC CONTRACTOR PARTICIPATION THROUGH PROPER



54

The following chart indicates the cost composition of PSPO and Community Development

in 2010.

In 2010, some of the PSC Contractors that only carried out CD activities without PSPO were

ConocoPhillips (Natuna, South Jambi), Kodeco Energy, CITIC Seram Energy, PremierOil (Natuna

Sea) Ltd., PearlOil (Tungkal) Ltd., PT. Medco E&P - Tarakan. In 2010, the actual realization of

PSPO and upstream oil and gas CD had reached Rp311.2 billion or 35% higher compared to

actual realization of Rp231.1 billion in 2009.

SOCIAL DEVELOPMENT ACTIVITIES

Community development activities or CD is a development approach to encourage

participation and direct involvement of local residents in the process of development. By this

approach, all joint communities would be synergized with local government’s businesses

and other stakeholders so as to improve local communities’ standard of living. Thus, local

residents’ own initiative should become the focus of the CD.

Generally, the CD can be categorized into community charities such as disaster relief,

community service such as infrastructure development, training and development local

communities’ potential.

In recent years, the CD has been developed into sustainable development, where its focus

on development was not just confined to humans but also the environment; and it also not

just confined to the development with the economic aspects but also industrial aspects.

If the activities are classified into executed activities, then the CD programs for the Upstream

Oil and Gas sector were divided into 5 (five) areas, namely the economic field (to assist the

government to empower the community in an effort to improve the economy), education

and cultural affairs (in the form of scholarships, to have a complete cultural facilities and

educational infrastructure, sports) and in health affairs (to support improvement efforts in

public health), social and public facilities (to support the development of social infrastructure,

public facilities within the operational area) and environmental affairs (to support the

environmental awareness program.)

COST COMPOSITION FOR PSPO AND COMMUNITY DEVELOPMENT IN 2010

PROGRESS OF COMMUNITY DEVELOPMENT PROGRAM IN 2010 FOR UPSTREAM O&G

7%

Economy Rp 41,91 Billion

Education Rp 30,07 Billion

Environment Rp 11,91 Billion

Social and Public Facilities Rp 11,25 Billion

Health Rp 6,65 Billion

41%12%

11%6%

30%

350

300

250

200

150

100

50

0

Budget Realization

20062005 2007 2008 2009 2010

Mili

ar R

p



56

07SAFETY OF VITAL OBJECTS

SECURITY OBSTRUCTIONS

All assets that have been utilized to support the upstream oil and gas industry operations

were integrated in the national vital assets category, as it has important role to the nation

in terms of economic, political, social, cultural, defense and security aspects. Security

obstruction toward these assets will cause losses for the country.

Since June 2010, numbers of security obstructions were significantly increased. It was even

higher compared to the last 5 (five) years. As of the identification conducted, some matters

that can potentially raised problems include :

Uncertified land wherein most lands used for supporting the upstream oil and gas

industry have not been certified and caused annexation of land, especially in the

Right of Way (ROW) pipeline; barren land and land adjacent to community activities.

Lack of stakeholders’ comprehension (especially around the area of oil and gas

industry) toward the status of assets managed by the PSC Contractors.

One of the examples of obstruction occurred at COPI working area was road access blockage

in Suban Well#4 that was due to unsettle dispute over land. Consequently, it had caused the

closing of Suban Well#4 which caused significant loss for the country.

Blockage also took place at Gunung Kembang, operated by Medco E&P, which caused

production loss of 7 MMSCFD. Security obstructions also occurred in PT Pertamina EP

Sumbagsel working area, where most of oil pilfering was done using Pertagas Tempino Plaju

pipelines.

Based on the site observation where most security obstruction occurred in South Sumatra,

particularly on-site of ConocoPhillips Indonesia Inc. (COPI) and Pertamina EP areas. Common

obstructions were crude oil pilfering and area blockage within the site.

NUMBER AND TYPE OF SECURITY OBSTRUCTION IN 2006-2010

1200

1000

800

600

400

200

0

Oil and Gas Equipment Robbery

Oil and Gas Operation Obstruction

Total Obstruction

2006 2007 2008 2009 2010

Jum

lah

Gan

gg

uan

Medco E&P (Sumbangsel)

Pertamina EP (Mayoritas Sumbangsel)

Conoco Phillips Indonesia Inc. (Sumbangsel)

Chevron Pacific Indonesia (Riau)

Vico Indonesia (Kaltim)

28%

37%16%

10%9%

TOTAL SECURITY OBSTRUCTIONS EXPERIENCED BY SOUTH SUMATRA’S PSC CONTRACTORS IN 2010



58

INTEGRATED SECURITY SYSTEM

Obstructions rate in PHE ONJW working area operating in West Java area however had shown

a significant decline. Over the years, the criminal rate, especially theft in ONWJ working area

was among the highest of more than 100 times of incidents and had caused loss of hundreds

of millions of dollars. Yet, the obstruction was managed to be kept at the minimum in 2010.

Some preventive efforts have been taken to eliminate obstructions and one of them was

to establish security based community, a new form of security approach involving local

communities, government and security apparatus in resolving or settling conflicts.

