Govt prepares terms and conditions for extension of Total's Mahakam contract

The government has prepared the terms and conditions for an extension of Franch oil and gas giant Total S.A's contract to manage Mahakam block in East Kalimantan.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that government has set up a team to negotiate Mahakam PSC contract extension, which expires in 2017. He said that the new terms and conditions of the extension must be beneficial to the state.

?Actually, the talks regarding extension of the contract began in recent days. We must prepare ourselves first. I have already asked director general of oil and gas to prepare the terms and conditions to discuss at the talks,? Purnomo said after attending a meeting between President Susilo Bambang Yudhoyono and Total's CEO Thierry Desmarest in Jakarta on Monday.

Meanwhile, Total's CEO Thierry Desmarest said that Total will spend US$6 billion in the next five years to develop Mahakam PSC block, currently Indonesia?s largest gas producing block. (*)