Banyu Urip - ExxonMobil Indonesia

Banyu Urip
from Indonesia, for Indonesia
ExxonMobil in Indonesia
ExxonMobil is the world’s largest publicly-traded integrated
petroleum and natural gas company. Our company and its
affiliates are present on a global scale.
We have been in Indonesia for more than 115
years. Since 1968, ExxonMobil operates the
Arun field in Aceh Province as a Production
Sharing Contract (PSC) Contractor of the
Government of Indonesia. At its peak, the
Arun field produced about 3.4 billion cubic
feet of gas per day and about 130,000 barrels
of condensate per day.
Learn more about ExxonMobil
at www.exxonmobil.co.id
Exxon Mobil Corporation has numerous affiliates in Indonesia, e.g. ExxonMobil Oil Indonesia
Inc. and Mobil Cepu Ltd., many with names that include ExxonMobil, Exxon, Esso and Mobil. For
convenience and simplicity in this publication, those terms and the terms corporation, company,
our, we and its are sometimes used as abbreviated references to specific affiliates or affiliate
groups. Similarly, ExxonMobil has business relationship with thousands of customers, suppliers,
governments and others. For convenience and simplicity, words like venture, joint venture,
partnership, co-venturer and partner are used to indicate business relationships involving common
activities and interests, and those words may or may not indicate precise legal relationships.
In 2005, the Cepu Block Production Sharing
Contract (PSC) was signed. A Joint Operating
Agreement (JOA) was entered into by the
contractor parties. Mobil Cepu Ltd., an
ExxonMobil subsidiary, serves as the operator
of the Cepu Block PSC on behalf of the
Contractors.
Cepu Block
SU
M
KALIMANTAN
AT
RA
SULAWESI
PAPUA
Cepu Block
JAVA
Lengo Jati
INDONESIA
Cepu Block
EAST JAVA
CENTRAL JAVA
EAST JAVA
BANYU URIP
PROJECT
Lengo Urip
N
W
E
S
Kedung Keris
Sukowati
Banyu Urip
Nampak
Cendana
Alas Tua West
Cepu PSC
Alas Tua East
3D seismic survey
DISCOVERIES
Oil & Gas
Ri
ve
r
Jambaran Tiung Biru
Gas
So
lo
Oil
kilometers
0
The Cepu Block Production Sharing Contract
(PSC) was signed on 17 September 2005
and covers the Cepu Contract Area in Central
and East Java. ExxonMobil affiliates [Mobil
Cepu Ltd. (MCL) and Ampolex (Cepu) Pte.
Ltd.], PT Pertamina EP Cepu [an affiliate
of PT Pertamina (Persero)] and four local
government companies: PT Sarana Patra
Hulu Cepu (Central Java Province), PT Asri
Dharma Sejahtera (Bojonegoro Regency), PT
Blora Patragas Hulu (Blora Regency) and PT
Petrogas Jatim Utama Cendana (East Java
Province) together comprise the contractors
under the Cepu PSC.
ExxonMobil affiliates and PT Pertamina EP
Cepu equally hold 45 percent of the total
participating interest in the Cepu Block,
while the remaining is held by the four local
5
100
government enterprises. The Cepu PSC will
continue until 2035.
A Joint Operating Agreement (JOA) was
entered into by the contractor parties. MCL
serves as the operator of the Cepu KKS on
behalf of the Contractors.
Apart from Banyu Urip, there are other fields
in the Cepu Block. They are Alas Tua East,
Alas Tua West and Kedung Keris fields; and
Cendana and Jambaran fields.
Through increased economic output, job
creations and community development
programs, Cepu Block project development
and production will have multiplier effects on
other industries and local communities.
02
Foreword
The Banyu Urip project is a joint
effort to meet Indonesia’s growing
energy needs—an effort that will
benefit Indonesia’s economy and
transfer technology and industrial
values to the country.
