Govt signs two oil and gas block contracts
Wednesday, May 25 2016 - 02:45 PM WIB
Minister of Energy and Mineral Resources Sudriman Said and and upstream authority SKK Migas? Head Amien Sunaryadi signed on Wednesday two Production Sharing Contracts (PSC) to explore and develop conventional and non-conventional (shale) oil and gas resources.
The contract signing was carried out on the sidelines of the 40th Indonesian Petroleum Association (IPA) Convention & Exhibition.
?The number of contracts are smaller than the previous years. Still, we are optimistic (about the outlook of Indonesian oil and gas business),? Sudirman said.
The contracts are for East Ambalat conventional block offshore northeast Kalimantan, which is operated by PT Pertamina Hulu Energi; and for Central Bangkanai non-conventional block in Central Kalimantan operated by Adaco Energy.
In February of this year, Director General of Oil and Gas IGN Wiratmaja said the ministry had assigned Pertamina to operate the abandoned East Ambalat PSC located in Makassar Strait, in an area bordering Malaysian territory. The government expected Pertamina to team up with Malaysian firm Petronas to develop the block, he said.
Pertamina?s spokesperson Wianda Pusponegoro said the contract is for 30 years and Pertamina will invest US$8.5 million in the first three years.
The East Ambalat PSC located in the Tarakan Basin offshore northeast Kalimantan, and covers an area of approximately 4,739 sq km.
The 30-year PSC was awarded to Unocal East Ambalat Ltd. (now Chevron East Ambalat Ltd) on December 12, 2004 for a term of 30 years.
In June 2009, upstream authority BPMIGAS (now SKK Migas) recommended an extension of the exploration period of the PSC. However, Chevron elected to relinquish the block to the government with effect from the expiry of the initial six-year exploration term in December 2010.
Both Malaysia and Indonesia claim rights over the East Ambalat block.
Editing by Johannes Simbolon