At the end of 2009, PHE ONWJ signed an agreement with West Java Regional Police Office

to secure the operational area. Moreover, cooperation was also constructed with the

surrounding communities (majority was fishermen community) to be involved in securing

the areas. The mechanism was conducted through community development activities,

where the company provides revolving credit to purchase outboard motor boats for the

communities with the agreement to maintain assets or file a report in case of any theft.

These efforts were considered effective as the fisherman’s report have in fact caused some

robberies to be stopped and theft rate were cut down.

The company had also communicated the upstream oil and gas activities to local apparatus

and local parliament in order to increase awareness and encourage community participation

in protecting the upstream oil and gas assets. Local government is fully aware that the ease

of performing business activities will increase Regional Government Budget through profit-

sharing mechanism.

In 2010, BPMIGAS issued regulation for PSC Contractors with the intention of reducing

detriments due to obstruction in oil & Gas working areas. The regulations concern about

optimization of collaboration with the Joint Operation Handling Units (Satlakpamber),

development of a system called PSC Contractors’ Safety Management Standard and its

related activities, enhancement of security through regulatories, safeguard, escort and

patrol (TURJAWALI) in the working areas as well as to cultivate a sense of security ownership

of all contractors and residents in the surrounding site areas in order to establish a

community-based security system.

TOTAL ROBBERY AND LOSSES IN PHE ONJW WORKING AREA

450

400

350

300

250

200

150

100

50

-

Jan

Feb

Mar

Apr

Mei

Jun

Jul

Agt

Sep

Okt

Nov

Des

20092008 2010

Lost Value

Jum

lah

Per

isti

wa

Nila

i Ker

ugia

n (x

1.0

00

US

$)

50

45

40

35

30

25

20

15

10

5

0

4

INTERNAL BPMIGAS

THE BEGINNING OF BPMIGAS BUREAUCRACY REFORM

ProfessionalResponsive

Unity in diversityDecisive

EthicsNation Focused

Trustworthy


Internal BPMIGAS

In 2010, BPMIGAS continued its

transformation process to become a world

class government agency equipped by

competent and professional human resources

(HR) in supporting the Company’s upstream

business activities in the oil and gas sector to

generate maximum revenue for the state. To

achieve these objectives, BPMIGAS has made

various efforts to reform the bureaucracy,

including organizational restructuring,

strengthening organizational capability, training

and development to reinforcing employees’

supervision through preventive and curative

efforts (post-audit).

Reinforcing supervision has become one of the

main agenda to be addressed in order to ensure

that transformation process goes as planned.

Preventive effort in the supervision area, among

others, requires all leaders and employees of

BPMIGAS to sign a moral pledge called Integrity

Pact before performing duties and obligations

in a professional manner.

Another preventive effort is the establishment

of Government Internal Control System Task

Force (SPIP), which aims to control and support

internal performance improvement of BPMIGAS

in particular as well as PSC Contractor in general.

SPIP involves all functions at BPMIGAS and is

responsible for providing input to management

in order to improve the internal control system

within BPMIGAS.

To strengthen the auditors’ function, BPMIGAS

also applied Internal Control Unit (UPI) in charge

of auditing the economic aspect as well as

the efficiency and effectiveness process at

BPMIGAS. These efforts were made by adding

competent human resources and strengthening

the position of the organization.

Immediate Fixes

Transformation in Progress

Scale UpOperations

Establish World Class Organization

Pengapalan pertama LNG

Tangguh

Realisasi penerimaan negara

2007-2009 selalu diatas

target APBN

Menawarkan 4 KPI organisasi

BPMIGAS kepada Dep Keu

2009 Realisasi komitmen

TKDN untuk pengadaan

barang dan jasa mencapai

49%

Realisasi penggunaan

perbankan nasional tahun

2009 adalah US$ 3,93 miliar

WP&B 2010 disetujui sebelum

tahun berjalan

DI tahun 2009, 55.46% gas

bumi dimanfaatkan untuk

domestik

Jumlah KKKS sampai dengan

245

2010 Realisasi komitmen TKDN

untuk pengadaan barang dan

jasa mencapai 69%

Realisasi penggunaan

perbankan nasional 2010

sampai US$ 7,87 miliar.

WP&B 2011 disetujui sebelum

tahun berjalan

Penyelarasan dan

implementasi proses bisnis,

kewenangan, job desc,

manual, dan KPI

Implementasi program

peningkatan kapabilitas

organisasi

Peningkatan kerja sama

dan keterbukaan kepada

stakeholders

Implementasi ICT Blueprint

Penandatanganan MOU

dengan berbagai lembaga

pemerintahan

Memulai internalisasi core

values

Perbaikan yang

berkesinambungan untuk

proses bisnis (continous

improvement)

Peluncuran program untuk

memaksimalkan pasoka

domestik barang dan jasa

oleh industri penunjang migas

dalam negeri

Peningkatan program-

program ICT (eg. data real-

time dari KKKS)

Peningkatan kapabilitas

organisasi dan industri dalam

mengantisipasi keperluan skill

tertentu (eg. Deepwater, CDM)

Sinergi antara CSR dan Bright

& Green di lokasi fasilitas

produksi

Mengintegrasikan seluruh

fungsi transaksional SDM,

HR, PMA, TI di bawah

naungan BPMIGAS- Indonesia

Incorported

Peningkatan sektor riil yang

didorong adanya finansial dari

pendapatan migas yang dapat

digunakan untuk permodalan

di bidang migas

Melembagakan inovasi

dan perbaikan lebih lanjut

(continous improvement)

Melakukan pertukaran

“business opportunities”,

bukan hanya jual beli

komoditas, akan tetapi

memanfaatkan adanya

kesempatan bisnis ke dalam

negeri

Dengan diperoleh devisa

dari penjualan SDA migas,

dan tumbuhnya industri

penunjang di dalam negeri

sehingga akan menjadi

penggerak kemajuan ekonomi

bangsa, sehingga BPMIGAS

menjadi lokomotif.

