Pertamina ready to sign East Natuna PSC this month

By Febry Silaban

State-owned oil and gas firm PT Pertamina (Persero), which leads a consortium assigned to develop the East Natuna block in Riau Islands Province, said it is ready to sign the East Natuna PSC this month.

?With the existing concept, by developing the AP (oil) structure first, and to help support defense aspect in the country?s border areas, Pertamina is ready to sign (the PSC) in November,? said Pertamina Upstream Director Syamsu Alam on Wednesday.

Syamsu, however, said that Pertamina will have to take into consideration the decision of other members of the consortium including ExxonMobil and PTT EP of Thailand before signing the PSC.

?It is a very expensive investment, they will certainly look into global portfolio. Previously, the concerns were about the PSC terms, GR 79, and others. The GR 79 (issue) has been settled, and there has been adjustment to the PSC,? he said, referring to Government Regulation No 79/2010 on oil and gas cost recovery and tax treatment in the upstream sector, which has been revised to help lure fresh investment in the upstream sector.

Syamsu said that the company has met with ExxonMobil, and looks like the US firm has obtained a greenlight from its headquarters to proceed with the East Natuna project.

The East Natuna block, formerly called D-Alpha, is estimated to hold up to 200 tcf of gas reserve, the largest gas reserve ever found in Indonesia. However, only 46 tcf of the gas is said to be recoverable due the high CO2 element contained in the reserve.

In the early phase, the consortium aims to accelerate oil production with a target of 7,000-15,000 bopd once the PSC has been signed.

Editing by Reiner Simanjuntak