Arcandra: TEPI wants 39% interest in Mahakam block

By Bonha Ventura Sebayang

Petromindo|Lucky

Total E&P Indonesie (TEPI) has informally asked for participating interest of 39 percent in Mahakam block as part of conditions for the company to continue its role in the block after its current contract expires at the end of this year.

This was said by Deputy Minister of Energy and Mineral Resource Arcandra Tahar on Monday. But he said that the government is still waiting for a formal letter from TEPI regarding the demand. ?They asked for 39 percent, we?re waiting for formal letter (from TEPI), or their official statement. We could not yet decided,? Arcandra said.

He said that in principle, state-owned oil and gas firm PT Pertamina could share down its interest in the block, but that such decision would have to be based on a business to business negotiation between Pertamina and TEPI.

The government has decided to transfer the Mahakam block, in East Kalimantan, to Pertamina when the current contract of operator TEPI and partner Inpex Corp expires at the end of this year. Pertamina has said that it was willing to allocate up to 30 percent participating interest in the block to the current investors. TEPI and Inpex have yet to respond to the offer.

Minister of Energy and Mineral Resources Ignasius Jonan said last month that there is possibility for the current investors to have up to 39 percent of interest in the block after the current contract expires, and for TEPI to maintain operatorship status under a joint operatorship with Pertamina. Jonan said that the new offer is to help avoid production decline in Mahakam after the block is transferred to Pertamina.

Editing by Reiner Simanjuntak