Peluncuran Misi, Visi, dan Core

Values baru

Reorganisasi BPMIGAS

(pembentukan CPMR, PPA,

PBO, Perwakilan)

Peluncuran program bekerja

berdasarkan KPI (KPI based)

Peluncuran inisiatif

peningkatan TKDN

Peluncuran program

penggunaan bank umum

nasional untuk menangani

transaksi finansial industri

hulu migas

PERJALANAN BPMIGAS MENUJU VISI ORGANISASI

2009 2010 2011 2015 2017

Per

form

ance


01EMPOWERING BPMIGAS ORGANIZATIONAL CAPABILITY

Internal BPMIGAS

The organizational capabilities empowerment is one of the efforts made to improve the

competence of BPMIGAS organization in monitoring and controlling the upstream oil and

gas business activities to meet the organization’s objective and goals. Several efforts were

undertaken throughout 2010 such as restructuring of organization to be more effective

in monitoring and controlling, improving the organizational good governance practices,

enhancement of human resources quality, strengthening accountability as well as

improvement of public services.

In effort of improving good corporate governance, BPMIGAS has revamped the business

process, elucidated each functions’ duties and authorities (job descriptions), improved

the Management Authority System Guidelines (PSKM), refined the process of setting and

supervising staffs and oversee the divisions’ Key Performance Indicator (KPI), improved

management administration, as well as synchronized the Standard Working Procedures

(PTK) to be fully integrated with one another in accordance with the applicable laws and

regulations.

In order to ensure reformation process to run as planned, BPMIGAS carried out a preliminary

survey as regards the organization performance before planning out the working program.

A survey conducted in early 2010 revealed how BPMIGAS staffs have lack of consideration

toward the PSC Contractors, which resulted in delays in responding to PSC Contractors’

complaints.

To follow up the survey result, BPMIGAS has made various efforts to improve performance,

among others were disseminating the organization values to every employee, namely

Professional, Responsive, Unity in Diversity, Decisive, Ethics, Nation Focused and Trustworthy

(P.R.U.D.E.N.T). The objective is to encourage all BPMIGAS’ employees to apply the new core

values in their behavior and working activities toward the achievement of pursue the

organization’s final objectives and goals.

To keeping up the employees’ spirit in line with proper implementation of the new values,

the management has awarded 35 BPMIGAS’ employees from various functions that have

demonstrated PRUDENT core values. The award was presented at the closing ceremony of

2010 BPMIGAS Working Meeting held in December 2010.

The completion of business processes, job description and SOP in 2010 has produced

877 business processes and 82 job description functions. In addition to that, there

were 28 approved SOPs, while the other 10 are still in the pre-development phase. That

accomplishment was due to the full support and active participation of all divisions at all

levels shown during the discussion and preparation phases.

In 2010, BPMIGAS had also started to monitor implementation of KPIs that have been

implemented since September 2009. The performance measurement resulting from the

monitoring activities were quantified in numbers of achievement divided by number of

working days. The monitoring results were then reported directly to management on a

monthly basis.

In order to comply with the principles of effective and efficient good corporate governance,

BPMIGAS also set a standard of administrative management, both in the process of sorting

and ordering records, storage, maintenance and destruction of administration records.

Every employee and secretary must attend the Public Administration Management (PAU).

In 2010, the socialization of new PAU recorded 36% of total employees. The process will

continue in the following years targeting all employees.

Organization

redeployment as part

of bureaucratic reform

KPI target for all

employees and

leaders


Internal BPMIGAS

66

02HUMAN RESOURCE MANAGEMENT

To meet the strategic environment dynamics of the upstream oil and gas business, in 2010,

BPMIGAS prepared an HR road map management program. Based on the roadmap, human

resources development program will be implemented in 2011 and is expected to achieve

targets in 2015.

ROADMAP PROGRAM PENGELOLAAN SDM BPMIGAS

ORGANIZATION EXPANSION

The first step to achieve World Class Human Resource (HR) as one of the key requirements

to be a professional government agency division of the organization is to expand the

organization to support all employees in meeting the Company’s objectives and goals as

applied. The Company’s decision to add more employees is adjusted with the organizational

structure, which is designed on the base of the recently reformed business processes. The

most apparent functional change was the adding of new Evaluation and Legal Consideration

(EPH) sector. The Deputy of EPH Division will oversee the Legal Consideration Division, Division

of Evaluation, Reporting and Information Technology as well as the VP of Representative

Management who are being assigned in the working areas of the PCS contractors.

