SPE 157271

Challenges of Oil and Gas E&P Operations in Environmentally & Socially

Sensitive Area: Lessons Learned from Mahakam
Gayatri ASMARADEWI, Juli RUSJANTO, Benyamin ARGUBIE, Total E&P Indonesie

Copyright 2012, SPE/APPEA International Conference on Health, Safety, and Environment in Oil and Gas Exploration and Production

This paper was prepared for presentation at the SPE/APPEA International Conference on Health, Safety, and Environment in Oil and Gas Exploration and Production held in Perth, Australia,
1113 September 2012.

This paper was selected for presentation by an SPE/APPEA program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not
been reviewed by the Society of Petroleum Engineers or the Australian Petroleum Production & Exploration Association Limited and are subject to correction by the author(s). The material does
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acknowledgment of SPE copyright.

Abstract
Total E&P Indonesie (TEPI) has been operating for more than 40 years in Mahakam Contract Area located at Mahakam Delta,
Kutai Kartanegara District, East Kalimantan Province, Indonesia, despite the local environmental and social challenges.
Mahakam Delta was initially covered with dense and diverse mangrove forests. The delta is ecologically and economically
important for nursery & spawning ground of fish and shrimps and hence for supporting the livelihood of local communities
from fishing activities. However in the last decades there has been a marked increase of local population activities and
degradation of mangrove ecosystem due to the extensive use of natural resources resulting in the deforestation of mangrove.
Despite the growing complexity of oil and gas operations along with more mature oil and gas fields, TEPI is consistently
committed to protect the environment and to live in harmony with surrounding communities as its paramount priorities.
Successful oil and gas E&P operations in such environmentally and socially sensitive area require careful and intensive
approach to minimize impacts to surrounding environment as well as to surrounding communities. This involves
comprehensive environment and social baseline assessment and impact assessment studies, best practice in environment
management for effective impacts reduction and mitigations, effective environment monitoring, intensive coordination with
local authorities and socialization to local communities to obtain legal and public approval, acceptance, and support for the
operations from the very beginning phase of operations planning until after the completion of the operations.
This paper highlights the key lessons learned from the case study of Total E&P Indonesie (TEPI) operations in the
environmentally and socially sensitive area of Mahakam Delta.

Introduction

Total E&P Indonesie (TEPI) subsidiary of TOTAL Exploration and Production

and Production Sharing Contractor under supervision of State Agency BPMIGAS TUNU
(Executive Agency for Upstream Oil and Gas Business) has been actively TAMBORA
engaged in oil and gas exploration and production operations for more than 40
years as operator of Mahakam Block (Mahakam PSC). The Mahakam Block
consist of several oil and gas fields located in Mahakam Delta, East Kalimantan: HANDIL

Handil oil field located in southern part of Mahakam Delta, Tambora oil field
located in upstream of the Mahakam Delta, and Tunu gas field located in eastern SISI NUBI
-
SENIPAH
part of Mahakam Delta. Other oil and gas fields in Mahakam Block are located
offshore, i.e. Bekapai oil field, Peciko gas field, Sisi Nubi gas field, and newly BEKAPAI
developed South Mahakam gas field (Figure 1). BALIKPAPAN

PECIKO
SOUTH MHK
Mahakam Delta: Environmentally & Socially Sensitive Area
The Makaham Delta forms a classical fan-shaped mosaic of channels and islands 0 10 20 km

Gas Field
extending into the Makassar Strait, as shown on Figure 1. The total surface area is Oil Field

approximately 5,000 sq km and includes an intertidal floodplain of 1,300 sq km Future Gas Field

on which mangrove forests occur, a prodelta of 2,700 sq km and a delta front of Figure 1. TEPI operations in Mahakam Delta
2 SPE 157271