Development of the Banyu Urip
field demonstrates how Indonesia
possesses high potential, not only
from her natural resources, but also her people.
However, this project is about more than developing the
Banyu Urip field. This project is helping to develop the
people of Indonesia, and create long-term benefits for
Indonesian people.
We are focusing our efforts on skills and knowledge
development by training and hiring nationals, including
our neighbors from around the project. We are
developing both national and local suppliers. Together
with the community, we support programs which will
enhance the quality of life where we all live and work.
During project execution, we maintain focus on
our core-values in safety, integrity, community
empowerment and environmental protection. These
values are the foundation which guides us in decisionmaking and work execution.
I am proud of our contribution to Indonesia. Today, we
celebrate our efforts in building a prosperous Indonesia.
Jon M. Gibbs
President and General Manager
ExxonMobil Indonesia
The Banyu Urip project is truly
a partnership. Throughout the
construction phase, we have
been working hand-in-hand
with many stakeholders, from
the Government of Indonesia, PT
Pertamina EP Cepu and the Cepu
Block Cooperation Body, to our
neighbors adjacent to the project.
Together, we contribute to the success of our project.
We have worked with thousands of talented Indonesians
who have dedicated their efforts for the success of this
project. They have shown their willingness to learn and
to contribute their skills, knowledge and experience to
the project.
The project is being built by five Indonesia-led
consortium companies. Together, we gain precious
experience which will be useful for projects in the future.
The consortium companies have distributed work to
other national and local companies, creating a multiplier
effect for local suppliers.
What has been most exciting for me is when I see firsthand how the project contributes to the community’s
quality of life—our neighbors now have access to a
better education in classrooms that are better suited
to educate students. Women are entrusted with micro
loans. Clean water runs to local homes. These examples
and many more have made me proud of what our
partnership has achieved.
I am honored to be part of building a strong foundation
for the future of Indonesia.
Daniel L. Wieczynski
Senior Vice President and General Manager
Mobil Cepu Ltd.
03
Foreword
Banyu Urip project in Cepu Block
is a large Indonesia’s oil and gas
development project. With peak
production of 165,000 barrel of
oil per day, this project has been
long waited to support national oil
production.
During the project, PT Pertamina
EP Cepu has been partnering with
ExxonMobil through its subsidiary, Mobil Cepu Ltd. and
Cepu Block Cooperation Body with strong work ethics,
planning, cost, procurement, operations, quality control
and safety.
During the project execution, our experts from PT
Pertamina EP Cepu are involved and collaborate with
the experts from Mobil Cepu Ltd. in every aspect, from
EPC-1 to EPC-5, Drilling, Subsurface and its supporting
works. PT Pertamina EP Cepu is also involved in
supporting Mobil Cepu Ltd. on land settlement, social
aspect, security, permits as well as regulation and policy.
The collaboration in every aspect in project execution
has facilitated a good knowledge sharing between us.
The project has also enabled the EPC contractors to
execute a big scale project with international standards.
The experience can be a benchmark which can be
applied to other similar projects in Indonesia.
I am proud that PT Pertamina EP Cepu is actively
involved in this project preparation and development. I
hope the project can support Indonesia’s energy needs.
Amril T. Mandailing
President Director
PT Pertamina EP Cepu
To participate in the Cepu Block
Cooperation Contract has made us
more appreciative that oil and gas
project is heavy on technology and
capital. The fact that the project is
onshore in a densely-populated
area has added the challenges even
more.
But we are aware; the cooperation
contract­—the first which incorporate the local
government enterprises—will benefit local people.
Because, local governments were given the opportunity
to invest and give inputs to the project. Local people
can also reap the benefits, in addition to the return from
central government.
On the other hand, I see how our community adjacent
to the project benefit from the project.
But most importantly, apart from physical development;
community’s skills and knowledge are also being
developed.
Teachers, midwives, farmers and the community
are trained and have better knowledge. It is us who
repair the road; but it is our knowledge that repairs
us. Simultaneously while the project is being built, the
community has become empowered.
