Oil & Gas Upstream Business Update American Association Petroleum Geologist UGM - Student Chapter Dr. A Rinto Pudyantoro., MM., Ak., CA. Yogyakarta, 27 August 2017

Oil reserves-to-production (R/P) ratios Years 2016 by region History BP Statistical Review of World Energy 2017 © BP p.l.c. 2017

Gas reserves-to-production (R/P) ratios Years 2016 by region History BP Statistical Review of World Energy 2017 © BP p.l.c. 2017

Oil Supply & Demand

Unconventional 54 Blocks Oil & Gas Bloks Managed by SKK Migas Status per 30 Juni 2017 277 Blocks EXSPLOITATION 85 Blocks Production : 71 Blocks Development : 14 Blocks EXSPLORATION 138 Blocks Active : 98 Blocks ONSHORE 151 Blocks Process Termination : 40 Blocks OFFSHORE 91 Blocks Unconventional 54 Blocks Active : 48 Blocks ONSHORE/ OFFSHORE 35 Blocks Process Termination : 6 Blocks

Oil & Gas OVERVIEW PROFIL LIFTING Actual & Forecast Gas Dominated Start 2004

FORECAST (2017 – 2050) OIL (Existing + POD + EOR)

FORECAST (2017 – 2050) GAS (Existing + POD) TANGGUH TR.III MASELA

PROYEK UTAMA HULU MIGAS S/D 2025 JANGKRIK BADIK & WEST BADIK IDD ANDE ANDE LUMUT Tahap Konstruksi Produksi (Q2-2017): 450 MMscfd, 200 bopd Tahap Tender EPC Produksi (Q3-2020): 60 MMscfd, 3000 bopd BANGKA : Telah Onstream 115 MMscfd, 4000 bopd (Agt-2016) GENDALO-GEHEM: Tahap Revisi POD-1 Gendalo Hub: 700 MMscfd, 20000 (Q4-2022)* Gehem Hub : 420 MMscfd, 27000 (Q2-2023)* Tahap Tender EPC Produksi (Q1-2021) : 20000 bopd BISON-IGUANA- GAJAH PUTERI Tahap Tender EPC Produksi (Q3-2019): BISON: 45 MMscfd, IGUANA: 45 MMscfd GAJAH PUTERI: 73 MMscfd MATINDOK Tahap Konstruksi Sudah onstream April’17 65 MMscfd TANGGUH TRAIN-3 ACEH Tahap Konstruksi - site preparation Produksi (Q2-2020): 3,8 MTPA (700 MMscfd), 3200 bopd SUMATERA UTARA KEP. RIAU JAMBU AYE UTARA SUMATERA TENGAH Tahap Persiapan Tender FEED Produksi (Q2-2022): 108 MMscfd, 3300 bopd KALIMANTAN TIMUR SULAWESI TENGAH SUMATERA SELATAN PAPUA BARAT L-PARIGI (Platform) SULAWESI SELATAN LAMPUNG MALUKU Tahap Tender FEED Produksi (Q4-2020) 60 MMscfd WASAMBO JAWA BARAT Tahap Konstruksi Produksi (Q2-2018): 70 MMscfd JAWA TIMUR JAMBARAN TIUNG BIRU MADURA BD ABADI Tahap Konstruksi Pembahasan Harga Gas Produksi (2020) 330 MMscfd MDA dan MBH Tahap Konstruksi Produksi (Q2-2017): 6600 bopd, 110 MMscfd, Tahap Konstruksi Produksi (Q1-2019): 175 MMscfd Tahap Revisi POD-1 Mulai Produksi & Kapasitas (TBD)* Status per 31 Mei 2017

Resources & Reserve Status 1.1.2016 Challenges and Opportunities Oil (Billion barrel) Gas (Trillion cu-ft) in BBOE Cumulative Production = 41.2 26.1 Petroleum In Place (3P) 136.8 BBOE Proven (P1) = 20.1 3.3 3.9 Cadangan Potensial (P2 + P3) = 11.0 90.5 Contingent Sub Commercials Unrecoverable = 69.6 55.0 101.2* 42.8 Need Intensive Exploration & Investment 87.3 Resources (P50) 84.4 BBOE Undiscovered Initially In Place Unrecoverable = 84.4 Cadangan terbukti Minyak kita di awal tahun 2016 (1.1.2016) adalah sebesar 3.3 BBO, turun 11% dari awal tahun 2015 (1.1.2015 ~ 3.7 BBO) Cadangan Gas relative stabil, sebesar 100 TCF, namun perlu diingat, hampir setengahnya adalah Sumberdaya gas di Natuna D-Aplha (46 TCF, setelah dikurangi impurities). Potential Resources: 84.4 Resources & Reserve Status 1.1.2016 * include gas from ex D-Alpha 46TCF Need Technology to increase production and in the same time reduced cost

Several Issues Impact to Investment Decision Data Smaller Discovery Size Higher Finding cost Failed Recent Expl Campaign in new target Geology synchronizing regulation Formalities Social cost PP 79/2010 (updated Revised by PP27/2017) Regulation & Socials Fiscal Company Class Tax Issues (Assumed & Discharged) Mixed up of contractual and taxation Mone tization Lead Time (discovery-1st onstream) Decision delay Goverment Share Term Procedure of POD

Non Technical Issues Sumber: Fraser Institute, 2016

Declining Exploration Impact to Exploration Activities Declining Exploration Pengeboran Sumur Eksplorasi Success Ratio Wildcat

Impact to Block Awards Penurunan Jumlah Award WK

EXPLORATION & SUSTAINABILITY OF PRODUCTION CLOSING REMARK: EXPLORATION & SUSTAINABILITY OF PRODUCTION The Challenges Socio-Political Regulatory Regional permits Need regulations more Compact, etc. Requirement to full fill the national energy Ideally RRR is more than 100% (or RRR > 1), therefore increasing production and reserves is a must: Need more investment & exploration Increasing the national capacity Involve direct and indirect to local economy Efficiency of operation Demanding more national interests Inc. Rev. from O&G Technical Economic Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts: · The concept of 'needs', in particular, the essential needs of the world's poor, to which overriding priority should be given; and · The idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs. — World Commission on Environment and Development, Our Common Future (1987 Moving to Eastern Indonesia Lack of infrastructure More difficult Maintaining Contractor Profitability Domestic gas price issue