Energi Mega urges PHE to reimburse $130m investment in ONWJ block

By Febry Silaban

IDX-listed upstream company PT Energi Mega Persada (EMP) urges PT Pertamina Hulu Energi Offshore North West Java (PHE ONWJ), operator of the ONWJ block in West Java Province, to reimburse some US$130 million worth of investment and working capital it had made in the past few years prior to the expiry of its previous contract over the block.

EMP President Director Imam P. Agustino said on Thursday that the total investment made by the investors in the ONWJ block prior to the expiry of the contract in January of this year reached $465 million, of which $130 million was contributed by EMP.

Prior to the expiry of the contract, EMP held 36 percent participating interest in the ONWJ block, Kuwait Foreign Petroleum Exploration Company (Kufpec) owned 5 percent interest, and PHE ONWJ owned operating interest of 58.27 percent.

Following the expiry of the contract, the government transferred the block entirely to PHE ONWJ under a new contract issued on January 18 based on the gross split scheme, which means that the government does no longer reimburse the investments made by the investors as opposed to the cost recovery mechanism.

According to Minister of Energy and Mineral Resources Regulation No 26/2017, PHE ONWJ as the new operator of the block is required to reimburse the investment cost made by the previous investors which have not been covered by the government through the cost recovery mechanism.

Editing by Reiner Simanjuntak