Technical Event – EOR Seminar

Indonesian EOR – How to make it work – 10 May 2017

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In the face of a massive 47% decline in Indonesian oil production since 1995, this seminar collated technical, commercial and regulatory ideas to accelerate EOR project maturation and implementation.

From our Keynote Speakers

Vice-Minister of ESDM Bapak Arcandra Tahar:

o     Do EOR now, because the recent Ministerial decree guarantees cost recovery even if your PSC is not extended.

o  The government is open to business-not-as-usual, such as performance-based business models like no-cure/no-pay.

o  Take a wide view.  Expand your EOR roadmap from subsurface and surface to include monitoring, procurement and cooperation between PSC’s.


SKKMigas Chairman Bapak Amien Sunaryadi:

o Huge prize: from 87 Bstb OIIP, we have remaining 3.3 Bstb of reserves plus 4.6 Bstb of resources from EOR and 55 Bstb of currently unrecoverable oil.

o  EOR potential is everywhere – 34 fields have been identified as having EOR potential.

o  EOR uptake to date is poor.  Since 2009 only 2 EOR pilots have been undertaken.

o EOR often surprises, so it is important to include reservoir performance monitoring throughout the EOR life-cycle.

Discussion Points – technical

  • EOR (along with exploration) is the key to the future oil production in Indonesia.  If we have no major discoveries, then the only hope to cope with domestic oil demand is to re-work mature fields to recover more oil.
  • EOR success means choosing the right technology – the Vice Minister supports efforts to invite EOR specialists from around the globe to support Indonesia EOR implementation.
  • Knowledge-sharing amongst PSC contractors will be needed to reduce costs and increase oil recovery. At the moment, the exact opposite happens.  PSCs won’t disclose details of their EOR methodologies (such as the ‘ingredients’ used) to SKK Migas – let alone with each other. This is partly tied to contract extension EOR know-how is leverage.
  • Reformation in field management is needed to gather more technical and subsurface understanding. Good monitoring practices and a strong mind-set to support EOR from day 1 will help future EOR project design. Doing all of this research and monitoring at the end of field natural drive is way too late. Plans of Development should include technical staircases such that phased EOR implementation is pursued at the right times during the development lifecycle and integrated with the base development.
  • Consider all EOR technologies not only the obvious:

o Low Salinity Flooding is relatively new and can be an early step eg. prior to application of chemical solutions.

o Indonesia has CO2 sources (subsurface, CCS) and should be considered depending on location of the oil field.

o CO2/foam technology needs consideration; for more viscous crudes this can be combined with steam application.

Discussion Points – commercial

  • EOR worldwide gets more drive during times of lower oil prices – we are lazy when high prices.
  • EOR is medium to long term.  Implementation at full speed will create an oil production peak in 2022-2023.
  • EOR needs a higher rate of return to attract investment – 17% IRR compared with 14% IRR for an onshore oil project), to balance the increased risks and long project duration.  The government needs to switch its mind-set from volume recovery to economic recovery.  Only economic recovery is recognised as reserves within the SPE Resource Guidelines of PRMS.
  • EOR creates multiplier effects such as growth in GDP, absorbing more workforce and developing suppliers of raw materials such as chemicals.
  • Group small EOR projects from various PSC’s for economy of scale, especially for chemicals.  We have a chicken-and-egg situation: GE and Schlumberger will consider building chemical factories but only after the EOR market develops.

Discussion Points – regulatory

  • Procurement flexibility needed – PTK-007 limits multi-years contract and stringent awarding.  So the contractor who wins the pilot project may not win the full-field project.
  • EOR is long-term, so full field implementation requires PSC contract extension.  Pak Wamen mentioned PerMen for cost recovery from next Operator so can start full field anytime (note: the previous contractor and its partners can recoup the investment but not the benefits including profits, cost of money).  But so far no mechanism or timeframe to recoup the money – ONWJ is the first case.
  • Problems in securing land for drilling/injector pads and permits are multiplied because of the large scale of EOR activities.

Summary from each guest speaker

  1. Alex Dolya of BCG highlighted the commercial dilemma and a number of options:

o Considering data from some other countries, it appears that the EOR projects require an IRR that is higher than currently achieved in Indonesia. This also applies for some conventional projects.

o Commercial options include: PSC period (need time for EOR), one set of fiscal terms for integrated conventional/EOR projects. Uncertainty in PSC extension and unattractive fiscal terms discourages investment in EOR.

o Another problem is the long approval time in Indonesia for EOR phase, typically >3 years compared to less than 1 year in other countries (USA, Canada, Russia, Mexico, Brazil). Need to streamline approval process & provide more certainty for EOR projects.

o OFS contacts and partnerships need to be long term. Restriction on longer term OFS contracts hinders efficient collaboration, information management and optimal project delivery (current contracts in Indonesia lasts ≤ 5 years). Partnerships with OFS are not allowed restricting efficient experience build up, and knowledge transfer to develop human capital. Operator – OFS partnership over the entire life cycle of EOR phase should be allowed.

o The cost structure needs to be competitive (eg taxes, logistics etc).

o Fields in Indonesia are maturing will account for ~70% of overall production in 2020. Investment amounts of $30-44 Bn necessary to fully realize EOR in Indonesia, and will create multiplier effects beyond production (16-24% increase) to GDP growth (~1% p.a) & employment rate (260k – 400k job creation).

  1. Jaime Ortiz of Schlumberger* highlighted their preparedness to support EOR projects depending on demand and stated that Every Reservoir is an EOR candidate. Messages include:

o Don’t wait till the end to implement EOR.

o Success of EOR depends on proper understanding of the subsurface and synchronized integration of various key technologies and services.

o Complexities of EOR and environment, therefore proper screening of EOR methods, lab test, modelling, pilot and field test, monitoring and controls is a must to reduce uncertainty and risks. (*material can be found in Schlumberger’s public website as well as youtube).

  1. Andrew Duncan of Gaffney Cline explained the application of SPE PRMS to EOR projects. Other messages include:

o Reserves are a Function of Technology, and told the story of Kern River oil reserves in comparison to the Duri steamflood.

o Improved recovery projects must meet the same commerciality criteria a primary recovery: project-based, economic, committed, and validated by a favorable production response from a pilot test (or close analogue where a successful EOR project has been applied).

o Indonesia has an established history of successful, world-scale EOR applications.

o EOR implementation takes time, investment, and experimentation.

  1. Andi Bachtiar of Pertamina EP highlighted some constraints including regulatory, technical such as no access to international experts and R&D, and the lack of local contracting requirements, materials particularly chemicals and services. Other messages include:

o Pushing 9 (nine) EOR projects, related to surfactant, polymer and CO2 flooding. A polymer pilot will start this year.

o Technical challenges described were reservoir condition: multilayer, tight, high temp, etc.; aging infrastructure and resources as Pertamina lacks in the number of researchers and professionals with the skills, knowledge  & experience in EOR.

  1. Arya Disiyona of SKKMIGAS highlighted the Indonesian Reserve Classification system (SNI), which is not aligned with the 2007 SPE PRMS.


  •     Include EOR-friendly fiscal terms in PSC’s to stimulate investment in this sector.
  •     Force knowledge sharing from PSC’s with experience in EOR.
  •     Support from SKKMigas and Government is needed to make it work.






Photos and presentations can be accessed by clicking on the pictures below:

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Global EOR Project Economic Benchmark

Indonesia EOR Integrated Workshop

EOR Challenges & Aspiration to Implement EOR in Indonesia Fields

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