Central Java asking for PI in Kepodang field

Central Java?s Governor Ganjar Pranowo has sent a letter to Minister of Energy and Mineral Resources Sudirman Said, asking for a 10 percent Participating Interest in Kepodang field.

?The minister will probably make a decision in the near future whether to grant the request,? Director General of Oil and Gas IGN Wiratmadja said in a statement recently.

Under the existing regulation, mayoralty/regency/province is entitled to 10 percent PI in oil and gas blocks located within 0 to 4 miles offshore. Province is entitled to the 10 PI if the oil and gas block is situated 4 to 12 miles offshore. If the block is situated beyond 12 miles offshore, the right to PI is held by the central government.

Since the Kepodang field is located beyond 12 miles offshore, the PI right is held by the central government. However, the Central Java administration insists it may ask for the the PI on the grounds that the gas will be pipelined to the province?s mainland.

The Kopodang field in Muriah block, controlled by Petronas Carigali, is projected to start operation in the fourth quarter this year with an initial volume of 60 mmscfd and peak volume of 120 mmscfd. Petronas and state owned electricity firm PT Perusahaan Listrik Negara has signed a gas sales and purchasing agreement at the price of US$4.61 per mmbtu with a price escalation of 8.6 percent per year over the contract period of 12 years. The gas will be enough to generate 600 MW of power at PLTGU Tambak Lorok which has an installed capacity of 1000 MW.

Editing by Johannes Simbolon