Pertamina to hold talks with Total over partnership in Mahakam block

Petromindo|Boim

State-owned oil and gas firm PT Pertamina plans to start talks next week with Total E&P Indonesie over possible partnership in Mahakam block after the latter?s current contract over the block expires at the end of this year, Kontan reported on Thursday.

The paper quoted Pertamina Upstream Director Syamsu Alam as saying that the discussion with Total next week will be focused on technical issues. ?How will (Total) enter (the Mahakam block). What is the mechanism,? he told the paper.

The paper said that the two companies will not yet discuss the valuation of the shares, and how much shares can Total have in the Mahakam block under a new contract. Total currently holds a 50 percent operating interest in Mahakam block, with the balance held by Inpex Corp.

The government has decided to transfer the Mahakam block to Pertamina after the current contract expires. In 2015, then minister of energy and mineral resources Sudirman Said issued a letter allowing Pertamina to allocate up to 30 percent shares in the block to Total and Inpex under a new contract as part of efforts to help maintain production level at the block amid concerns over limited capacity of Pertamina.

But Total later requested to Minister of Energy and Mineral Resources Ignasius Jonan for greater interest of up to 39 percent as part of conditions for the company to continue participate in the development of the Mahakam block in East Kalimantan. The minister has yet to respond to the request of Total.

Syamsu said that Pertamina remains with its previous position that it will only allocate 30 percent shares to Total in the new Mahakam block contract.

Elsewhere, Syamsu said that Pertamina has set a target to drill 14-15 wells in Mahakam block until end of this year. This should help maintain the block?s gas output level of around 1 bcf. (*)