Government to extend Chevron?s contract over Rokan block
Thursday, June 8 2017 - 05:28 AM WIB
Petromindo|Dasir
The government is likely to extend the current contract of PT Chevron Pacific Indonesia (CPI) over the Rokan block in Riau Province which is set to expire in 2021.
Deputy for Procurement at upstream oil and gas authority SKK Migas, Djoko Siswanto said that CPI has the right to seek for an extension of the contract, however, the government will apply the gross split scheme in the new contract, instead of the cost recovery mechanism.
?Chevron is currently making assessment. The Rokan block will not be transferred to Pertamina (state owned oil and gas firm), but the gross split will be applied,? he said on Thursday.
He explained that CPI will be allowed to seek for an extension of its current contract over the Rokan block so that the company will continue to make investment and avoid production decline in the block.
?We don?t want to see what happens with Vico, which has no longer make investment at the Sanga-sanga block this year as its contract will expire next year. So is with Total which only made little investment this year by drilling only six wells,? he said. Total?s contract over the Mahakam block in East Kalimantan is set to expire end of this year, and the government has decided to transfer the block to Pertamina.
Elsewhere, Djoko said that CPI is committed to apply the gross split scheme in the new Rokan block contract as it would provide the company with greater revenue split than under the cost recovery contract.
He said that although Rokan is an aging block, production remains high at 250,000 bopd.
Editing by Reiner Simanjuntak