1,000 sq km, the highest parts of which are exposed at low tide. Administratively, it is located in the regency of Kutai
Kartanegara, East Kalimantan Province. It is a unique and vulnerable ecosystem with high economical and ecological
function. It was originally covered by dense mangrove vegetation. The vegetation is submitted to a marked zonation from the
upstream part of the delta to the downstream part: fresh water forest, low salinity mangrove, Nypa, and coastal mangrove
fringe (Avicenia, Sonneratia, Rhizopora)1). Water condition ranges from fresh in the upstream, brackish in the intertidal zone
and saline in the outer part of the Delta. Subjected to two major natural physical constraints from the river and from the sea,
the delta become enriched with many varieties of fish and shrimps, which use the mangrove ecosystem as their nursing,
seeding, spawning, and feeding grounds. The mangrove ecosystem also provides stabilization and protection of shore lines
against erosion and abrasion.
The huge resources of Mahakam Delta have invited many people to come and live in the delta for fishing and shrimp
farming at coastal zones. Some of them are residing in the area while the others are working only in the Delta and residing
outside the Delta. The main commercial products are Tiger prawn, Banana prawn, snapper, pomfret, grouper, and milk fish.
Fishermen use two main types of fishing gears, active fishing gears and passive fishing gears. Many kinds of active fishing
gears are used, such as trammel net, gill net, trawl, and many kind of passive fishing gear as well such juluk , rompong,
rakkang, belat, etc. Small motorized boats are the main transportation means for the fishermen. The main fishing grounds are
located within 1 4 nautical miles from the coast, with depth of water between 2 10 meters.

Figure 2. Fishery activity in Mahakam Delta

As an ecotone ecosystem, where land and sea ecosystem meet, Mahakam Delta is always in a dynamic condition, full of
changes with very short time cycles. In a normal condition, the dynamics is in a balanced condition (equilibrium). When
there is damage, the negative impacts will soon give a very big and complex influence, even if not controlled it may be almost
irreversible.
Some major problems being faced and demand serious attention to overcome them, among others3):
1. Ecosystem and Natural Resources Degradation
Mahakam Delta has been subject to intense deforestation between the period of early 1990s and 2000s mainly due to
development of shrimp ponds. The shrimp ponds are located not only in external part of the delta where the salinity is high,
but also extended to low salinity area i.e. central part of the delta. The rapid conversion of mangrove vegetation reached its
peak in 1997 when financial crisis hit Indonesia and the export price of shrimp increased significantly. Since more than 25
years TOTAL has been monitoring the variations of vegetation coverage of the delta with satellite images integrated in GIS
(Geographical Information System). In 2001, around 750 sq km of Mahakam Delta area which corresponds to 73% of the total
surface of the delta has been deforested1). However, period of the productivity was very short (about 5 years) compared to the
impact on the environmental damage. Currently, local populations are facing natural resources and ecosystem degradation
problems such as degradation of water quality, increasing occurrence of shrimp diseases, increasing abrasion of coastline and
river banks, loss of biological habitats, soil losses, and declines of shrimp and fish productivity.

Deforested Areas

1000
800
600
Km2

400
200

0
1980 1986 1992 1996 1998 1999 2001

Tambak 0 3 30 137 387 564 748

Figure 3. Mangrove ecosystem extensive conversion to shrimp ponds at Mahakam Delta

SPE 157271 3

Figure 4. Satellite image of Mahakam Delta, left: Spot 1986 showing intact mangrove ecosystem shown in red colour; right: Spot 2009
showing most of the Mahakam Delta area has been converted to shrimp ponds shown in blue colour.

2. Spatial utilization conflicts

Spatial utilization conflicts in Mahakam Delta area develops because there is no Mahakam Delta zonation as a strategic area of
Kutai Kartanegara Regency and also East Kalimantan Province as directed in Act No. 26 / 2007 on Zonation, and Act No. 27 /
2007 on Coastal Area and Small Island Management which has become a legal basis which regulates the utilization of
Mahakam Delta. Zonation arrangement by the government which has not been definitive yet can be interpreted as justification
for anyone to utilize any space on behalf of economic activities. Debates whether it is allowed or not allowed to utilize
Mahakam Delta area have not been responded yet by the administrative authority to enforce sanctions to the users without
adequate documents.