Changes in the organization also focus on strengthening the key areas, namely Planning,

Operational and Financial Control and to ensure full cooperation from the supporting fields

of General sector as well as Evaluation and Legal Consideration sector in order to operate

effectively.

In the process of organizational expansion, BPMIGAS also hires professional and experienced

oil and gas personnel. The objective is to fill the labor gap in level 6 (six) employees, whose

numbers are still insufficient. The needs to supply experienced and skilful personnel are

required to prepare the organization within the next 5 (five) years to replace officials who

are in their retirement stage.

CAREER DEVELOPMENT PROGRAM

To meet the needs of Head of Sub-division level officials, BPMIGAS accelerated career

development program for some of its employees from level 5 (five) and 6 (six) to be promoted

as Head of Sub Division level. Employees who have been promoted hold a proven record of

good performance with the required competencies, demonstrate maturity, managerial and

leadership attitude.

Horizon 1 :“Build the Foundation”

Horizon 2 :“Capability Alignment”

Horizon 3 :“World Class HR”

Tujuan

Fokus area pengembangan

akan dilakukan terhadap

area pengelolaan SDM yang

paling critical terhadap

bisnis dan memiliki gap

terbesar antara As-Is dan

To-Be

Initiatives

Manajemen Kompetisi

Pengelolaan Kinerja

Pengembangan Karir

Pembelajaran

Rewards

Succession Planning

Human Capital Infrastructure

Organization & Workplace

Design

Manajemen Perubahan

Initiatives

Implementasi 1 tahun siklus

performance

Knowledge Management

Employee Relations

Initiatives

Periode stabilisasi untuk


telah diimplementasikan

Human Capital Strategy

Workforce Planning

Rekrutmen

Tujuan

“Capability Alignment”

akan dilakukan dengan

implementasi terhadap

rancangan yang sudah

dibangun di tahun pertama,

termasuk roll-out ke seluruh

organisasi

Tujuan

Meningkatkan kapabilitas

organisasi untuk menjadi

“World Class HR”

Periode stabilisasi untuk


telah diimplementasikan

2011 2012 2013-2015

<30 th 31-35 th 36-40 th 41-45 th 46-50 th 51-54 th >54 th

WORKERS DEMOGRAPHY BASED ON LEVEL AND AGE

UC 0509 0408 0307 0206 01

20018016014012010080604020

0

2011 2012 2013 2014 2015

MPP WORKERS ANALYSIS BY LEVEL FOR THE PERIOD OF 2011 - 2015

UC05 0904 0803 0702 0601

20181614121086420

Jum

lah

Pek

erja

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P


Internal BPMIGAS

For a comprehensive organization overhaul, BPMIGAS ran a full range of its existing human resource

management system evaluation throughout 2010. The evaluation results were used as the base for the

improvement of BPMIGAS Human Resource Management SOP, especially with regard to competency

management, performance, career development to serve as a learning point for employees to avoid

large competency gap in the organization as occurred in the previous years.

Until the end of 2010, BPMIGAS Human Resource Management SOP improvement process

had reached the existing HR management assessment and has been developed accordingly

to the desirable conditions and the working plans in order to meet the expected Human

Resource management system. The SOP improvement is due for completion by mid-2011.

In supporting the transformation process, several activities have been conducted toward

the set target. One of them was to enhance employees’ competency. During 2010, BPMIGAS

has compiled with several compulsory training programs for their employees. Employees at

the staff level received more trainings than the top-level officials. Head of divisions received

the least trainings compared to lower-level officials.

Compulsory trainings must be attended by all employees at all level and divisions. Some

of the compulsory trainings include negotiation skills, managerial skills and some others.

Special trainings will be given upon employee’s request after further selection process, by

which the approval is based on the job description function.

The total amount of BPMIGAS budget in 2010 was Rp901.17 billion and US$10.06 million or

totaling at Rp901.17 (using Rp9,300 exchange rate). The total budget was approved based

on the Minister of Finance Decree No.S-200/MK.02/2010 dated 6 May 2010. On top of that,

through the Decree No.S-578/MK.02/2010 dated 23 November 2010, the Finance Minister had

also approved an additional budget which amounted to Rp48.09 billion for office relocation

costs. The office relocation was an urgent need required to improve services in the upstream

oil and gas industry as well as to respond to the growing organizational challenges.

Budget realization for 2010 amounted to Rp880.45 billion or 92.47% of the total approved

budget. Absorption of the 2010 budget was surpassed the previous year’s budget of 86.73%

or equivalent to Rp665.10 billion. That was due to the properly constructive plan and the

more focused working program that have been carried out in 2010.

03REALIZATION OF OIL AND GAS BUDGETS AND EXPENDITURES

RAPB-RK Budget Realization

500

450

400

350

300

250

200

150

100

50t

-2

99,68%

1

99.17%%Realization

Juta

Rp

3

84,70%

4

84,48%

5

85,74%

6

54,74%

7

100%

8

82,64%

9

97,98%

BPMIGAS FACILITIES AND INFRASTRUCTURE

The emergent expansion of PSC Contractor to the current 245 units added to the growth of

BPMIGAS operational needs in supporting the execution, monitoring and control of oil and

gas upstream activities.

