ESDM Ministry Claims Saving Cost Recovery Fund Up To Rp15 Trillion
By : Hariyanto And Aldo Bella Putra | Thursday, June 07 2018 - 17:30 IWST

Menteri ESDM Ignasius Jonan
INDUSTRY.co.id - Jakarta - The Ministry of Energy and Mineral Resources (ESDM) announced it has saved cost recovery funds up to US $ 1,080 billion or around Rp15 trillion in the development of the Merakes Block in East Kalimantan.
EMR Deputy Minister of Energy and Mineral Resources Arcandra Tahar said in a release received Tuesday that the development of Merak Block by Italian investor Eni SpA (85%) and Pertamina Hulu Energi (15%) in East Sepinggan Block are still using cost recovery system financed from APBN.
"The POD (plan of development) of Eni's Merake Block has been approved and the cost has been successfully reduced to US $ 1,080 billion," said Arcandra Tahar.
Arcandra explained the cost of the Merakes project could be trimmed after investors agreed to reduce operating costs and capital expenditures. In addition, appropriate use of technology and goods contributes to the reduced value of the project.
The government is targeting Merakes field production that starts in 2019 to reach 150 million standard cubic feet per day (mmscfd). To encourage investment in the oil and gas sector, the ESDM ministry continues to make a number of breakthroughs.
In addition to trimming regulations that impede investment, the ESDM ministry is also reviewing the cost of developing blocks that have been designated by the winning bidders.
Previously the Ministry of Energy and Mineral Resources has also cut the cost of the development of the Blok Jambaran Tiung Biru (JTB) Cepu, East Java worth US $ 500 million or around Rp 7 trillion.
Originally, OxxonMobil's fee for JTB block development was US $ 2.050 billion. The block also uses the "cost recovery" system or the entire development cost of the block will be paid by the government from the APBN.
Thanks to the cutting of JTB Block development cost, finally State Electric Company (PLN) will absorb gas from JTB. The price of gas also fell to US $ 7.6 per mmbtu flat for 30 years.
Previously, with an investment value of US $ 2.050, the selling price of gas offered to PLN reached US $ 9 per mmbtu. So with the price of that PLN refused because it did not enter the price of the company's economy.
"PLN wants the price to not affect the cost of production (BPP) .With such prices (US $ 7.6 per mmbtu) BPP price will not raise," said Arcandra.
The ESDM ministry step cuts the cost of developing oil and gas blocks using cost recovery would certainly benefit the government.
In addition to reducing the burden on the state budget, cost cuts will also make Indonesia's oil and gas production more efficient and more transparent. For example from two Blocks namely Merakes and JTB, ESDM Ministry managed to save cost of "cost recovery" to about Rp22 trillion.
Read Also
The 7th Abu Dhabi Dialogue in Dubai: Commitment to Enhance Migrant…
Pertamina Hulu Rokan expounds on wetland innovations at COP28
Pertamina reaffirms its commitment to net zero emissions by 2060
President Jokowi Inaugurates Tangguh Train 3 Project in Teluk Bintuni…
MMA Offshore Automates Onboarding With Boomi
Today's Industry

Jumat, 28 Maret 2025 - 22:21 WIB
SUNeVision Initiates MEGA IDC Phase Two Development
SUNeVision, the technology arm of Sun Hung Kai Properties (SHKP), today announced the commencement of construction for Phase Two of MEGA IDC in Tseung Kwan O. As Hong Kong's largest data centre…

Jumat, 28 Maret 2025 - 22:07 WIB
TDL Records New Revenue Record of IDR 25 Trillion in 2024 Ahead of 50th Anniversary
PT Metrodata Electronics Tbk (MTDL), the largest technology Company with the most complete IT and telecommunications products in Indonesia, managed to record a revenue of IDR 25 trillion in…

Jumat, 28 Maret 2025 - 22:00 WIB
Wireless Logic Selected By Thales As IoT Connectivity Partner
Wireless Logic, a global leader in IoT connectivity solutions has been selected by Thales, a global leader in advanced eSIM technologies, to enable secure, scalable and resilient IoT connectivity…

Jumat, 28 Maret 2025 - 21:53 WIB
Microvista Expands International Presence with Mobile CT System ScanExpress
The German specialist in industrial computed tomography and non-destructive testing, Microvista, announces the European expansion of its innovative mobile CT system, ScanExpress. The system…

Jumat, 28 Maret 2025 - 21:44 WIB
Turning Loss into Profit, INOV Optimistic in Maintaining Positive Performance this Year
PT Inocycle Technology Group Tbk (INOV:IJ) Indonesia's leading and largest PET waste recycling Company managed to book sales of IDR 629 Billion in 2024, an increase of 4.8% compared to the previous…
News Comment