Pertamina drops asset swap talks with Total

State oil, gas company PT Pertamina (Persero) has dropped upstream asset swap talks with French energy giant Total SA which was originally designed as sweetener for the latter to win contract extension of Mahakam PSC giant gas block in East Kalimantan.

?Asset swap talks have collapsed as both parties could not agree on a deal,? Pertamina?s Upstream Deputy Director Slamet Riyadi told Petromindo.Com last week.

Slamet said that Pertamina is now waiting for the contract to be expired in 2017 and no longer has any plan to acquire non-operating interest in the block before the contract expires. ?Pertamina wants to take over the block?s operatorship when the contract expires in 2017,? he said.

Under the initial arrangement, Pertamina will gradually farm-in Mahakam block in return for Total farming in Pertamina?s assets.

Upstream Director M. Husen had earlier said that Pertamina had sent a letter to the Ministry of Energy and Mineral Resources asking to take over the block?s operatorship and 51 percent working interest.

The Mahakam block is currently Indonesia ?s largest gas producer with production of around 2.4 BCFD, supplying gas to Bontang LNG plant.

Total has 50 percent stake in the block with the balance held by Japan ?s Inpex Corp.

Total had made public its intention to extend the block?s contract. (godang)