To support the achievement of BPMIGAS performance toward lifting, cost recovery control

and state revenue targets, the Company needs adequate infrastructures, especially an

office building that can accommodate the existing number of employees.

In addition to that, as part of the institution’s responsibility for managing strategic minerals

that are included in the national vital object, the need to maintain the data confidentiality

has become increasingly important. For that, after about 9 (nine) years of occupying the old

office building at Patra Jasa on Jl. Gatot Subroto Kav.32-34, BPMIGAS officially moved to a

new building located in Wisma Mulia on Jl Gatot Subroto No.42, South Jakarta.

This new office is providing more comfort and safety to the work place, so for that reason,

it is expected that the new atmosphere can boost BPMIGAS employees’ performance in

managing PSC Contractors.

Notes:

1. Costs of Workers & Professionalism Enhancement

2. Office Set-up & Rental

3. On-the-job Facilities

4. Operational Management

5. Business Assessment and Development

6. Development of Management Information System

7. Overseas’ Trip Allowance

8. Other Activities

9. Office Relocation Costs

Employees

Competency

Development

Activities toward

Organizational

Improvement


LIST OF INDONESIA’S

UPSTREAM O&G WORKING AREAS

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

PRODUCTION WORKING AREAS AND DEVELOPMENT OPERATOR

WORKING AREAS INDONESIA PETROLEUM LTD.

PETROCHINA INTERNATIONAL BANGKO LTD.

PT. MEDCO E&P RIMAU

CAMAR RESOURCES CANADA INC.

EXXONMOBIL OIL IND. INC.

LAPINDO BRANTAS INC.

KALREZ PETROLEUM (SERAM) LIMITED

PT CHEVRON PACIFIC INDONESIA

CONOCOPHILIPS (GRISSIK) LTD.

BOB PERTAMINA – BUMI SIAK PUSAKO

CHEVRON INDONESIA COMPANY

PT. PERTAMINA HULU ENERGI GEBANG & SUMATRA (COSTA)

PETROCHINA INTERNATIONAL JABUNG LTD.

CONOCOPHILLIPS (SOUTH JAMBI) LTD.

STAR ENERGY (KAKAP) LTD.

PT.MEDCO E&P INDONESIA

PETROCHINA INTERNATIONAL (BERMUDA) LTD.

KALILA (KORINCI BARU) LTD.

PT.MEDCO E&P INDONESIA

TOTALFINAELF E&P INDONESIE

CHEVRON MAKASSAR LTD.

KONDUR PETROLEUM S.A

PREMIER OIL NATUNA SEA B.V.

CONOCOPHILIPS INDONESIA INC. LTD.

PT. MEDCO E&P MALAKA

MOBIL EXPLORATION IND.

JOB PERTAMINA-TALISMAN (OGAN KOMERING)

PERTAMINA HULU ENERGI ONWJ LTD

HESS (INDONESIA-PANGKAH) LTD.

TRIANGLE PASE INC.

JOB PERTAMINA-GOLDEN SPIKE INDONESIA, LTD.

PT PERTAMINA EP

PT. CHEVRON PACIFIC INDONESIA

CNOOC SES LTD.

JOB PERTAMINA-PETROCHINA SALAWATI

SANTOS (SAMPANG) PTY LTD.

PETROSELAT, LTD.

ATTAKA

BANGKO

RIMAU

BAWEAN

N. SUMATRA, CONTRACT AREA B

BRANTAS

BULA

SIAK

CORRIDOR

C P P

EAST KALIMANTAN

GEBANG

JABUNG

SOUTH JAMBI B

KAKAP

CENTRAL SUMATRA (KAMPAR)

KEPALA BURUNG

KORINCI BARU

LEMATANG

MAHAKAM

MAKASSAR S. OFF. AREA A

MALACCA STRAIT

NATUAN SEA BLOCK A

SOUTH NATUNA SEA “B”

AREA A, N. SUMATRA

NSO/NSO Ext.

OGAN KOMERING

OFF. NORTH WEST JAVA

PANGKAH

PASE

PENDOPO-RAJA

INDONESIA

ROKAN

SOUTH EAST SUMATRA

SALAWATI

SAMPANG

SELAT PANJANG

ENERGY EQUITY EPIC (SENGKANG) PTY. LTD.

CITIC SERAM ENERGY LIMITED

JOB PERTAMINA - MEDCO TOMORI SULAWESI

PT. MEDCO E&P INDONESIA

TOTAL E&P INDONESIE

JOB PERTAMINA-PETROCHINA EAST JAVA

PEARL OIL (TUNGKAL) LTD.

PERUSDA “BENUO TAKA”

KODECO ENERGY COY.

JOB PERTAMINA-HESS JAMBI MERANG

SANTOS (MADURA OFFSHORE) PTY. LTD.

KANGEAN ENERGY INDONESIA LIMITED

VICO

MOBIL CEPU LTD

PT SARANA PEMBANGUNAN RIAU-KINGSWOOD CAPITAL LTD

KALILA BENTU SEGAT LTD

BP. BERAU LTD

BP MUTURI HOLDINGS BV

BP. WIRIAGAR LTD.

ELNUSA BANGKANAI ENERGY LTD.

