Govt to slash Medco?s Aceh gas block split
Tuesday, October 28 2008 - 05:09 AM WIB
Purnomo said that earlier government had agreed to reduce its split from 70 percent to 51 percent, to give Medco and its partners in the Block A PSC adequate return on investment to exploit the block, which gas have high sulfur and CO2 content.
Upstream oil and gas authority BPMIGAS, however, advised the government that in the light of high gas price, split of 30 percent for is already attractive for the block?s participant to exploit the block.
Purnomo did not say when decision regarding the split and contract extension will be made by the government.
The block?s contract will expire in 2011 and Medco had in March this year filed for 20 years extension.
Under the Indonesian regulation, government could decide to extend a block?s contract with the advise of BPMIGAS.
Medco and partners will spend US$600 million to develop the block and would supply 110 MMCFD of gas to PIM for 7 years starting 2010. Another 15 MMCFD of gas from the block would be supplied to state electricity firm PLN.
The gas will be delivered from 3 fields namely Alur Rambong field, Julu Rayeu field and Alur Siwah field, through a 100 km pipeline from Block A.
The block is expected to start production in 2010.
The block is operated by Medco with a 41.67 percent interest. Other participants are Japex (16.67 percent) and Premier Oil (41.67 percent). (Godang)