I do hope that the project can be a good example to the
other project in Indonesia.
Hadi Ismoyo
Chairman
Cepu Block Cooperation Body
04
Project overview
The Banyu Urip project is the first development under the Cepu Block
Contract Area and involves the development of the Banyu Urip oil field.
The Banyu Urip field discovery was announced in April 2001 and is
estimated to contain approximately 450 million barrels of oil. At planned
peak production, Banyu Urip is expected to produce as much as 165,000
barrels of oil per day.
05
First oil production from the Banyu Urip field
initially commenced in December 2008. In
August 2009, the Early Production Facility (EPF)
was established with a production capacity of
20,000 barrel of oil per day. Recent expansions
to the EPF have now increased production to
nearly 30,000 barrels of oil per day.
Full Field Development consists of Central
Processing Facilities (CPF), onshore and
offshore pipelines and Floating Storage
and Offloading (FSO) Facility as well as the
supporting facilities. The CPF, situated about
10 km southeast of Cepu and 20 km southwest
of Bojonegoro in the center of the oil field, will
process and treat the crude oil produced.
The treated oil will be transported through a
new 20 inch pipeline to the coast of Tuban and
thereafter through a subsea pipeline to the FSO
facility, located 23 km from Tuban coastline.
06
Personal Protective Equipments are always used at project locations.
07
Health and safety
Safety is more than just a priority at the Banyu Urip project—it is a
core value and business driver, one that shapes decision-making at
every level. With a workforce drawn together from diverse cultures,
backgrounds and experience, the Project provides programs and
services to help our workforce perform in a safe and healthy manner.
The programs identify, assess and mitigate
the risks associated with our operations.
We equip workers with the knowledge and
tools to execute their work activities safely
and strive to prevent all accidents, injuries
and occupational illnesses through active
participation of all employees.
We implemented ExxonMobil's Operations
Integrity Management System (OIMS),
which guides the activities of each of
our employees as well as our third-party
contractors. It is embedded in our everyday
work processes at all levels, and we strive for
continuous improvement.
The Project’s safety philosophy is an ongoing
commitment to create a work environment
where “Nobody Gets Hurt.”
Achieved more than
million workhours with a worldclass safety results
Over
thousand
Job Safety Analysis
conducted
Over
times,
employees and
contractor workers
trained on safety
“When a friend of mine acted
carelessly, our supervisor immediately
reminded us. Initially, it annoyed
us; but then I realized that if we
keep on acting like that, we will get
injured—or worse, ‘go home with just
a name’.”
—Ahmad, local contractor
08
A glimpse of
EPC-1, EPC-5 and Drilling
The Central Processing Facilities
which being built by EPC-1
contractor can process and
produce 165.000 barrel of crude
oil per day from 3 well pads.
48 wells will be drilled from the well pads
utilizing the first two drilling rigs build in
Indonesia: Discoverer 8 and Discoverer 9. The
rigs have drilled more than 38 kilometers—
about the distance from Bojonegoro to
Cepu—with the drilled hole sizes from 60 to 15
centimeters.
Supporting facilities built by the EPC-5
contractor consist of 29 buildings, a fly-over
crossing the Bojonegoro-Cepu main road and
railroad and the water injection basin. The
basin will take its water from Bengawan Solo
in the rainy season.
drill rigs, the first
built in Indonesia are
utilized in the drilling
program
Drilled more than
kilometers, about
the distance from
Bojonegoro to Cepu
barrels
of oil per day will be
produced from
wells
drilled from
well pads
09
Central Processing Facility (CPF)
The fly-over crosses the Bojonegoro-Cepu
road and the rail road.
The first Indonesian-built drilling rigs are used
on the project's drilling campaign.
10
A glimpse of
EPC-2, EPC-3 and EPC-4
The crude oil processed in the
Central Processing Facility will
flow to Palang coast, Tuban.
