Pertamina plans to take over Madura block

State oil and gas company PT Pertamina plans to take over Madura onshore block after the operator, Medco E&P, a subsidiary of PT Medo Energi International, returns the block to the government, Kompas reported on Monday.

 

Pertamina’s upstream director Sukusen Sumarinda said in Jakarta last week that the company would use its privilege as regulated in the government regulation No. 35/2004 to take over the block. Under the regulation, Pertamina as a state owned company holds a priority to get oil and gas blocks auctioned off by the government.

 

 “We will propose (to take over the block) through a direct tender mechanism.  It's up to the government to decide whether we shall get the block or not,” he said.

 

The block is operated by Medco which has a 65 percent stake with Pertamina having the remaining 35 percent. The exploration permit for the block ended in May, 2007. Medco E&P has decided to return the block to the government.

 

Pertamina is also interested to acquire Ketapang block, offshore East Java, according to Sukusen. The block is equally owned by US oil and gas firm ConocoPhillips and Malaysia oil and gas firm Petronas with the American firm as the operator. Industry sources said that ConocoPhillips is in the process of giving up its entire interest in the block to Petronas in return for interest in Petronas block(s).

 

In May 2007, ConocoPhillips was ordered by upstream oil and gas authority BPMIGAS to improve its plan of development (PoD) for Bukit Tua oil field of Ketapang block as the agency considered the PoD did not take into account the commercialization of the field's significant associated gas. (*)