Pertamina expresses concern over burdensome ASR funds in East Kalimantan block
Thursday, November 10 2016 - 03:24 AM WIB
State-owned oil and gas firm PT Pertamina expressed concern over the burdensome abandonment and site restoration (ASR) funds it would have to shoulder when the company takes over the East Kalimantan block from the current contractor upon expiry of the existing production sharing contract.
The company expressed this concern during a meeting with Deputy Minister of Energy and Mineral Resources Arcandra Tahar on Tuesday discussing among others the prospect for the company to takeover the EastKal block. ?Yesterday we?re summoned by the deputy minister discussing once again about the East Kalimantan block, programs and suggestions from Pertamina. What will be quite burdensome for us is the ASR fund from the previous operator (Chevron),? said Pertamina Upstream Director Syamsu Alam to Petromindo.com on Wednesday.
He said that the burdensome ASR fund will undermine the economic feasibility of the project. ?So we have make proposal on how to restructure it,? he said, but stopped short of providing details.
As has been previously reported by this portal, Pertamina has officially made a request to the government to takeover the EastKal and Attaka blocks in East Kalimantan Province when the contracts of the existing investors expire.
Inpex Corp, the operator of the Attaka block with 50 percent interest, and its partner Chevron Indonesia Company (CICO), have said that they will not request for an extension of the production sharing contract over the block when it expires at the end of 2017.
CICO, which holds 92.5 percent interest in the EastKal block, and its partner Inpex, have also decided not to extend their current contract over the block when it expires on October 2018.
Pertamina wants the government to merge the two blocks into a single oil and gas working area, according to a source.
Editing by Reiner Simanjuntak