3. Population and Settlement Pressure

According to the population data obtained from 5 subdistricts in Mahakam Delta, the population has increased sharply,
particularly in the last decade, not because of birth but incoming migrants. The increase in population consequently will be
followed by the increase of living needs, resulting in pressure and changes to the environment (Table 1).

Table 1. Population Increase in Mahakam Delta Subdistricts for the Last 3 Decades (1990-2008)
No. Subdistrict Population Growth Villages in Mahakam Delta
1980 1990 2000 2008
1. Samboja 22.294 30.944 35.944 51.336 Muara Sembilang
2. Muara Jawa 11.429 16.692 19.995 28.359 Muara Kembang,Taman Pole, Dondang,
Muara Jawa Ilir, Muara Jawa Tengah,
Muara Jawa Ulu.
3. Sanga-Sanga 9.893 10.318 11.294 15.016 Sanga-sanga Muara, Pendingin
4. Anggana 10.521 12.884 18.372 28.756 Tani Baru, Kutai Lama, Muara Pantuan,
Anggana, Sepatin, Sungai Meriam,
Handil Terusan
5. Muara Badak 12.583 20.793 26.450 37.583 Seliki, Muara Badak Ulu, Muara Badak
Ilir, Salopalai
Source: Kutai Kartanegara Regency in Number (2009)

4. Weak Institution and Management

The view that areas like Mahakam Delta are common property resources, makes the applied values or ethics difficult to
harmonize without intervention by the authorities. An appropriate institution for an integrated and sustainable management
efforts is not available yet for Mahakam Delta. Such institution is necessary in order to prevent domination and justify all
means. The institution shall be assigned to handle or manage Mahakam Delta sustainable development, both in the form of an
organization or regulation and policy.
4 SPE 157271

The identification and analysis of the stakeholders is very important in the framework of institution and governance
designing /re-designing (including work arrangement relations) that is more accurate as per requirements of Mahakam Delta.
Below is some description about the stakeholders in Mahakam Delta.

Table 2. Macro Identification of Stakeholders and their Interests and Influence on Mahakam Delta

No. Stakeholders/ Interrelation

Existing Institutions
1. National Government (thru
various Ministries and National
Technical Implementation Units
in the Region)
2. East Kalimantan Province
Government (and related local
apparatus unit or SKPD and
technical implementation unit or
UPT)
3. Kutai Kartanegara Regency
Government (and related SKPD
& UPTD)
4. National & multinational
companies (in mining, energy)
and renewable natural resources
5. Community (group or individu)
6. Non Government Organization
(NGO)
7. Universities and Research
Institutions
8. International Program/Project
Interest
among others:
Smooth flow of investments & state revenues;
Biological diversity conservation as State
assets and better global image
Social and security stability for economic
development acceleration
among others:
Handling or at least inter-regency/city
coordination from upstream until downstream
(Mahakam watershed)
Safeguarding the coastal resources asset as
regional revenues
Implementing decentralization &
deconcentration policies, particularly
conservation aspect is under national
government jurisdiction.
among others:
Empowering Mahakam Delta as resources in
their administrative region
Guiding (and supervising) of economic
activities, particularly conducted by the
community members;
Several activities become potential local
revenues for the local government.
among others:
Security, sustainability of business and getting
maximum profits from Delta natural resources
utilization
Political, legal and economic certainty in
conducting business in the regions.
among others:
Maintaining life and & living existence in the
delta area;
Improving the social and economic life level
among others:
Continuation of natural resources and
environmental functions and benefits;
Just distribution of natural resources,
particularly at grassroot level;
Conveying political message to the decision
makers in the national and regional
governments.
among others:
Availability of environmental & social research
facilities for scientific advancement;
Valid inputs are produced for political decision
making, technical planning and scientific
references
among others:
Success of program/project purpose and target
as established/ agreed;
Concrete results can be enjoyed and become
a program/project performace proof
Influence
among others:
Availability of National strategic area planning;
Restriction of permits (peraticularly large
scale);
Availability of norms, standards, guidance,
crtiteria;
Discipline & compliance with the law by
businessmen and delta users.
among others:
Harmonization of relations amongst
government and sectoral levels of national and
regional governments;
Conservation of natural resources and
sustainability of functions and benefits of inter-
administrative regions.
among others:
Increase/restriction of investment as per
district authority
Population management and restriction,
particularly newcomers from outside
Security and orderliness of the community as
district residents;
safeguarding and sustainability of natural
resources functions and benefits in the delta
among others:
Social equilibrium and socio-economic growth
in the work area
Biophysical & social impacts in the working
and neighbouring settlement areas
among others:
Area security and orderliness, for economic
activities in particular;
Improvement or decline of environmental
quality
among others:
Area security and orderliness, for socio-
economic activities in particular;
Consistent environmental conservation efforts;
Changes in natural resources and social
management policies in the delta area
among others:
Political decision or more objective policies on
delta management as well as rationable and
acceptable by all parties
among others:
Growth of stakeholders inspiration in a better
delta management or utilization;
Empowerment and development of project
targets stakeholders