EPC-2 contractor built the
72-kilometer onshore pipeline.
Four large valve stations are
placed along the 20-inch diameter
and insulated pipeline.
From Palang coast, Tuban, the pipe is
connected to another 23 kilometer offshore
pipeline that leads to the mooring tower. The
mooring tower’s 1,200 ton support structure
will be anchored into the seabed in 33 meters
of water. It has a large swiveling assembly
that includes a yoke which permits a moored
Floating Storage and Offloading vessel to
swivel or "weathervane" with shifting winds,
waves, and currents without disrupting the
flow of oil coming from the pipeline.
The Floating Storage and Offloading (FSO)
vessel will be moored to the mooring tower.
The vessel can be filled with 1.7 million barrels
of crude oil from the Central Processing
Facility through the pipeline. The vessel is
about the size of 3 soccer fields and weighing
the equivalent of 60,000 elephants.
11
Total
kilometers
of pipeline which will
deliver the crude oil from
the central processing
facility in Bojonegoro to
Tuban offshore
The Floating Storage and
Offloading facility is the
size of
soccer fields and
weighing the equivalent of
elephants
The Floating Storage and Offloading (FSO) vessel.
The onshore 72-kilometers pipeline.
The pipeline will be planted underground.
The valve station near Palang coast, Tuban.
12
Local contractors are given the
Approaching Others safety skills training.
13
Employment and training
At its peak employment, the Banyu Urip project employed more than 9,000
Indonesian workers. Almost 60 percent of that number is local workers,
especially from Bojonegoro and Tuban regions. Despite the challenge
of finding skilled workers from the regions, we were able to maximize
construction phase employment opportunities for those regions.
One of the ways to address the challenge was
to equip selected youths from our neighboring
villages to be trained and become skilled
workers. More than 1,000 youths adjacent to
our project, especially from Bojonegoro and
Tuban, were equipped with skills in welding,
plumbing, carpentry, forklift operation and
electrical installation.
To fully-operate the project in production
phase, more than 100 operations and
maintenance technicians have been trained,
establishing the future workforce for the
project. Some of them have undergone onthe-job training in our Aceh operations as
well as our operations in Angola, Cameroon,
Malaysia, Nigeria and the United States before
returning to join their fellow graduates and to
support the project.
At its peak
construction phase,
more than
national workers
are employed with
almost
%
coming from
Bojonegoro and
Tuban regions
Over
million training
hours provided to
nationals through
more than
courses
More than
thousand
attendance of national
employees and
contractors in the
trainings
“Coming from Begadon village,
Bojonegoro—I’m lucky to learn from
the best mentor; from North Aceh to
the US.”
—Erik Setiawan, trainee
14
Supplier development
The challenge for the Project is to ensure that the employment and
procurement opportunities generated by our project can help improve local
economy.
The development of reliable and competitive
supply chain can contribute to overall
efficiency of our project and operations. The
industries with the best opportunities are
those with low entry barrier and start-up costs,
such as small construction, transportation and
catering.
The project strives to optimize the use of
domestic content within the project. That
is why our Engineering, Procurement and
Construction (EPC) contractors consist of five
Indonesian-led consortium companies. At its
peak construction level, there were more than
450 national companies who supported the
consortiums as subcontractors. More than
85 percent of those national subcontractors
originate from neighboring area, especially
from Bojonegoro and Tuban.
We have worked side-by-side with them,
assisting them to enhance their engineering
services, their procurement services, and their
quality control services to help them be able to
handle a project of this magnitude, and more
importantly to work on future projects within
the country to deliver them more efficiently.
More than 150 local companies and
cooperatives from Bojonegoro have attended
the Procurement Process Familiarization
training. The training objective is to
inform local businesses about the project
procurement standards and how to get
involved in bidding process.
“I’m grateful for the project initiative
to conduct this workshop. We, local
companies, have gained knowledge
to comply with the project standard of
procedure in providing services.”