CHEVRON GANAL LTD.

PC KETAPANG II LTD

PC MURIAH LIMITED

CHEVRON RAPAK LTD

PEARL OIL (SEBUKU) LTD.

HUSKY OIL (MADURA) LTD.

JOB PERTAMINA-MEDCO SIMENGGARIS PTY.LTD

PT. SELE RAYA MERANGIN DUA

INPEX MASELA LTD.

MANHATTAN KALIMANTAN INVESTMENT PTE. LTD.

TITAN RESOURCES (NATUNA) INDONESIA, LTD.

CONOCOPHILIPS WARIM Ltd.

CONTINENTAL- GEOPETRO (BENGARA-II) LTD.

ENI (Ex.Shell bv.,Lasmo,Eni,Chevron)

LUNDIN SAREBA BV.

NATIONS PETR.BV.(Ex.Ramu Inter.,Exspan,Rarmu)

ENI AMBALAT LTD.

MEDCO (Ex.Petroner,Exspan)

ENI KRUENG MANE, LTD

STAR ENERGY (BANYUMAS) LTD.

PACIFIC OIL & GAS KISARAN

ANADARKO PAPALANG, LTD.

ANADARKO POPODI LTD

ENI MUARA BAKAU BV

PEARL OIL (Ex.Sebana)

PT MEDCO E&P MERANGIN

SOUTH MADURA EXPLORATION COMPANY LTD.

MITRA ENERGY (BILITON) LIMITED

SALAMANDER ENERGY (BONTANG) PTE. LTD

TATELY NV.

PEARL ENERGY PTY LTD.

SANYEN OIL

SENGKANG

SERAM NON BULA

SENORO TOILI

TARAKAN

TENGAH

TUBAN

TUNGKAL

WAILAWI

WEST MADURA

JAMBI MERANG

MADURA OFFSHORE

ONS. & OFF. KANGEAN

SANGA-SANGA

CEPU

LANGGAK

BENTU SEGAT

BERAU

MUTURI

WIRIAGAR

BANGKANAI

GANAL

KETAPANG

MURIAH

RAPAK

SEBUKU

ONS.& OFF. MADURA STRAIT AREA

SIMENGGARIS

MERANGIN II

MASELA

TARAKAN OFFSHORE

NORTH EAST NATUNA

WARIM

BENGARA II

BUKAT

SAREBA

ROMBEBAI

AMBALAT

BENGARA I

KRUENG MANE

BANYUMAS

KISARAN

PAPALANG

POPODI

MUARA BAKAU

BULU

MERANGIN I

SOUTH MADURA

BILITON

BONTANG

PALMERAH

WEST SALAWATI

ANAMBAS

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

O&G EXPLORATION WORKS: 145 WORKING AREAS OPERATOR

WORKING AREAS

70

CAHAYA BATU RAJA

ALTAR RESOURCES, S.A.

SELE RAYA

ENI BULUNGAN, B.V.

PT. EASCO EAST SEPANJANG

IRIAN PETR. LTD. (Ex.Waropen Perkasa)

GENTING OIL NATUNA PTE. LTD.

ANADARKO INDONESIA NUNUKAN COMPANY

TROPIK ENERGY

PT. KUTAI ETAM PETROLEUM

TRANSWORLD EXPL. LTD.

ENDEAVOUR ENERGY (BENGKULU) PTY LTD.

BUNGA MAS INTERNATIONAL COMPANY

PAN ORIENT (ex. BPREC)

GREENSTAR ASSETS LTD.

ZARATEX N.V.

STAR ENERGY SENTOSA (Sebatik) LTD.

SUMATERA PERSADA ENERGI

MARATHON INTERNATIONAL PETROLEUM INDONESIA LTD.

EXXONMOBIL EXPLORATION AND PRODUCTION SURUMANA LTD.

CONOCO PHILL. (AMBORIP VI) LTD.

CNOOC BATANGHARI LTD

RANHIL JAMBI INC. PTE LTD

TATELI BUDONG-BUDONG N.V

JAPEX BUTON LTD.

WEST NATUNA EXPL. LTD.

ODIRA ENERGY KARANG AGUNG

CONOCOPHILLIPS (KUMA) LTD.

SERICA KUTEI BV

PT HEXINDO (ex. INDELBERG HEXA PERKASA LEMANG)

PETROJAVA NORTH KANGEAN INC

INDOREACH EXPL. LTD.

STAR ENERGY (SEKAYU) LTD

MITRA ENERGY (IND. SIBARU) LTD

PT MOSESA PETROLEUM

PANDAWA PRIMA LESTARI

PT KALIMANTAN KUTAI ENERGI

SIGMA ENERGY PETRONAS

PERTAMINA HULU ENERGY KARAMA

EXXONMOBIL EXPLORATION AND PRODUCTION INDONESIA (MANDAR) LTD.

ADITYA NUGRAHA PRATAMA ENERGY LAMPUNG

TALISMAN (South Makassar) ltd.

TOTAL E&P SE MAHAKAM

PREMIER OIL H B.V

M3NERGY GAMMA SDN BHD

TIARA BUMI PETROLEUM

INSANI BINA PERKASA

PERTAMINA EP RANDUGUNTING

GENTING OIL KASURI PTE. LTD.

