In promoting better and more efficient upstream oil and gas exploration activities in Indonesia, the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) has made breakthroughs particularly in strategic commodity goods/services procurement activities. Since the beginning of 2018, SKK Migas along with PT Pertamina (Persero) (Pertamina) has refined the agreement that was made in 2014 concerning the guarantee of supply, services and special prices for the upstream oil and gas industry for fuel oil commodities, lubricants and oil base mud products of Pertamina.

Deputy of Procurement Control, Tunggal at the Memorandum of Understanding rollout session organized by SKK Migas together with Pertamina, (on 18 May 2018) to Oil and Gas Exploration Contractors, revealed that upstream oil and gas operations must be effective and efficient; and in order to increase oil and gas production, exploration activities must be fully supported and need to be given a special attention. This agreement is certainly very important to ensure the smooth running of exploration activities through a more efficient supply and cost guarantee.

“The breakthroughs made are expected to provide ease for upstream oil and gas exploration activities with a more efficient cost, and eventually make a giant discovery,” Tunggal continued.

Tunggal said that the optimization of this service is expected to save a cost recovery of US $ 63,014,919.31 within 5 years. This saving comes from discounts on purchases of fuel and lubricants.

Head of SKK Migas’ Goods and Services Procurement Management Division, Erwin Suryadi, said that the achievement of efficiency in the upstream oil and gas industry will be greatly influenced by a continuous synergy with strategic partners. In addition to using agreements that have been made by SKK Migas, Oil and Gas Exploration Contractors are also encouraged to build a synergy with Oil and Gas Production Contractors in procurement activities, among others through joint procurement, farm-in contracts and so forth.

“The utilization of facilities from joint procurement of equipment such as drilling towers, equipment, and the use of discounts that have been sought by SKK Migas by actively negotiating with parties such as Pertamina will be very helpful for Oil and Gas Exploration Contractors considering the demands of the exploration contracts that require contractors to work efficiently since the cost remains their own risk and responsibility. It is also important that this strategic partnership is to ensure supply for upstream oil and gas operations,” Erwin added.

SKK Migas’ initiative was also appreciated by Pertamina represented by Arief Prianto as the Key Account Industry Manager, who in this occasion said that Pertamina is ready to support the smooth running of upstream oil and gas activities in Indonesia and hoped that Pertamina products such as Lubricant and Petrochemical can also be utilized optimally by the Upstream Oil and Gas Industry in Indonesia.

The Oil and Gas Exploration Contractors attending the event also welcomed the breakthroughs made by the SKK Migas’ Procurement Management Division, since the ease of doing business like this, is highly anticipated and will be a means to spur the spirit of the contractors in conducting the exploration activities in Indonesia. Hopefully with these breakthroughs, there can be a giant discovery.