Marathon returns Pasang Kayu block, others still being processed at SKK Migas

By Godang Sitompul

Of the total 22 oil and gas production sharing contractors (PSCs) planning to return their oil and gas assets back to the government, so far only Marathon Energy which has officially relinquished the Pasang Kayu block.

The remainders are still being processed by the upstream oil and gas authority SKK Migas to be later forwarded to the Minister of Energy and Mineral Resources via the Directorate General of Oil and Gas for approval.

?Only Marathon so far has officially (relinquished Pasang Kayu block). The others are still at SKK Migas. We?re still waiting (for returned assets) from Exxon, Conoco, Total, Statoil, and Talisman. In total, there are 22 PSCs,? said Oil and Gas Upstream Development Director at the Directorate, Naryanto Wagiman to Petromindo.com Friday.

Naryanto said that while waiting for the process at SKK Migas to be completed, the government is making evaluation on the reasons behind the failure of the PSCs in drilling the assets.

?For example, Talisman. They decided to return the Sadang and Sageri blocks to the government. Talisman has implemented its drilling commitment, but failed, and theoretically it?s difficult to find oil and gas potential in the block because of its generally volcanic structure,? said Naryanto.

Meanwhile, Director General of Oil and Gas, A. Edy Hermantoro said that the government may offer the returned assets to other investors via regular tender, after improving the data of the assets.

He stressed that the termination of the contracts of the 22 PSCs over the particular assets is a normal thing which should not be interpreted as a reflection of dwindling investment climate in the country?s oil and gas sector.

Editing by Reiner Simanjuntak