Jakarta - PT Pertamina Hulu Kalimantan Timur (PHKT) signed a Joint Agreement for the Rig to Reef Pilot Project (Project Agreement) with KHAN from South Korea as a form of commitment to carry out compliant and environmentally friendly oil and gas operations in all areas of the Company's operations.

The General Manager of Zona 10, Djudjuwanto, explained that the signing of this activity is a continuation of the program since the initiation of this pilot project in July 2019. According to him, this Project Agreement is a derivative of the Implementing Arrangement, a legal umbrella between the Government of Indonesia and South Korea, signed in March 2022.

"This Project Agreement is a legal protection that regulates in more detail related to the implementation of the demolition of oil and gas platforms in the Attaka field, their transportation, and sinking near the Bontang conservation area. To become a supporting structure for coral reef growth, commonly called rig to the reef," said Djudjuwanto.

With this new habitat and ecosystem resulting from this rig to reef project, hoping that it will increase fish populations, create a multiplier effect of economic growth, and increase fishermen's catches and the economy of diving tourism (recreation diving).

As has been implemented in other countries, such as in the Gulf of Mexico of the United States, Brunei, and Malaysia, these artificial coral reefs will create new habitats and ecosystems to increase biodiversity in these waters, which is very good for the environment and sustainability.

Meanwhile, the President Director of PT Pertamina Hulu Indonesia, the parent company of PHKT, Chalid Said Salim, said that the rig to reef concept also reduces decommissioning costs by up to 10%-20% because it reduces the handling cost on land.

"This pilot project is a breakthrough in Indonesia's upstream oil and gas industry which can later become a reference for decommissioning projects in the future, both in terms of planning, licensing, engineering, to implementation," said Chalid.

Chalid expressed his gratitude to all ministries and institutions in Indonesia, the Government of South Korea, and a consortium of Korean contractors that provided grants of this service to the Government of Indonesia in this project. Chalid also expressed his appreciation to KHAN Management, the implementer of this pilot project, and hopes that the experience in this pilot project will add value, capacity, and capability to KHAN in the construction business and offshore decommissioning particularly.

"I invite all parties to continue to collaborate, cooperate and communicate as well as possible so that we can control this pilot project to completion safely and realize the benefits for all parties," concluded Chalid.

KHAN Project Manager JN Yoon expressed his appreciation for the collaboration in this project and that this project will provide the best results. "Hopefully, we can continue to maintain the good relationship and keep the collaboration in the future," said JN Yoon.

In the next 1-2 months, the series of activities before the offshore campaign is still quite a lot with tight deadlines, including the issuance of Permits for Demolition of Installations in the Waters by the Director General of Hubla, the Environmental Permits for the scope of Sinking (Reefing), permits for implementing contractors such as Cabotage permits (use of foreign-flagged vessels), foreign labor permits and other small-scale permits.

PHKT will continue to support this Government initiative with the best efforts in line with applicable regulations. Currently, PHKT is looking forward to the next milestone of this project, namely the Sailaway Heavy Lift Barge (HLB) from Batam Island at the end of September 2022.

PT Pertamina Hulu Kalimantan Timur (PHKT) is a subsidiary of PHI that manages upstream oil and gas operations and businesses by following the principles of Environment, Social, and Governance (ESG) in the East Kalimantan & Attaka Working Area in East Kalimantan. PHKT, other PHI subsidiaries, and affiliates continue to carry out various innovations and technological applications in producing safe, efficient, reliable, compliant, and environmentally friendly energy to realize #EnergiKalimantanUntukIndonesia. More information about PHI is available at https://phi.pertamina.com.