Over 4 Decades of E&P Operations in Mahakam Delta

Since 1970, TEPI has undertaken its exploration and production operations with Japanese company JAPEX (now INPEX) as
operator of Mahakam Block (Mahakam PSC). Following the discoveries of Bekapai oil field in 1972 and Handil oil field in
SPE 157271 5

1974, gas fields has also been discovered the giant Tunu field in 1977, Tambora in 1980, Peciko in 1983, Sisi field in 1986,
Nubi field in 1992 and South Mahakam in 1996. Until now, more than 1300 wells have been drilled, with more than 1200 km
oil and gas pipeline, 20 offshore production platforms, 39 GTSs (Gathering and Testing Satellites) swamp platforms, gas
processing capacity of 3,000 MMscfd, and an oil tanker Single Buoy Marine (SBM) loading facility. There are four main
processing areas located in Mahakam Delta: Handil Central Processing Area, Tambora and Tunu Central Processing Unit,
Tunu North Processing Unit, and Tunu South Processing Unit. Production peak was reached in 2005 with daily production rate
of 624,063 boepd including 2,908 MMscfd of gas. TEPI is until now the biggest gas producer in Indonesia, contributing to
around 1/3rd of gas production of Indonesia and more than 80% gas supply to Bontang LNG.
The main production of TEPI in Mahakam Delta comes from Tunu Field which is a gas-producing field. The field is
located along eastern part of the delta, where the human activities are mostly concentrated, i.e. local community settlements as
well as fishing and aquaculture activities. The distance between production facility and nearest village can be as close as 400
m as the case of Tunu North Processing Unit. In Tunu field, most of swamp platforms (GTSs) and pipelines are located side
by side with shrimp ponds.
As the oil and gas fields become more mature, newer and more efficient technologies are being exploited to maintain oil
and gas production. Beside operating more complex production processing facilities, in the recent years operations become
more complex with several seismic projects covering area between 90 590 km2, increasing field development projects,
drilling of more than 100 wells per year with 7-9 drilling rigs, pipelines and river crossings repairs, ~ 9,000 operations of well
service intervention per year, marine operation with ~ 400 boats, continuous dredging operations with ~10 crane barges as well
as other supporting activities.
Because most of the operating areas are in the most sensitive area of the delta, TEPI has to integrate issues of sustainability
of mangrove ecosystem and local community livelihood in Mahakam Delta in the environmental management system of its
exploration and production operation.

Environment Management of E&P Operations

Realizing the challenges of exploration and production operations in such environment and social sensitivite area of Mahakam
Delta, TEPI has been continuously managing its exploration and production operations with three main approachs in line with
TOTAL Group policy for Sustainable Development5):
1. Controlling and minimizing impacts of oil and gas operations to environment
2. Contributing in social and economic development of local communities
3. Anticipating future needs
Commitments for environment protection is stated in the Principle 5 of the TOTAL Direction General Exploration &
Production HSE Policy (MAESTRO: Management And Expectations Standards Toward Robust Operations) 6), which is
cascaded into HSE Policy Statement in TEPI level, stating Companys commitments for regulation compliance, pollution
prevention, minimization of waste and emission, natural resource conservation, energy saving and continuous improvement7).
All TEPIs sites also implements Environment Management System ISO 14001 which is integrated in the Companys HSE
Management System in order to ensure that their operations remain environmentally sound. This has been necessary in order
to minimize the impact of the operation and to ensure protection of the environment, both in the short and long term. The
Environmental Management System continues to indicate whether TEPIs operation is complying with the required
governmental regulations, and whether the operation is causing any significant impact to the environment. In addition,
environmental audits are performed regularly by internal and external audit teams, including authorities, providing another
source of feedback concerning TEPIs environmental management programs.

