George Barber

Country Manager Indonesia at Terra Energy & Resource Technologies, (TERT) Inc.
Last Updated: September 25, 2017
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Exploration
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It is a shame to spoil natures natural beauty as we can see from the picture that leads this article, Indonesia is blessed with many such areas, in order to preserve nature and what has been given to all of us, we need to explore in an environmentally friendly way and adapt to new ideas, after all, if mankind is to survive, resources will always be required.

Richard Fuller recently published a very interesting article in the Jakarta Post (JP) titled “The risk of losing an important asset – natural gas”. In this article, he mentioned that the cost of 2D, 3D seismic over ten years would be $2 billion, a figure that makes one eyes water, with an extremely long time frame (10 years). It was also stated that by continuing to pursue oil and gas exploration under the historic and current procedures that Indonesia would lose $1.1 trillion in economic benefits, another eye-watering figure, even in Rupiah too many of us. 

The Vice President of Indonesia, Jusuf Kalla made a statement at the opening ceremony for the IIGCE conference on 2 August that the cost of exploration for geothermal is quite high, considering the cost of exploration required for the development of one Geothermal Working Area (WKP) is approximately US $20-25 million. We need to bear in mind that one WKP is normally forty to fifty Square Kilometre in size and that the total length of the geothermal arc in Indonesia is 5100 km.

I made the following statements at the IIGCE conference during my presentation which was titled "Exploration Requirements to Achieve the Geothermal Development 2025 Target” that “Speculation should not be a part of the geothermal vocabulary, neither should the common belief that exploration costs are high.  Yes, they are if we insist on not accepting or adapting our exploration methods to Innovative Exploration Tools (IET) that do reduce the Time, Cost and Risk of Exploration”.

“Many parts of Indonesia are unexplorable by traditional methods of exploration, large parts of Indonesia's resources potential has not been explored, actual resources are not known. Current pre-drilling practices for geothermal exploration methods are time-intensive, costly and do not achieve active reservoir imaging”. 

IET will provide the information and data that will encourage license tender participation and investment, which in turn will generate further interest in the Indonesian geothermal and resource industry”.  This also applies to oil, gas, and minerals. 

Another article in the JP that was titled “Oil crisis lurks as production drops, consumption soars”, in this article it states that Indonesia has depleted more than 90% of their oil reserves within a period of sixty years, this can not be a true, as Indonesia does not know the actual reserves that it had or has, neither does it know the full potential of the geothermal and mineral resources available, all estimations are speculation, based on extremely experienced consultants and geoscientists reports, who by the way get paid vast sums of money very often from the taxpayers money. These reports are speculation and only become reality when they have been confirmed by exploration, which is unlikely to happen when we look at the eye-watering figures that are being quoted. 

There is a Roadmap Project called “Geothermal Island Flores” with cooperation from the British government through FCO-UK at the British Embassy and the World Wide Fund for Nature (WWF). The project is developing a related study "Tariff Model Geothermal Energy and Geothermal Roadmap. It is intended to make Flores a Geothermal showcase for Indonesia. This is a very good idea, although exploration is required.

One of the problems, in my opinion, is that there are far too many companies that have self-interest, they have invested in certain exploration tools and of course want this expensive equipment to be used, drilling companies want to drill more holes, seismic companies want to run more kilometres, do they care if a resource is found or nature is destroyed? The owner of a block, mine or geothermal working area should care as it is them that are paying for very expensive methods of exploration, which by the way has not changed in many years, seismic has been around for 100 years, it makes a noise, we get a return, this is what it did 100 years ago, the principle is the same, the tools have improved tremendously over the years, especially with the processing power with the advent of powerful computers, but at the end of the day, the principle is the same. These tools were designed out of necessity.

Is it not time that new ideas for exploration that enhances our way of doing exploration are used, tools that have been designed by geoscientists, geologists, people of the trade, based on sound and proven geoscience and geology which by the way has also not changed so much over the years. Drilling and seismic companies will be doing more as the overall cost of exploration is reduced, instead of today where they are doing very little work.

Should we not be accepting IET as part of the exploration toolbox? Of course we should, the same way that we accepted in the mid 1980’s new ways of conducting hydrographic surveys which improved the output and the quality of surveys, no one lost jobs, in fact more jobs were created as the ships were able to spend more time at sea collecting data instead of drawing the results by hand. 

Innovative exploration programs will provide the information and data that will encourage license tender participation and investment, which in turn will generate further interest in the Indonesian geothermal and resource industry at a fraction of the costs that have been suggested in this article and in far less time, months rather than years.

