Government expected to decide on PSC for East Natuna this year
Tuesday, January 28 2014 - 02:20 AM WIB
State owned oil and gas firm PT Pertamina (Persero) expects that the Government to decide early this year on the terms and conditions for the Production Sharing Contract (PSC) of the East Natuna block in Riau Islands, previously known as D-Alpha block.
?Pertamina wants to soon conduct operation after the PSC has been signed. However, until now, the Government has not yet decided on the PSC that has been proposed by Pertamina and ExxonMobil,? Dennie Tampublon, SVP of Business Development at Pertamina, told Petromindo.com.
In 2011, Pertamina and its consortium partners, namely Esso Natuna Ltd and Total E&P Activities Petrolieres, signed Principles of Agreement (PoA) on the development of the East Natuna. The POA is an initial agreement which was to be used as the basis for the issuance of a production sharing contract (PSC) by the government
The consortium asked for fiscal incentives given the fact that the natural gas contained in the block has a high CO2 content.
The development of the block will require advanced and thus more expensive technology to remove the carbon dioxide. As a result, out of 200 trillion cubic feet gas reserves at the block, only 45 trillion cubic feet would be able to be produced.
Pertamina has estimated that the development of the gas-rich East Natuna block will cost between US$20 billion and $40 billion due to high carbon dioxide content.
Editing by Johannes Simbolon