No need to rush to extend Total?s Mahakam contract: Minister

Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the government did not find enough reasons to extend the contract held by French firm Total SA on the Mahakam block in East Kalimantan in the short term.

?There aren?t any reasons to quickly extend the contract,? Purnomo said on Wednesday.

The existing contract expires in 2017. Meanwhile, Total has yet to secure new contracts o sell the gas, Purnomo said.

?If Total has signed new contracts to sell the gas (from Mahakam), we can adjust the contract to terms in the gas sale contract,? Purnomo said.

Total currently send gas from Mahakam to the Bontang LNG plant in East Kalimantan. The LNG is then shipped to buyers, mainly in Japan. Most of the LNG sales contracts with the buyers however expire in 2017.

Earlier, Total?s officials said the firm has officially asked the government to extend its Mahakam contract within one or two years. The firm has prepared billions of dollars to further develop the block.

Purnomo said he has ordered upstream regulatory agency BPMIGAS to talk with Total over his proposal to extend the Mahakam contract.

?But, (any decision taken during) the talk is non-binding,? Purnomo said. (Alex)