Comprehensive environment and social baseline assessment and impact assessment studies
Comprehensive environment and social baseline assessment and impact assessment studies are conducted following national
regulation requirements as well as Group requirement.
The national regulations concerning environmental impact assessment requires that Environment Impact Analysis study
(hereinafter called AMDAL) shall be carried out for any planned activities with substantial impacts, while for other activities
not affecting substantially the environment, Environment Management Program and Environment Monitoring Program
(hereinafter called UKL UPL) shall be carried out. Those studies are required for decision making of the operation of the
planned activities. Approval of the study document by proper level of authority is required to obtain environment permit,
which becomes the requirement for securing the activity license.
The legal framework for environmental impact analysis has been exist since as early as 1986 (Government Regulation No.
29/1986), which is revised in 1999 (Government Regulation No. 27/1999), however the application of environment permit for
decision making process and as requirement to obtain business/activity license was only introduced after issuance of
Environment Management and Protection Law in 2009 (Law No.32/2009), which is recently followed by the issuance of
Government Regulation No.27/2012 concerning Environmental Permit. Other regulations for environmental impact analysis
include Ministry of Environment Regulation No.13/2010 concerning Environment Management Effort and Environment
Monitoring Effort, Ministry of Environment Regulation No.14/2010 concerning Document of Environment Evaluation and
Document of Environment Management, Ministry of Environment Regulation No.5/2012 concerning List of Activities
6 SPE 157271

requiring EIA. Several other Ministry regulations are currently being formulated by Ministry of Environment and expected to
be issued within this coming years.
While following Group requirement, Environmental & Social Base line Study (ESBS) and Environmental & Social Impact
Assessment (ESIA) is also systematically carried out for any planned activity (seismic, drilling, pipeline installation, oil and
gas producing platforms installation, dredging). ESBS is carried out on every new site prior to the commencement of any
planned activity. This study determines the initial environmental status of the site, the existence of any ecologically sensitive
zones, and any pre-existing deterioration. The systematic use of aerial photography and on site baseline surveys allows the
identification of sensitive areas that need to be protected. A similar study is performed during monitoring phase and also
planned for the final abandonment stage. Systematically during the early stage of any new planned activity, ESIA study is
carried-out with the aim of minimizing the footprint of projects. This study identifies any significant impact of future
activities on the environment and defines a set of risk-reducing measures, based on thorough analysis and good scientific
methodology. Mitigation measures are taken to limit and control any significant impact on the environment created by TEPI's
activities.
All the commitments for mitigating and reducing the impacts as required by AMDAL, UKL UPL, and ESIA studies are
summarized in Commitment Matrix which aid for for effective implementation of impact reductions & mitigations measures
by all level of organizations, including contractors, during all life-cycle of the project: pre-construction phase, construction
phase, operational phase, until post-operational phase.