—Gunawan, Chairman of Koperasi Lima
Dua Kaliglonggong – Temlokorejo.
15
At its peak construction
phase, more than
national
companies supported the
project as subcontractors
to
Indonesian-led
EPC consortiums
More than
local companies
and cooperatives from
Bojonegoro attended
the Procurement Process
Familiarization training.
certificates and
standards need to be
complied with to perform
the project work
As part of our supplier development
initiative, local suppliers from
Bojonegoro regions participate in the
Procurement Familiarization Training.
16
Improving our
neighbors' health
One of our focuses to improve the quality of life of our neighbors is
health. Health is a basic human need. We facilitate local health providers
to be able to increase their health service.
Fact and figure
More than 100 midwives have been trained
on how to be a safe birth assistant. They
also have the knowledge about mother and
infant nutrients. With the support from local
government, the program will take part in
decreasing the number of mother-infants
mortality index.
In 2008, the project initiated a water and
sanitation program that has benefited
more than 25,000 community members
in 18 villages in Bojonegoro, Tuban and
Blora regencies. Apart from the facilities
maintenance, water fee net-margins were
contributed back to villages.
More than
midwives have been
trained on how to be
a safe birth assistant
17
More than
community members
benefited from the
water and sanitation
program
“Thanks to the program, we are no
longer having clean water shortage.
Also, we’d like to thank Ibu Surisah who
gave her land for the water installation.”
—Warjoyo, Ngimbang village, Tuban
Running clean water in our neighbor's house.
More than 25,000 community members have
benefited from the water and sanitation program.
18
Growing our
neighbors' economy
Another focus is to develop the economy of our neighbors. We
understand that health is the basis, while economy is for daily livelihood
and education is for the future of our neighbors.
The project initiated a microfinance program
for women. Many researches said that when
we invest in women, we invest in society—
women will invest their income back to their
children’s health and education.
Since 2008, the project has invested more than
Rp 4.5 billion to microfinance program. To
date, more than 10,000 women have received
up to Rp 16 billion in loans and have deposited
more than Rp 1.3 billion in funds; with an
average performing loan ratio of almost 100
percent.
More than
women have benefited
from the microfinance
program
More than
Fact and figure billion in
Rp
revolving fund have
been provided
Almost
%
of loans are fully-paid
back as per program
terms
“For me, every profit I made is a
blessing. I used a portion of it to add
my capital for the stall. I can help my
husband.”
—Parmi, Dander village, Bojonegoro
19
Weekly-meetings (minggon) are held where women
groups can pay back their loans as per program terms,
learn organizational skills and share their experiences.
20
Schoolchildren adjacent to our project now enjoy
better equipped classrooms, with an improved
teaching methods from qualified, trained teachers.
21
Developing education
We believe that students are Indonesia’s most promising resource and
the key to Indonesia’s future. Our goal is to give them the opportunity
they need to become tomorrow’s leaders.
Our endeavors in education initiatives revolve
around how we can enhance the learning
process. We have been targeting teachers and
school management to make learning a fun,
joyful and active endeavor.
Almost 3,000 teachers in Bojonegoro, Blora
and Tuban have benefited from our education
programs. These teachers are from preschools to elementary and high schools.
More than 33,000 students have been
reached by our programs. They also have
better schools now—equipped with better
classrooms, toilets with sanitation, labs and
libraries. More than 90 schools have been
refurbished.
These students are the seeds we need
to nurture in order for them to become
Indonesia’s future leaders.
More than
students
have benefited from
the enhanced learning
process
More than
schools have
been refurbished
Almost
teachers
have been trained to
enhance the students
learning process
“I want to be a governor someday. I
dream of a better Bojonegoro where
children can have a decent education. I
would like to be of service to others.”
—Siti Nur Azizah, Pungpungan village,
Bojonegoro
22
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Wisma GKBI
Jalan Jenderal Sudirman No. 28
Jakarta 10210, Indonesia
62 21 574 0707 Telephone
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