Pertamina told to team up with existing contractors in ?expired? blocks
Monday, October 30 2017 - 01:53 AM WIB
The Ministry of Energy and Mineral Resources has advised state-owned oil and gas firm PT Pertamina to team up with existing contractors in managing oil and gas blocks where the contractors? contracts are set to expire in 2018-2019, Kontan reported on Monday.
The paper quoted Director General of Oil and Gas at the ministry Ego Syahrial as saying that instead of Pertamina going alone in running the blocks, the company should run the blocks under joint operatorship with the current contractors so as to avoid production from declining and to prevent operating cost from rising.
This model is similar to the one proposed for Mahakam block, where the current contract of Total and Inpex will expire at the end of this year. Pertamina will take over the block starting 2018 under a new contract, in which Total and Inpex have been offered by the government up to 39 percent participating interest.
The government earlier this year assigned Pertamina to take over eight oil and gas blocks where the contracts of the current contractors are set to expire in 2018-2019. But as the government is concerned with Pertamina?s capacity in ensuring stable production and efficient operating cost, the new model of join operatorship with the existing contractors is offered.
The paper said that the ministry has proposed Pertamina for joint operatorship with the existing contractors in four oil and gas blocks including Tuban, Sanga-Sanga, Ogan Komering, and South East Sumatra.
Meanwhile, the NSO block has been under the operatorship of Pertamina, while the Tengah block will be ?unitized? with the Mahakam block.
The government plans to offer the East Kalimantan and Attaka blocks to other investors via tender as both Pertamina and the existing contractors are no interested.
The paper quoted Pertamina Upstream Director Syamsu Alam as saying that the company has submitted proposal to the government regarding its interest in taking over the Sanga-Sanga and South East Sumatra blocks. (*)