Indonesia must elevate the value and level of information given to investors and it must invest to do this, but invest wisely, not with methods that we know carry high-risk. New thinking and new strategies are required to meet this challenge. The government and the industry need to work together to achieve their mutual goals. An examination of government policy related to the exploration industry is also in order, but first and foremost we must further de-risk exploration investment, and use innovative, cost-effective tools which can bridge the gap and at the same time save the unnecessary destruction of our environment by carrying out exploration looking for something that may not exist.

“With the technology at our disposal, the possibilities are unbounded. All we need to do is make sure we use it” – Stephen Hawking

 


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Student guardian visa subclass 590 allows you to stay in Australia as a guardian or custodian or relative of an overseas student who is pursuing an education course in Australia. With 590 student guardian visa, You can stay with your child to take care of him/her in Australia until the course complete. Your child age must below then 18th years old before applying for a student guardian visa 590. If you're a relative then you can stay with the child by submitting written permission of a child’s caretakers like a guardian or grandparents. If your child is older then eighteen years then to apply for visa subclass 590 you need to show that you have special emergency circumstances. You can apply for a 590 student guardian visa outside from Australia and acquire enrollment in alternative courses up to three months with a 590 visa. You will be authorized to take care more then one child if you have. You can do the other study or coach just for 3 months with this Student Guardian Visa Subclass 590

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August, 21 2019
TODAY IN ENERGY: The U.S. leads global petroleum and natural gas production with record growth in 2018

U.S. petroleum and natural gas production increased by 16% and by 12%, respectively, in 2018, and these totals combined established a new production record. The United States surpassed Russia in 2011 to become the world's largest producer of natural gas and surpassed Saudi Arabia in 2018 to become the world's largest producer of petroleum. Last year’s increase in the United States was one of the largest absolute petroleum and natural gas production increases from a single country in history.

For the United States and Russia, petroleum and natural gas production is almost evenly split; Saudi Arabia's production heavily favors petroleum. Petroleum production is composed of several types of liquid fuels, including crude oil and lease condensate, natural gas plant liquids (NGPLs), and bitumen. The United States produced 28.7 quadrillion British thermal units (quads) of petroleum in 2018, which was composed of 80% crude oil and condensate and 20% NGPLs.

estimated petroleum and natural gas production in selected countries

Source: U.S. Energy Information Administration, based on International Energy Statistics
Note: Petroleum includes crude oil, condensate, and natural gas plant liquids.

U.S. crude oil production increased by 17% in 2018, setting a new record of nearly 11.0 million barrels per day (b/d), equivalent to 22.8 quadrillion British thermal units (Btu) in energy terms. Production in the Permian region of western Texas and eastern New Mexico contributed to most of the growth in U.S. crude oil production. The United States also produced 4.3 million b/d of NGPLs in 2018, equivalent to 5.8 quadrillion Btu. U.S. NGPL production has more than doubled since 2008, when the market for NGPLs began to expand.

U.S. dry natural gas production increased by 12% in 2018 to 28.5 billion cubic feet per day (Bcf/d), or 31.5 quadrillion Btu, reaching a new record high for the second year in a row. Ongoing growth in liquefied natural gas export capacity and the expanded ability to reach new markets have supported increases in U.S. natural gas production.

Russia’s crude oil and natural gas production also reached record levels in 2018, encouraged by increasing global demand. Russia exports most of the crude oil that it produces to European countries and to China. Since 2016, nearly 60% of Russia’s crude oil exports have gone to European member countries in the Organization for Economic Cooperation and Development (OECD). Russia’s crude oil is also an important source of supply to China and neighboring countries.

Russia’s natural gas production increased by 7% in 2018, which exceeded the growth in exports. The Yamal liquefied natural gas (LNG) export facility, which loaded its first cargo in December 2017, can liquefy more than 16 million tons of natural gas annually and accounts for almost all of the recent growth in Russia’s LNG exports. Since 2000, more than 80% of Russia’s natural gas exports have been sent to Europe.

Saudi Arabia’s annual average crude oil production increased slightly in 2018, but it remained lower than in 2016, when Saudi Arabia’s crude oil output reached a record high. Saudi Arabia’s crude oil production reached an all-time monthly high in November 2018 before the December 2018 agreement by the Organization of the Petroleum Exporting Countries (OPEC) to extend production cuts.

In addition to exporting and refining crude oil, Saudi Arabia consumes crude oil directly for electricity generation, which makes Saudi Arabian crude oil consumption highest in the summer when electricity demand for space cooling is relatively high. Since 2016, Saudi Arabia’s direct crude oil burn for electric power generation has decreased for a number of reasons, including demand reductions from a partial withdraw of power subsidies, greater use of residual fuel oil, and increased availability of domestic natural gas.

Crude oil exports account for about 60% of Saudi Arabia’s total economic output. China, along with Japan, South Korea, Taiwan, and the United States remain critical markets for Saudi Arabia’s petroleum exports.

