Pertamina to start drilling of 14 wells in Mahakam block next month

By Febry Silaban

Petromindo|Boim

State-owned oil and gas firm PT Pertamina said it will start drilling 14 wells in Mahakam block, East Kalimantan, in the middle of June with estimated total cost of US$160 million.

?We finally decide to drill 14 wells starting June,? said Upstream Director of Pertamina, Syamsu Alam on Wednesday on the sidelines of the 41th IPA annual convention and exhibition in Jakarta.

Pertamina through subsidiary PT Pertamina Hulu Mahakam will take over the Mahakam block from current investors PT Total EP Indonesie (TEPI) and Inpex Corp early next year once the current contract expires at the end of this year. TEPI, current operator of the block, has agreed to allow Pertamina to start making investment in the block this year to help maintain output level. Pertamina initially planned to drill 19 wells this year, and TEPI six wells. The latter company had completed drilling the six wells in March.

Syamsu said that the drilling program forms part efforts to help maintain production level in Mahakam block, which he said currently stands at around 1,400 mmscfd of gas.

Deputy Minister of Energy and Mineral Resources Arcandra Tahar said last week that TEPI and Inpex have demanded for a higher interest of 39 percent in Mahakam block as part of conditions for their continuing participation in the development of the block after their current contract expires at the end of this year.

Arcandra said that Pertamina will make valuation of the Mahakam block asset to determine the price of the 39 percent interest requested by TEPI and Inpex. The government previously offered TEPI and Inpex up to only 30 percent interest in the new Mahakam block contract.

Editing by Reiner Simanjuntak