MEMR to revise production split in East Natuna block
Friday, October 7 2016 - 02:20 AM WIB
The Ministry of Energy and Mineral Resources plans to revise the production split between the government and contractors in the planned East Natuna block project in Riau Islands Province.
Director General of Oil and Gas at the ministry, IGN Wiratmaja Puja said on Thursday that under the draft of the production sharing contract for the East Natuna block, the oil output split for the contractors has been set at 40 percent, and gas split at 45 percent, with the remainders for the government.
Wiratmaja said that the consortium is currently conducting technical market review. He said that the new split will be decided once this review has been completed.
He also said that the East Natuna production sharing contract will be divided into two parts: one for oil structure and another for gas structure. But he said it will remain a single contract.
The government has been under pressure to improve investment climate in the country?s upstream oil and gas sector in a bid to help lure fresh investment amid the current weak oil price environment. The government has recently finalized the revision of Government Regulation No 79/2010, promising fiscal and non-fiscal incentives for upstream exploration activities, and possibly for production activities. The new regulation will become effective once it has been signed by President Joko Widodo.
The East Natuna consortium which includes PT Pertamina (Persero), Exxon Mobil and PTT Thailand failed to sign the East Natuna production sharing contract (PSC) on Wednesday as targeted earlier by Interim Minister of Energy and Mineral Resources Luhut Panjaitan as they have yet to reach agreement on their respective participating interest in the East Natuna block. Luhut said the contract is expected to be concluded within the next month.
The East Natuna block, formerly called D-Alpha, is estimated to hold up to 200 tcf of gas reserve, the largest gas reserve ever found in Indonesia. However, only 46 tcf of the gas is said to be recoverable due the high CO2 element contained in the reserve.
Editing by Reiner Simanjuntak