Overview of PTK 037 – 2018 regarding Plan of Development Rev 2

SKK Migas as a supervisory body of Oil and Gas (mandated by the Government) activity recently issued the PTK-037/SKKMGA0000/2018/S0 (“PTK 037”) on Plan of Development Revision 02 superseding the previous PTK POD Revision 01.

What is the Plan of Development (“POD”)?

The Plan of Development is a document which prepared by the Contractor of Cooperation Contract as a basis in doing an exploitation in Indonesia. The approval of Plan of Development is also as a change in status from Exploration Contractor into Exploitation (Production phase) Contractor.

Type of POD

The First POD (“POD I”)

 The first POD shall attain approval from the Minister of Energy and Mineral Resources (“MEMR”) based on SKK Migas consideration, the said approval of POD I indicates a change of status of the working area from the Exploration phase into the Exploitation Phase.

 Should there be any revision or amendment to the POD I, an approval from the MEMR Minister shall be obtained with regards to the proposed changed including all the economic calculation thereto.

 Second POD and the following (“Next POD”)

 The Next POD is a development of one or more field under the working area having a different structure from the previous approved POD. The Next POD shall obtain approval from the Chairman of SKK Migas and its for a secondary and tertiary recovery based on additional production result from the Secondary and Tertiary Recovery efforts.

 Put on Production (“POP”)

 POP is submitted based on the Exploration well finding on Exploitation Working Area by utilizing the existing production facilities. In the event it is not possible to use the existing facility due to technical and/or operation reason, then a request for required production facility may be submitted.

 An exploration wells which can be produced utilizing POP is maximum 2 (two) wells in each POP. Application and under 1 (one) structure, only 2 (two) POP can be granted. If such structure already having the second POP then the next activity (including the existing POP) have to be requested as POD.

 POP shall obtain an approval from Deputy of planning from SKK Migas.

 What if there is a change in the Operatorship?

In the event that the POD have been approved previously and there is a change in Operatorship, then the new Operator shall assume the obligation and further continue the said POD.

 Approval of the POD

  • POD can be approved after a POD discussion including technical and economical aspect whereas a multiplier effect upon national interest can be considered as one of the basis of the POD approval.
  • Note that POD approval for the Cooperation Contract Contractor under the Gross Split regime is in accordance with the prevailing laws and regulations.

 Can an advance work be done prior approval of POD ?

PTK 037 Chapter II Clause 4.4 stipulates that it can be conducted with the following terms and conditions:

  1. Such activity is drilling campaign and/or Production Facility activity; and
  2. It has been approved by the planning Deputy of SKK Migas.

After the said approval has been obtained the Contractor still has to obtain the approval of Next POD upon the said work.

Further Note on the changes in the Rev 2 is the Production Forecast of the Oil and Gas fields, previously it was 90% of P1 + 50% P2, now it is Oil/Gas: P1+P2

Frequently Asked Questions

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