LUNDIN RANGKAS B.V.

MURPHY SOUTH BARITO LTD.

CNOOC PALUNG ARU

ENI WEST TIMOR LIMITED

CONOCOPHILLIPS (ARAFURA SEA BLOCK INDONESIA) LTD

LUNDIN BARONANG B.V

MARATHON INDONESIA (BONE BAY) LIMITED

PT PUTINDO BINTECH

LUNDIN CAKALANG B.V

CJSC SINTEZMORNEFTEGAZ

PEARL OIL (EAST MURIAH) LTD

SERICA EAST SERUWAY BV

EXXON MOBIL EXPLORATION & PRODUCTION INDONESIA (GUNTING) LTD

PEARL OIL (TACHYLYTE) LTD

PT KARYA INTI PETROLEUM

SPE PETROLEUM LTD

SPC E & P UPSTREAM PTE LTD

HUSKY OIL NORTH SUMBAWA LTD

MURPHY SEMAI OIL CO.LTD;

PT. SUMA SARANA

HESS(INDONESIA-SEMAI V)LTD

BLACK GOLD INDONESIA LLC

ACG (SOUTH BENGARA II) PTE.LTD

RANHILL PAMAI TALUK ENERGY PTE. LTD

NIKO RESOURCES (SOUTH EAST GANAL I) LTD

SALAMANDER ENERGY (SE SANGATTA)LTD

GUJARAT STATE PETROLEUM CORP. LTD.

BLACK GOLD SOUTH MATINDOK LLC

RADIANT BUKIT BARISAN E&P

CHEVRON WEST PAPUA I LTD

CHEVRON WEST PAPUA III LTD

NIKO RESOURCES (OVERSEAS II)LTD

THREE GOLDEN ENERGY WEST TUNGKAL

EXXON MOBIL EXPLORATION & PRODUCTION INDONESIA CENDRAWASIH LTD.

NORTHEN YAMANO TECHNOLOGY OIL

NIKO RESOURCES (OVERSEAS XVI) LTD.

MARATHON INDONESIA (KUMAWA) LTD;

PT HARPINDO MITRA KHARISMA

SARMI PAPUA ASIA OIL LTD.

ARCHIPELAGO RESOURCES

PT ENERGI MINERAL LANGGENG

REALITO ENERGI NUSANTARA CORELASI

HESS (INDONESIA SOUTH SESULU) LTD.

AWE (TERUMBU) NZ LTD.

ORCHARD ENERGY (WEST BELIDA) LTD.

TALISMAN ASIA LTD

Konsorsium Petronas - Pertamina

NIKO RESOURCES (HALMAHERA KOFIAU) LTD.

BLACK GOLD EAST BULA LLC.

NIKO (WEST PAPUA IV) LTD..

PT Brilliance Energy.

PT Sele Raya Energi

Baruna Nusantara Energy Ltd

Repsol Exploracion S.A.

NIKO RESOURCES (CENDRAWASIH BAY III) LTD.

NIKO RESOURCES (CENDRAWASIH BAY IVI) LTD.

PT. Sargas & Vega

Cakra Nusa Darma (SKKMG) Ltd

NIKO RESOURCES (SUNDA STRAIT I) LTD.

