Chevron to temporarily manage Siak block after contract expires

The government will appoint PT Chevron Pacific Indonesia (CPI) to temporarily operate the Siak block when its existing contract expires next month, Investor Daily reported Tuesday.

Oil and Gas Upstream Director at the Ministry of Energy and Mineral Resources, Hendra Fadly was quoted by the paper as saying that CPI will continue to operate the block until the government appoints a definitive operator of the block.

CPI has sought for an extension of its current contract over the block, which will expire on November 27 of this year. The government, however, has yet to make a decision on the fate of the block.

Hendra said that the decision to temporarily hand over the operatorship of the Siak block to CPI was meant to help avoid a decline in the oil and gas production at the block.

Meanwhile, CPI President Director Hamid Batubara was quoted by the paper as saying that his company would implement whatever decision to be taken by the government including appointing the firm to temporarily manage the Siak block.

Meanwhile, acting chairman of the upstream oil and gas authority SKK Migas, J. Widjonarko warned that production at the Siak block has declined from its peak of 2,500 bpd to 1,700 bpd due to lengthy delays over the government decision on the fate of the Siak block after CPI?s contract expires.

CPI has been managing the Siak block in Sumatra since 1963, when the company?s name at the time was PT California Texas Indonesia. The contract was renewed in 1991 for another 22 years, which will expire on November 27. (*)