MCL-PEPC to revise POD for Jambaran-Tiung Biru unitization
Tuesday, October 14 2014 - 02:17 AM WIB
Mobil Cepu Ltd. (MCL), a unit of ExxonMobil Corp, and Pertamina EP Cepu (PEPC), a subsidiary of state owned oil and gas firm PT Pertamina (Persero) will submit a revised plan of development (POD) for the unitization of Jambaran and Tiung Biru fields in the Cepu block, East Java, according to a senior official of upstream authority SKK Migas.
"This is because no deal has been reached with PKC (fertilizer firm PT Pupuk Kujang Cikampek) regarding price (of gas to be supplied from the fields), whereas Pertamina has almost agreed (on the price). Therefore, PEPC and MCL will submit a revised POD and we will strive to reduce costs," Deputy for Commercial Control at SKK Migas, Widhyawan Prawiraatmadja told Petromindo.com.
He said, a deal is unlikely because of the price offered by PKC can not support the economics of the project. But, Widhyawan did not provide further details about the gas price.
Meanwhile, President Director of PEPC Amril Thaib Mandailing confirmed that negotiations with PKC and Pertamina on the price price of gas from Jambaran-Tiung Biru are encountering a deadlock.
"So, no deal has been reached with both PKC and the Directorate of Gas at Pertamina (Persero) on price. According to the buyers, the price of US$8/mmbtu with a escalation of 3 percent per year (offered by PEPC) is too expensive," Amril explained.
When asked for confirmation, Wika Migantoro, VP of Gas Sourcing at Pertamina, PEPC?s parent company, told Petromindo.com that the negotiation process is still running and the key terms of the Heads of Agreement (HOA) have been agreed upon by all parties, except for the price.
"We will continue to negotiate.A meeting of top-level management has been scheduled for end-October," Mika said.
In April of this year, the Ministry of Energy and Mineral Resources issued a letter for the allocation of gas from the Jambaran-Tiung Biru field operated by PEPC that 100 mmscfd of the gas from the field would be allocated for Pertamina. Meanwhile, another 85 mmscfd would be allocated for PKC.
Editing by Johannes Simbolon