Pertamina sets aside $1b for West Madura block
Tuesday, April 26 2011 - 03:24 AM WIB
Company spokesperson Mochamad Harun said the funds would be used to boost the block?s oil and gas production by digging 86 new wells, 11 exploration wells, eight work-over wells and 67 development wells.
?Currently, due to uncertainty over the future operator of the block, its production lags at only 13,400 barrels of oil per day [bpd]. We aim to boost production to 25,800 bpd in 2012, 32,500 bpd in 2013, 37,200 bpd in 2014 and 40,500 bpd in 2015,? he told a media briefing on Monday.
For the block?s gas production, currently only 138 million standard cubic feet per day (mmscfd), Harun believed the company could raise the production to 166 mmscfd in 2012 and 204 mmscfd in 2015.
?We?re confident that we have the capability to operate the block,? he said.
The future operator of the West Madura offshore block has recently been in limbo, as the government has yet to decide whether or not to grant the right to Pertamina or extend the contract with the block?s current operator, Korea-based Kodeco Energy.
The contract with Kodeco will expire on May 7.
Over the past two years, Pertamina has repeatedly requested to become the operator of the block, but the government yet to respond.
Prior to March 31, Pertamina held a 50 percent stake in the block while Kodeco Energy and China-based CNOOC had 25 percent stakes each.
However, in a controversial transaction approved by upstream oil and gas regulator BPMigas, dated March 31, PT Sinergindo Citra Harapan acquired a 12.5 percent stake from Kodeco and Pure Link Investment took over a 12.5 percent stake from CNOOC.
The transaction was odd because there was currently no guarantee that Kodeco and CNOOC would remain owners of the block, said Romahurmuziy, a lawmaker on House of Representatives? Commission VII, overseeing energy affairs.
?Only insane business entities agree to buy stakes from companies whose future are unclear,? he added.
He also said that there might be ?other parties? who provided illicit information about the future of the block to those involved in the transaction. He promised that the House would call Energy and Mineral Resources Minister Darwin Zahedy Saleh to clarify the issue.
BPMigas head R. Priyono earlier claimed that the transaction was just an ?ordinary? stake-selling and purchasing agreement.
According to BPMigas?s letter signed by Priyono, the transaction had acquired approval from Darwin through a letter issued by the director general for oil and gas on March 17.
The ministry refused to give any comment on that matter.
Director general for oil and gas Evita Herawati Legowo said on Monday that the government was still discussing who would be the future operator of the West Madura offshore block. (*)