August, 21 2019
Your Weekly Update: 12 - 16 August 2019

Market Watch 

Headline crude prices for the week beginning 12 August 2019 – Brent: US$58/b; WTI: US$54/b

  • Saudi Arabia’s overtures to further stabilise prices was met with a largely positive response by the market, allowing crude prices to claw back some ground after being hammered by demand concerns
  • Saudi officials reportedly called other members in the OPEC and OPEC+ producer clubs to discuss options on how to stem the recent rout in prices, with an anonymous official quoted as saying that it ‘would not tolerate continued price weakness’
  • Reports suggest that Saudi Arabia plans to keep its oil exports at below 7 mmb/d in September according to sales allocations, which was seen as a stabilising factor in crude price trends
  • This came after crude prices fell as the US-China trade war entered a new front, causing weakness in the Chinese Yuan, although President Trump has floated the idea of delaying the new round of tariffs beyond the current implementation timeline of September 1
  • Crude had also fallen in response to a slide in American crude oil stockpiles and a receding level of tensions in the Persian Gulf
  • In a new report, the International Energy Agency said that the outlook for global oil demand is ‘fragile’ on signs of an economic slowdown; there is also concern that China will target US crude if the US moves ahead with its tariff plan
  • The US active rig count lost another 8 rigs – 6 oil and 2 gas – the sixth consecutive weekly loss that brought the total number of active rigs to 934
  • Demand fears will continue to haunt the market, which will not be offset so easily of Saudi-led efforts to limit production; as a result, crude prices will trade rangebound with a negative slant in the US$56-58/b range for Brent and US$52-54/b for WTI


Headlines of the week

Upstream

  • Nearly all Anadarko shareholders have approved the Occidental Petroleum deal, completing the controversial takeover bid despite investor Carl Icahn’s attempts to derail the purchase
  • Crude oil inventories in Western Canada have fallen by 2.75 million barrels m-o-m to its lowest level since November 2017, as the production limits in Alberta appear to be doing their job in limiting a supply glut while output curbs are slowly being loosened on the arrival of more rail and pipeline capacity
  • Mid-sized Colorado players PDC Energy and SRC Energy – both active in the Denver-Julesburg Basin – are reportedly in discussion to merge their operations
  • Pemex has been granted approval by the National Hydrocarbon Commission to invest US$10 billion over 25 years to develop onshore and offshore exploration opportunities in Mexico
  • Qatar Investment Authority has acquired a ‘significant stake’ in major Permian player Oryx Midstream Services from Stonepeak Infrastructure Partners for some US$550 million, as foreign investment in the basin increases
  • PDVSA and CNPC’s Venezuelan joint venture Sinovensa has announced plans to expand blending capacity – lightening up extra-heavy Orinoco crude to medium-grade Merey – from a current 110,000 b/d to 165,000 b/d
  • BHP has approved an additional US$283 million in funding for the Ruby oil and gas project in Trinidad and Tobago, with first production expected in 2021
  • CNPC, ONGC Videsh and Petronas have reportedly walked away from their onshore acreage in Sudan, blaming unpaid oil dues on production from onshore Blocks 2A and 4 that have already reached more than US$500 million

Midstream/Downstream

  • Expected completion of Nigeria’s huge planned 650 kb/d Dangote refinery has been delayed to the end of 2020, with issues importing steel and equipment cited
  • Saudi Aramco’s US refining arm Motiva announced plans to shut several key units at its 607 kb/d Port Arthur facility in Texas for a 2-month planned maintenance, affecting its 325 kb/d CDU and the naphtha processing plant
  • ADNOC has purchased a 10% stake in global terminal operator VTTI, expanding its terminalling capacity in Asia, Africa and Europe
  • A little-known Chinese contractor Wison Engineering Services has reportedly agreed to refurbish Venezuela’s main refineries in a barter deal for oil produced, in a bid for Venezuela to evade the current US sanctions on its crude exports
  • Swiss downstream player Varo Energy will increase its stake in the 229 kb/d Bayernoil complex in Germany to 55% after purchasing BP’s 10% stake
  • India has raised the projected cost estimate of its giant planned refinery in Maharashtra – a joint venture between Indian state oil firms with Saudi Aramco and ADNOC – to US$60 billion, after farmer protests forced a relocation

Natural Gas/LNG

  • The government of Australia’s New South Wales has given its backing to South Korea’s Epik and its plan to build a new LNG import terminal in Newcastle
  • Kosmos Energy is proposing to build two new LNG facilities to tap into deepwater gas resources offshore Mauritania and Senegal under development
  • In the middle of the Pacific, the French territory of New Caledonia has started work on its Centrale Pays Project, a floating LNG terminal with an accompanying 200-megawatt power plant, with Nouvelle-Caledonia Energie seeking a 15-year LNG sales contract for roughly 200,000 tons per year
August, 16 2019