Konsorsium PT. Baruna Recovery Energy - AWE Ltd

Konsorsium Bumi Hasta Mukti - Fortune Energy

AIR KOMERING

BARITO

BELIDA

BULUNGAN

EAST SEPANJANG

MANOKWARI

NORTH WEST NATUNA

NUNUKAN

PANDAN

SEINANGKA-SENIPAH

SERUWAY

BENGKULU

BUNGAMAS

CITARUM

EAST KANGEAN

LHOKSEUMAWE

SEBATIK

WEST KAMPAR

PASANGKAYU

SURUMANA

AMBORIP VI

BATANGHARI

BATU GAJAH

BUDONG-BUDONG

BUTON

DUYUNG

KARANG AGUNG

KUMA

KUTAI

LEMANG

NORTH KANGEAN

PARI

SEKAYU

SIBARU

TONGA

WAIN

WEST SANGATTA

ENREKANG

KARAMA

MANDAR

OFFSHORE LAMPUNG I

SAGERI

SOUTH EAST MAHAKAM

TUNA

UJUNG KULON

WEST AIR KOMERING

ALAS JATI

RANDUGUNTING

KASURI

RANGKAS

SOUTH BARITO

SOUTH EAST PALUNG ARU

WEST TIMOR

ARAFURA SEA

BARONANG

BONE BAY

BUTON I

CAKALANG

EAST BAWEAN I

EAST MURIAH

EAST SERUWAY

GUNTING

KERAPU

LIRIK II

MADURA

MAHAKAM HILIR

NORTH SUMBAWA II

SEMAI II

SEMAI III

SEMAI V

SERAM

SOUTH BENGARA II

SOUTH CPP

SOUTH EAST GANAL I

SOUTH EAST SANGATTA

SOUTH EAST TUNGKAL

SOUTH MATINDOK

SOUTH WEST BUKIT BARISAN

WEST PAPUA I

WEST PAPUA III

WEST SAGERI

WEST TUNGKAL

CENDRAWASIH, PAPUA

EAST PAMAI, RIAU

KOFIAU, WEST PAPUA

KUMAWA MALUKU, WEST PAPUA

LAMPUNG 3, SUMATERA SELATAN

NORTHEN PAPUA, PAPUA

PASIR, KALIMANTAN TIMUR

SOUTH EAST MADURA, JAWA TIMUR

SOUTH BLOCK “A”, SUMATERA UTARA

SOUTH SESULU, KALIMANTAN TIMUR

TERUMBU, JAWA TIMUR

WEST BELIDA JAMBI, SUMATRA SELATAN

ANDAMAN III

WEST GELAGAH KAMBUNA

HALMAHERA KOFIAU

EAST BULA

WEST PAPUA IV

SULA I

BLORA

NORTH MAKASSAR STRAITR

CENDRAWASI BAY II

CENDRAWASI BAY III

CENDRAWASI BAY IV

PURI

Sakakemang

Sunda Strait I

North Madura

Mandala

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

59

60

61

62

63

64

65

66

67

68

69

70

71

72

73

74

75

76

77

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

100

101

102

103

104

105

106

107

108

109

110

111

112

113

114

115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

131

132

Karapan

Long Hubung Bagun

Malunda

South Mandar

Sadang

South Sageri

North Songkang

Titan

Bone

North Arafura

Sokang

South Sokang

Wokam

GMB SEKAYU

GMB BENTIAN BESAR

GMB INDRAGIRI HULU

GMB SANGATTA I

GMB BARITO BANJAR I

GMB BARITO BANJAR II

GMB KUTAI

GMB SANGATTA II

GMB TABULAKO

GMB OGAN KOMERING

GMB OGAN KOMERING II

GMB TANJUNG ENIM

GMB KOTABU

GMB PULANG PISAU

GMB BARITO TAPIN

GMB BARITO

GMB SANGA-SANGA

GMB RENGAT

GMB MUARA ENIM

GMB BATANG ASIN

GMB Muara Enim I

GMB Muralim

GMB Tanjung II

YAPEN

EAST BAWEAN II

REMBANG

HALMAHERA

DONGGALA

ASMAT

NORTH EAST MADURA-III

EAST AMBALAT

OFFSHORE LAMPUNG II

KARANA

PT. Leogryph Indonesia

PT. Kalisat Energi Nusantara

PTTEP Malunda Ltd.

PTTEP South Mandar Ltd.

Konsorsium Talisman - PTTEP Ltd

Konsorsium Talisman - PTTEP Ltd

Ephindo Oil and Gas Holding Inc

Konsorsium Awe Limite-PT Baruna Recovery Energy-

PT Silo Maritime Perdana

Mitra Energy Limited

BP Exploration Indonesia Limited

Black Platinum Investment ltd.

KONSORSIUM LUNDIN OIL AND GAS B.V. -

SALAMANDER ENERGY (INDONESIA) LTD

MURPHY OVERSEAS VENTURES INC.

MEDCO SEKAYU

RIDLAUTAMA MINING UTAMA

SAMANTA MINERAL PRIMA

Sangatta West CBM Inc.

PT Indobarambai Gas Methan

PT. Barito Basin Gas

Newton Energy Capital Limited

PT.Visi Multiartha

PT. Artha Widya Persada

PT. Ogan interior Gas

PT. EAST OGAN METHANE

ARROW ENERGY (TANJUNG ENIM) PTE LTD.

PT SATUI BASIN GAS

PT SIGMA ENERGY BUMI - BLUE TIGER CO. LTD.

PT TRISAKTI GAS METHAN

konsorsium PT Trans Asia Resources-PT Jindal Stainless Indonesia

Virginia CBM Indonesia Ltd.

Indon CBM Ltd.

PT Pertamina Hulu Metana Sumatera 2 dengan PT Trisula CBM Energy

Konsorsium Bumi Perdana Ltd dan Glory Wealth Pacific Ltd.

Konsorsium . PT Pertamina Hulu Energi Metana Sumatera I

(PHE Metra I) & PT Indo Gas Methan (IGM)

Konsorsium PT Medeo CBM Pendopo & Dart Energy (Muralim) Pte Ltd

PT Pertamina Hulu Energi Metan Tanjung II (PT PHE Metan Tanjung II)

NATIONS PETROLEUM (YAPEN) B.V.

HUSKY OIL EAST BAWEAN LTD.

ORNA INTERNATIONAL LTD.

HALMAHERA PETROLEUM LIMITED

SANTOS (Ex.Totalfina elf,Total,Santos,Chevron)

INPAROL (INDONESIA PAPUA PETROLEUM) PTE. LTD.

ANADARKO INDONESIA COMPANY

CHEVRON (Ex. Unocal)

PETRONAS CARIGALI LAMPUNG II Ltd.

PEARL OIL (K) LTD.

TERMINATION PROCESS: 10 WORKING AREAS OPERATOR

WORKING AREAS

GMB EXPLORATION: 23 WORKING AREAS OPERATOR

WORKING AREAS

133

134

135

136

137

138

139

140

141

142

143

144

145

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

1

2

3

4

5

6

7

8

9

10

Documents

BP Migas AnnualReport2010