Govt to make decision on Mahakam block extension

Government is expected to make final decision about contract extension of Mahakam PSC giant gas block in East Kalimantan in January or February this year, a senior official at the Ministry of Energy and Mineral Resources said.

French giant Total SA has submitted request to extend the block?s contract and government?s approval would wait for issuance Ministrial Decree which regulates PSC contract extension has been completed and would be signed by the Minister of Energy and Mineral Resources soon, Director General of Oil and Gas Evita Legowo was quoted by the Ministry?s website as saying over the week end.

Mahakam block, which currently produces 2.4 BCFD of gas, is the main supplier Bontang LNG plant. The block is operated by Total SA which now has 50% percent. Japan?s Inpex Corp. has the remaining 50% stake in the block.

The block?s contract will expire in 2017 and Total is reportedly trying to get 15-year extension.

State oil and gas company PT Pertamina (Persero) reportedly would be given participating interest in the block as part of the extension conditions.

The block?s extension would pave way for LNG supply contract extension with Japanese LNG buyers known as Western Buyers, as they insist on the block?s contract extension before signing final deal. (alex)