Jakarta - PT Pertamina Hulu Mahakam (PHM), one of PT Pertamina Hulu Indonesia's subsidiaries, received government approval on fiscal incentive for Mahakam Work Area. The approval was given based on Government Regulation (PP) No 27/2017 on Change on Government Regulation No. 79/2010 on Refundable Operating Costs and Income Tax Treatment in the Upstream Oil and Gas Business. The incentive was the first one to be given to oil and gas contractor by the government based on said Government Regulation. 

Head of the Upstream Oil and Gas Special Regulatory Task Force (SKK Migas), Dwi Soetjipto, handed the government's approval letter to PHI President Director Chalid Said Salim during the Oil & Gas Investment Day, on Thursday, 17 June 2021 as part of the IPA Convention & Exhibition 2021 pre-event. The handover was also witnessed offline by PT Pertamina Hulu Energi CEO Budiman Parhusip with strict health protocol application and COVID-19 prevention efforts. 

Chalid Said Salim expressed his appreciation to SKK Migas, The MInistry of Energy and Mineral Resources and other authorized institutions for their support and approval to PHI on Mahakam Work Area Plan of Development Revision operated by PHM. 

"The incentive is important to maintain PHM's operation continuity and Mahakam Work Area production rate as one of the main contributors to national oil and gas production. This incentive  maximizes reserve recovery and Mahakam's resources while still providing a reasonable return on investment to Pertamina as our investor and value for all stakeholders," Chalid explained. 

The Mahakam Work Area is a terminated oil and gas block that have been in production for almost 50 years with a natural declining rate of 50% per year. As its operator, PHM, with the full support from PHI as its holding company, continues to conduct various efforts to contain the rate of production decline, extend the production time until the end of the contract while maintaining the economic level, and maintain its safety aspect.

Chalid continued that PHM developed various innovations to reach operation optimalization such as: rigless drilling technique, lighter well architecture, SIBU technique, and alter the well pressure. These efforts successfully reduced the operation costs by 40 percent without any Lost Time Injury (LTI). 

"Given that Mahakam Work Area still has significant reserve and reseources, we continue to conduct massive exploration and exploitation drilling to increase the oil and gas reserve and production. Thus, we need the government's incentive to guarantee PHM's business operation sustainability in the Mahakam Work Area while maintaining the economic level until the contract expire so we can continue to give benefits for the country and the public," Chalid said.