BPMIGAS has submitted recommendation over Mahakam contract

By Godang Sitompul

Upstream authority BPMIGAS has submitted its recommendation to the Energy and Mineral Resources Ministry about the contract of Total E&P Indonesie in gas-rich Mahakam block, East Kalimantan, after it expires in 2017, according to Chairman R. Priyono.

However, no decision has been taken by the Ministry over the contract up to now.

?For the Mahakam contract extension, BPMIGAS has submitted the recommendation to the Director General of Oil and Gas (at the Ministry). The recommendation was formulated in over 40 pages of paper and was submitted in 2010,? Priyono told petromindo.com.

State owned oil and gas firm PT Pertamina has publicly requested the government to take over the block once Total?s contract expires.

Priyono stopped short of specifically naming which company BPMIGAS had recommended to the Ministry to manage the block from 2017 on, but did say that Total has been investing heavily to develop the block that it would be unfortunate for the country if investment in the block declines.

?We have told Pak (Jero) Wacik (Energy and Mineral Resources Minister) that Total has been investing US$2 billion for Mahakam every year. If, say Pertamina takes over and invests only $1 billion. That would be unfortunate, every country in the world is looking to attract foreign direct investment,? he said.

Priyono added he does not have a problem with Pertamina taking over the block. ?I think Pertamina is capable of managing Mahakam, but how efficient? That?s the question. We?d like first to see how efficient Pertamina is in managing West Maduda Offshore block.?

Editing by Dadan Wijaksana