GARUT – The Centre of Energy and Resources Indonesia (CERI) considers PT Medco E&P Indonesia to have given an indifferent answer to the Upstream Oil and Gas Regulatory Task Force (SKK Migas) regarding the Sales Mechanism of State Part Condensate at Medco Energi Bengkanai Limited (MEBL) Production Sharing Contract in North Barito regency, Central Kalimantan province.
“Medco E&P was not firm in answering CERI’s confirmation. However, after CERI made an official confirmation to the staff of the Commercial Section of SKK Migas, it turns out that the state share of condensate was not tendered by Medco Energy Bengkanai since 2018 until 2024 to the buyer PT Kimia Yasa with the Senipah Condensate formula at – (minus) USD 37.57 per barrel,” CERI Executive Director, Yusri Usman, said in a statement as quoted on Sunday, February 25, 2024.
“However, we obtained data that a company proposed the purchase of Karendan condensate from Medco Energy Bengkanai field around early October 2023 to the Deputy of Finance and Commercial of SKK Migas with the formula of Senipah Condensate – (minus) USD 35 per barrel,” he added.
Yusri said further that the sale of the state’s share of condensate without a tender is suspected to have cost the state USD 2.57 per barrel, so the total state loss is simply multiplied by the total volume of the state’s share of condensate that has been sold by MEBL to PT Kimia Yasa.
“It is the duty of Supreme Audit Agency to calculate it and the duty of the Corruption Eradication Commision (KPK) and the Attorney General’s Office to investigate it,” he said.
Answering CERI’s confirmation, Sr. Manager Communication of PT Medco E&P Indonesia, Leony Lervyn Saragi said in a letter No. EXT-010/RNS/INA/MEDC/II/2024 dated 15 February 2024, among others, that Medco Energi Bangkanai Ltd (MEBL) as a Cooperation Contractor (KKKS) under the supervision of SKK Migas confirmed that all activities and transactions carried out by the Company have fulfilled and are in accordance with applicable regulations and standard operating procedures (SOP).
“Regarding the activities of PT Kimia Yasa (KY), MEBL confirms that PT KY is a condensate buyer,and not an affiliate of MEBL. The process of transporting, storing and distributing condensate is carried out by PT KY. All such activities, from the time it leaves Medco E&P’s operation site, are the responsibility of PT KY. For further information, please contact PT KY management,” Leony wrote.
Yusri accused SKK Migas of not functioning to oversee this business process, while questioning the sale of state part of condensate was carried out without a tender so that it had the potential not to provide maximum benefits to the state.
He suggested that the Minister of Energy and Mineral Resources should investigate the performance of SKK Migas in this case. “It could be that practices like this also occur in other companies which can cause oil and gas lifting to continue to decline from year to year,” he said.
According to Yusri, it is known that 20 MMSCFD of gas coming from Medco Energi Bengkanai field is supplied to the gas needs of the Bengkanai 1 gas-fired power plant owned by PLN with a capacity of 140 MW.
“And since 2022, it has been reported that the Bengkanai 2 gas-fired power plant has been operating with a capacity of 140 MW, we just don’t know where the gas supply comes from,” said Yusri.
Never reported
A quick search into the website of the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources on activities in downstream oil and gas related to PT Kimia Yasa and PT Prima Surya Putra reveals some surprising information.
PT Kimia Yasa is known to have an Oil and Gas Processing Licence, but has never reported its business activities to the Ministry of Energy and Mineral Resources.
In addition, PT Kimia Yasa apparently does not have an Oil and Gas Transport Licence.
“PT Kimia Yasa is also known to have an oil and gas trading licence, but has not reported its business activities to the ministry of energy and mineral resources from October 2022 to December 2022,” said Yusri.
In regards with PT Prima Surya Putra, it is said that its subcontractor PT Kimia Yasa is known to have an Oil and Gas Transportation permit, but has never reported its business activities to the Ministry of Energy and Mineral Resources.
“On February 12, 2024, CERI sent a copy of the confirmation letter to PT Medco Energy Bengkanai Ltd with a copy each sent to the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources, SKK Migas, PT Kimia Yasa and PT Prima Surya Putra regarding the sale of the state’s share of condensate in Bengkanai field owned by MEBL. However, until now there has been no rebuttal from PT Kimia Yasa and PT Prima Surya Putra,” Yusri said.