Best practice in environment management for effective impacts reduction and mitigations
The potential impacts from oil and gas exploration and production to environment can be created through the following
sources and mechanisms:
Land /shrimp ponds/static fishing gears acquisition acquisition for development of new oil and gas production
facilities
Land clearing and dredging activities for site preparation
Effluent discharges (produced water, drainage, domestic wastewaters)
Domestic & industrial waste
Air emissions, noise, light nuisance
Transportation activities (marine, land, air transport)
Emergency accidents and spills
Several examples of best practices which have been implemented to minimize impact to surrounding environment and social
communities are discussed below:
1. Surface location selection: minimizing land acquisition, dredging & land clearing
The surface location of new oil and gas production facilities (GTSs, remote wellhead platforms,..) is selected whenever
possible near existing facilities in order to minimize land acquisition, dredging and land clearing. Review of alternative
locations is made in order to select the most acceptable alternative with minimum impact to environment. The examples are
the installation of new pipeline in existing Right of Way, optimize the maximum use of existing well slots in platforms or
installation of new adjacent wellhead platform instead of installing new platform. If installation of new wellhead platform can
not be avoided, than the new remote well head platforms is connected to existing facilities. In addition, dredging area at GTS
construction area / river crossing / shoreline crossing and vegetation clearing is optimized only to fulfill safety requirement
(safety distance). The vegetation waste materials are managed, and site clearing activities are conducted as such so that the
natural drainage to surrounding mangrove vegetation is not disturbed.
2. Reinstatement of riverbanks & cleared area
Impact from dredging and land clearing is also minimized by stabilizing the riverbanks using shoreline protection and/or by
replanting the riverbanks with mangrove to avoid abrasion. As part of commitment for Mahakam Delta mangrove ecosystem
protection, since year 2000 TEPI has conducted mangrove replanting programs at pipeline Right of Ways and at buffer zones
of oil and gas production facilities. Mangrove replanting also performed wherever possible at project area with suitable
mangrove vegetation, without disturbing the production facilities, environment or community at the vicinity of project area.
Until now, more than 10.6 million mangrove seeds have been planted covering area more than 2,600 hectares.

Figure 5. Mangrove replantation at Pipeline Right of Ways in vicinity of shrimp ponds at Mahakam Delta.
SPE 157271 7

The mangrove replanting is conducted by involving local communities for seedling provisions, replanting operations, as well
as monitoring after replanting to ensure success growth rate is achieved. Since the past few years, the mangrove replanting
program has also been extended to replanting on riverbanks or surrounding local community premises (shrimp ponds area) as
part of community development program to facilitate shrimp farmers to manage their shrimp ponds in environmentally
friendly and sustainable way through silvofishery method. The mangrove replanting program is continued now with the
target of replanting 1 million mangroves annually. Through this program, the Company contributes to promotion of
environmental awareness to local communities on the ecological problems occurred in Mahakam Delta. Through participating
in those programs, the local communities have gained knowledge on the methods of sustainable management of shrimp culture
activities as well as methods of mangrove preservations.
3. Minimization of impacts from construction activities
Socialization to local communities is performed prior dredging in vicinity of shrimp farming or fishing activity. The dredging
operation is also adjusted with the period of shrimp pond owners opening the water intake for their shrimp ponds.
Representative of local villagers is appointed to facilitate coordination of dredging activity with Company.
The dredged material is contained by barge to prevent spills. Wherever technically possible considering the current condition,
turbidity curtain booms are deployed to limit the turbidity in surrounding waters. Monitoring of water quality is performed
before, during, and after dredging activity, if necessary witnessed by local authorities and local communities.
The construction activities are performed as such to avoid disturbance to existing hydrological patterns, especially not
disturbing natural drainage used by shrimp ponds. If unavoidable, relocated of shrimp pond water gate to the nearest water
source is conducted to avoid the disturbance to shrimp ponds activities.
4. Minimization of impacts from drilling activities
Minimization of impacts from drilling activities is conducted by implementing drill cuttings waste management strategy by
using thermal desorption technology. Drill cuttings from rigs operating at Mahakam Delta area are collected and transferred to
Thermal Desorption Unit which allows reduction of oil content on cuttings from around 20 wt% to an average of 0.3 wt%, and
allows as well efficient recovery and reuse of base oil. The post treated cuttings are disposed in non-sensitive offshore
location outside Mahakam Delta in compliance with drilling waste management regulation. Potential reuse of post treated
cuttings for alternative uses such as road base and backfill material is currently being studied8).
Beside the above effort, drilling fluids and chemical additives are also selected taking ecotoxicity criteria into account.
5. Minimization of impact from production activities
Minimization of impact from production activities is performed through:
efficient operation of treatment and discharge of produced water, drainage, domestic wastewater
control of emission: during normal condition, flared gas is only pilot and purge gas which are required for safety purposes
(to burn the gas in case of shutdown/depressurization), minimization of flaring through optimization of production process
and minimizing process/GTS shutdowns and optimize time required for planned shutdown (preventive maintenance),
optimize shutdown period for simultaneous jobs for reducing shutdown frequency
integrated waste management strategy prioritizing Reduce, Reuse, and Recovery principles
management of chemicals from their selection by taking ecotoxicity criteria into account, proper handling, storage,
transfers, and utilization of chemicals.
Water conservation efforts by limitation of fresh water consumption and recovery of rainwater
Control of noise by taking into account the noise level during the design process and performing periodic maintenance of
engines based on maintenance procedures
Control of the integrity of installation to prevent and limit leakage

