PHE, Sinopec, and KUFPEC Consortium Sign PSC Contract for Melati Block
Surabaya, October 15, 2024 – PT Pertamina Hulu Energi Sulawesi Melati, along with its consortium partners Sinopec International Energy Investment (SIEI) Melati Limited and KUFPEC Indonesia (Melati) B.V, have signed a Production Sharing Contract (PSC) for the Melati Block with the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas). The signing occurred at the Indonesia Exploration Forum (IEF) 2024 in Surabaya on Monday, October 14, 2024.
The PSC for the Melati Block was signed by the Director of PT Pertamina Hulu Energi Sulawesi Melati, Muhamad Arifin; Director of SIEI Melati Limited, Qin Shenggao; Director of KUFPEC Indonesia (Melati) B.V, Tareeq M. Ebrahim; Head of SKK Migas, Dwi Soetjipto; and Acting Director General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), Dadan Kusdiana.
In his speech, the head of SKK Migas, Dwi Soetjipto, emphasized that Indonesia needs extensive exploration to discover oil and gas reserves. "The potential for oil and gas industry development and the discovery of reserves in new blocks remains significant, along with growing investor interest in the upstream oil and gas industry. We hope that new reserves will continue to be found," Dwi stated.
The Acting Director General of Oil and Gas, Dadan Kusdiana, added that the new PSC for the Melati Block will help achieve the government's target of discovering new oil and gas reserves. "We hope that the collaboration within this exploration block will lead to discoveries through fulfilling exploration commitments," Dadan said.
The Melati Block PSC, located onshore and offshore in Southeast and Central Sulawesi, uses a Cost Recovery Scheme. PT Pertamina Hulu Energi Sulawesi Melati will be the operator, managing a working area of 8,453.70 km². The total firm commitment amounts to USD 12,700,000, which includes geological and geophysical studies, 200 km² of 3D seismic surveys, and 250 km of 2D seismic surveys over the next three years.
The President Director of PT Pertamina Hulu Energi Sulawesi Melati, Muhamad Arifin, expressed optimism regarding the Melati Block’s potential to find new oil and gas reserves. "Exploration in Eastern Indonesia represents new hope for the oil and gas industry, and we are ready to fulfill our exploration commitments in the Melati Block to discover new reserves," Arifin explained.
Before signing the PSC, the contractors had fulfilled their financial obligations, including paying a signature bonus and providing a performance bond following applicable regulations.
Key Terms of the Joint Operating Agreement (JOA) for Melati Block Agreed
Before the PSC signing, the Melati Block consortium—consisting of PT Pertamina Hulu Energi Sulawesi Melati, SIEI Melati Limited, and KUFPEC Indonesia (Melati) B.V—agreed on the key terms of a Joint Operating Agreement (JOA) governing the technical cooperation for managing and operating the Melati Block, located both onshore and offshore in Southeast and Central Sulawesi. The key terms signing for the JOA took place at The Westin Surabaya on Monday, October 14, 2024.
The JOA key terms were signed by the Director of PT Pertamina Hulu Energi Sulawesi Melati, Muhamad Arifin; Director of SIEI Melati Limited, Qin Shenggao; and KUFPEC Indonesia Country Manager, Sarah Al-Baker. The signing was witnessed by the Director of Strategic Planning and Business Development of PHE, Rachmat Hidajat.
In his opening speech, Rachmat Hidajat appreciated the JOA key terms completion. “I am pleased to have the opportunity to be part of this important moment,” Rachmat said.
He added that the efforts by PHE, Sinopec, and KUFPEC go beyond just signing documents. “This is about laying the foundation for a partnership built on collaboration, shared goals, and the belief that we are stronger together. This agreement represents the hard work, discussions, and dedication that have taken place over the past weeks and months.”
At the end of his speech, Rachmat expressed gratitude to all parties involved on both sides for making this partnership a reality. “It took a lot of coordination, commitment, and teamwork to bring us to this point. Here is to a successful partnership and many great achievements in the future,” he said.
On a separate occasion, the Vice President of Corporate Communication of PT Pertamina (Persero), Fadjar Djoko Santoso, stated that Pertamina is continuously expanding its upstream sector by striving to acquire new oil and gas reserves, including through the Melati Block.
“This collaboration is expected to support both the government’s and the company’s goals of increasing national oil and gas production while ensuring the country’s energy security,” Fadjar concluded.
PHE will continue to invest in the management of upstream oil and gas operations and business following the Environmental, Social, and Governance (ESG) principles. PHE is committed to the Ten Universal Principles of the United Nations Global Compact (UNGC) in its strategy and operations as part of its ESG implementation. PHE has been a member of the UNGC since June 2022.
Supporting the Governance aspect, PHE also upholds a zero-tolerance Bribery policy, ensuring fraud prevention and keeping the company free from bribery. It includes implementing the ISO 37001:2016-certified Anti-Bribery Management System (SMAP).
PHE continues to develop prudent and excellent operation management domestically and internationally to achieve its vision of becoming a world-class oil and gas company that is environmentally friendly, socially responsible, and committed to good governance.
Pertamina, as a leading company in the energy transition, is committed to supporting the Net Zero Emission 2060 target by continuously promoting programs that directly impact the Sustainable Development Goals (SDGs) achievement. All these efforts align with Environmental, Social & Governance (ESG) implementation across all Pertamina's business lines and operations.**