Pertamina says it?s ready to take over Mahakam block

State-owned oil and gas firm PT Pertamina said it?s ready to take over the operatorship of Mahakam block in East Kalimantan starting next year after the contract of current operator, Total, expires at the end of this year.

Pertamina said in a statement on Thursday its success in increasing production at oil and gas blocks taken over in the past from previous operators after their contracts expired should serve as evidence it has the capacity in operating the Mahakam block.

The company pointed out that at ONWJ block, West Java, which was transferred to the company in 2009, within only five years, oil and gas production increased by 12 percent to 40.3 MBOPD from 22.1 MBOPD.

At West Madura Offshore (WMO), whose operatorship was taken over by Pertamina in 2011, within four years, production increased by 14 percent to 20.3 MBOPD from 13.7 MBOPD.

The company reiterated that it is optimistic to be able to maintain production level at Mahakam block after Total and partner Inpex Corp leave the block next year. ?At least from Mahakam block, Pertamina will provide additional contribution of 24 percent of national oil and gas production,? the company said in the statement.

Pertamina made the statement amid concerns on the part of the government with the company?s capacity in operating the Mahakam block particularly in maintaining the block?s production level. Minister of Energy and Mineral Resources has suggested Pertamina to provide participating interest of up to 39 percent in Mahakam block for Total under the new contract to help ensure its continued participating in helping to develop the block. But Pertamina has said it was only willing to provide up to 30 percent participating interest.

Pertamina has started making investment this year at the Mahakam block. The company said that it has drilled 11 wells out of the target to drill a total of 15 through 2018. It said that has spent around US$160 million to finance the drilling programs.

The company said it plans other measures to help maintain production level at Mahakam under its operatorship. Pertamina through indirect subsidiary PT Pertamina Hulu Mahakam will operate the Mahakam block starting next year.

Editing by Reiner Simanjuntak