Effective environmental monitoring

During implementation phase, significant environmental impact factors (e.g. emissions to the atmosphere, discharges into
water, domestic and industrial wastes production, use of chemicals, use of energy and natural resources, noise, odor) are
regularly monitored, and the results recorded and reported. These measurements are done in accordance with specific
procedures and applicable regulations.
Monitoring and evaluation of implementation of commitments defined previously in AMDAL and ESIA documents is
regularly performed to verify impact prediction and ensure that mitigation measures have been properly implemented and are
effective to minimize the impact to environment.
Environmental data is monitored using GIS for better planning of operational activities and monitoring as well as
evaluation of environmental impacts.

Integrated approach for managing societal issues

Intensive coordination & socialization with local authorities and other stakeholders
Engaging potentially affected stakeholders in consultation and participation in decision making is essential to smooth project
execution in sensitive environments. Transparency in dealing with governments and local communities has been
effective to achieve obtain legal and public approval, acceptance, and support.
8 SPE 157271

Intensive coordination and socialization with local authorities and other stakeholders is conducted started from early phase
of projects as part of consultation and permitting process required by AMDAL and ESIA studies. Socialization of activity
plan to local community is conducted in coordination with the relevant elements from local government. For instance,
socialization to fishermen always conducted in coordination with local Marine & Fisheries Affairs Offices.
For projects with significant scale and duration, MoU (Memorandum of Understanding) scheme involving all stakeholders
is applied for efficient coordination among all stakeholders. A dedicated local community representative is appointed as
Regional Coordinator and assigned to coordinate and settle societal issues related with project. The representative usually is
selected from prominent leader from the local community. This scheme has been proven to be effective and efficient for
managing societal issues related with project activities.
Before the project activity started, scouting trips are also organized to make inventory of any local communitys activity
around project location which requires to be compensated in case of any disturbance, such as shrimp ponds, fish traps, etc.
This activity is conducted together with the elements from local governments, Regional Coordinator, and representatives of
fishermen. The mechanism for compensation scheme and value in case of any disturbance to fishing activity is based on
official agreements established by local government as reference.
Local communities involvement is not only at the beginning phase of E&P operations but also extended to the
implementation phase and continued until the completion of operations. Due to this direct involvement, the local
communities have better knowledge about the oil and gas operations. The other advantage from their participation is the
improvement of communication between oil and gas company with the local communities which aids into smooth operations
of oil and gas activity.

