Government insists on allocating 39% shares in Mahakam block for Total, Inpex
Friday, August 25 2017 - 02:14 AM WIB
Minister of Energy and Mineral Resources Ignasius Jonan has insisted that the current investors in the Mahakam block, Total and Inpex, to be allocated with up to 39 percent interest in the block in a new contract after the current one expires at the end of this year.
?That?s what the minister has said,? Deputy Minister of Energy and Mineral Resources Arcandra Tahar said on Thursday.
He, however, said that the share allocation must be based on business to business deal between state-owned oil and gas firm PT Pertamina, the upcoming new operator of the block, and the two foreign oil and gas companies. ?We have asked Total to hold b to b (business to business) negotiation with Pertamina,? he said.
Inpex currently holds a 50 percent interest in the Mahakam block, in East Kalimantan, while Total holds the balance as the operator of the block. As reported earlier by this portal, the two companies met with Jonan and Arcandra on August 14 discussing a number of issues regarding the Mahakam block development.
The government has decided to hand over the Mahakam block to Pertamina after the current contract of Total and Inpex expires at the end of this year. But the government is also hopeful for the two foreign firms to continue participation in the development of the block under a new contract with Pertamina as operator.
Total and Inpex have demanded a 39 percent interest in the block as part of conditions for their continued participation, but Pertamina has insisted that it would only be willing to allocate up to 30 percent shares, as had been decided by the previous minister in 2015.
Jonan indicated in June of this year for the possibility of Total and Inpex obtaining up to 39 percent interest in the Mahakam block. He said that Pertamina will remain with controlling interest in the block. (*)