New regulation on expiring oil, gas working areas issued

Then minister of energy and mineral resources Luhut Panjaitan had on October 13 issued Ministerial Regulation No 30/2016, which revises Ministerial Regulation No 15/2015 on the development expiring oil and gas working areas.

The ministry said in a statement on Tuesday that under the new regulation, state-owned oil and gas firm PT Pertamina or other companies (winning bidders) that would takeover operatorship of expiring oil and gas working areas can start making investment even before their new contracts start effective.

The statement said that upstream oil and gas authority SKK Migas will produce a guideline in making such investment and other necessary operating activities.

The regulation apparently will pave the way for Pertamina, which has been assigned to take over the Mahakam block from current contractor Total E&P Indonesie when its contract over the block expires end 2017.

Pertamina has said it wants to start making investment in Mahakam block during the transition period in 2017 before the new contract becomes effective in the following year in a bid to help maintain the block?s production.

Pertamina plans to invest US$180 million for the drilling of 19 wells before 2018 so that gas production at Mahakam block can be maintained at 1.2 bscfd, and condensate at around 20,000 bcpd in 2018-2019.

Editing by Reiner Simanjuntak