Contributing in sustainable social and economic development of local communities

As part of TEPIs commitment for sustainable development, corporate social responsibility (CSR) programs have been
performed with 5 main focuses: 1. Education and research, 2. Health and Nutrition, 3. Community economic empowerment
and capacity building, 4. Environment and alternative energy, 5. TEPI foundation for preservation of local culture.
Currently, there are 99,935 inhabitants live in surrounding TEPI operation area, and TEPIs CSR programs have benefited
177,425 people. In implementing CSR programs, integrated approach of partnership between Academic, Company,
Government, and public sector is implemented to meet the objective of community self-sufficiency and sustainability.
As part of its CSR programs, the Company also contributes for integrated and sustainable management of Mahakam Delta
through Save the Mahakam Delta Program, in cooperation with central and local governments as well as other stakeholders
(legislatives, industries, media, scientists, public, non governmental organizations). The program aims at creating a
concerted effort to tackle various challenges from different aspects such as ecological and technical, socio economic and
institutional setting as follows:
Ecological-Technical: Choosing the most appropriate technology methods on rehabilitating the ecosystem of Mahakam
Delta
Socio Economic: Implementing socio economic strategy on rehabilitating the environment such as providing access of
alternative income for the community
Institutional Setting: Setting up the related institutions to the existing regulations (socialization, dissemination and
implementation of the existing law), its role and function and also coordination between stakeholders for the program
sustainability.
Long term program is aimed at developing various initiatives for Mahakam Delta management program which corresponds
to two basic matters i.e.: (1) need to maintain and keep the vulnerable delta natural resources such as estuary areas, mangrove
forests, landscapes and esthetic values, also coastal biological components such as fish resources, mangroves etc; and (2)
needs for managing the delta natural resource utilization rationally, seeking resolution for the utilization conflicts, in order to
achieve balance or rationalization between development needs and demand for environmental conservation. Mahakam Delta
as as a strategic area must be managed in an integrated manner, consequently at least 3 (three) approaches are required: (1)
deeper and full attention and understanding on typical natural resource elements of the delta; (2) optimum utilization of natural
resources dominating Mahakam Delta, by integrating entire ecological, socio-cultural, and economic information; and (3)
enhancing cooperation, consultation and coordination among sectors and among stakeholders in dealing with the problems
existing in Mahakam Delta.
The company is also contributing to economic development of local community through creation of work opportunities.
The use of local man-power to work in the company is prioritized as long as they fulfill the qualification and based on the
needs of company. The increase of work opportunity is also coordinated with local government. The company also gives
opportunity for local contractors to participate in the tender process as long as they fulfill qualifications, supported with local
community empowerment programs such as socialization and training to local contractors so that they can fulfill the criteria
required. The development of alternative business development is also integrated into the community development programs.
Social mapping is also conducted following the integrated methodology developed by Total for risk assessment and
evaluation tools i.e. Stakeholder Relationship Management (SRM). An SRM study which has been conducted for Mahakam
Delta with participation of local government and other stakeholders has shown very valuable results in streamlining
participatory planning in managament and development of Mahakam Delta. Through this study, societal issues which needs to
be prioritized to be solved and main local communities needs are revealed, and becoming inputs for the Company in
SPE 157271 9

synergizing the strategic planning of Companys CSR programs with the strategic planning of local region development by
considering similar perceptions of all relevant stakeholders about vision for sustainable development of Mahakam Delta9).
The main challenges of CSR programs which need to be overcome by TEPI are to adapt its CSR programs to the growth of
the country and East Kalimantan region, to develop common programs with the state and the local government, and to give the
communities the ownership of the programs. In response to the challenges, the TEPI employs an integrated approach of
partnership between Academic, Total as the Business, and Government, plus Public Sector to meet the objective of community
self-sufficiency and sustainability. TEPI also has prolonged vision and planning for its CSR activities through the long term
CSR plan for 25 years developed since 200910).

Claims and disputes management

Societal claims and disputes are managed with local government involvement as mediator through intensive coordination and
discussion process, supported with involvement of experts from local universities when necessary. This approach has shown
positive results in managing and solving societal claims and disputes.

Conclusion
Succesful oil and gas exploration and production operations in environmentally and socially sensitive area require careful and
intensive approach to minimize impacts to surrounding environment as well as to surrounding communities. The actions
taken to control and minimize impacts of oil and gas exploration and production operations to environment and to manage
societal issues have shown positive results in minimizing the footprint of exploration and production operations and to
make a positive contribution in environmental and social areas. Results of monitoring and evaluation process have so far
led to the conclusion that, after more than 40 years of operations, there has been no significant adverse impact on the
mangrove ecosystem caused by the Companys exploration and production activities. The Company also continues to
contribute to sustainable development of Mahakam Delta by working together with authorities and related stakeholders for
protecting the environment and empower local community.

Acknowledgements
The authors wish to gratefully acknowledge Total DGEP/HSE and management of Total E&P Indonesie for permission,
encouragement and support in publishing this paper.

References
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