Oil and gas company PetroChina International Jabung Ltd. positively sees the extension of the Jabung Working Area (WK) contract until 2043, utilizing the cost recovery contract scheme.
The cost recovery contract scheme is deemed to enhance PetroChina’s investments in Jabung, Jambi, where operations commenced back in 2002. This commitment was expressed by General Manager of PetroChina International Jabung Ltd., Wang Heping, during a hearing with the House of Representatives (DPR) Commission VII and the Upstream Oil and Gas Regulatory Task Force (SKK Migas) in Jakarta on Wednesday, March 13, 2024.
“We view the contract extension, utilizing the cost recovery terms, as a stimulus for us to continue exploring and developing reserves in the Jabung Working Area,” Wang said during the hearing.
Through the cost recovery scheme, PetroChina’s management aims to attract more significant investments from their headquarters in Beijing to develop the Jabung Working Area.
“Especially for PetroChina, its portfolio in Indonesia is still relatively small compared to other countries,” Wang said.
PetroChina International Jabung Ltd. has secured the contract extension as the operator of the Jabung WK for the period of 2023–2043. The government, through the Ministry of Energy and Mineral Resources (ESDM), signed the Jabung Working Area contract extension in Jakarta in November 2021.
The Jabung Working Area (WK) contract extension was signed by SKK Migas and members of the Jabung Consortium, consisting of PetroChina as the operator, PT Pertamina Hulu Energi Jabung, PT GPI Jabung Indonesia, and Petronas Carigali (Jabung) Ltd. as non-operator partners. PetroChina, headquartered in Beijing and a subsidiary of the China National Petroleum Corporation (CNPC), has been operating the Jabung WK since 2002. From 2002 to 2020, PetroChina has invested USD 5.71 billion or approximately IDR 81.5 trillion, and more than USD 20 million or IDR 285 billion for community empowerment programs. The first Jabung WK contract was signed in 1993 for a 30-year period.
The working area made its first oil discovery in the North Geragai Field in East Tanjung Jabung in 1995, with the first production in 1997. Until 2020, the Jabung WK has produced a total of 362.22 million barrels of oil equivalent (MMboe) of oil, gas, and condensate. Since 2006, PetroChina has maintained an average daily production above 50,000 barrels of oil equivalent per day (boepd). In 2020, Jabung was one of the best-performing WKs, ranking seventh in oil and condensate production with 15,928 bopd and eighth in gas lifting with 171 MMscfd.
