Pertamina wants clarity over East Natuna PSC scheme

By Godang Sitompul

State oil and gas company PT Pertamina is optimistic the government can complete the formulation of PSC scheme?s terms and conditions for East Natuna block this year, a move that will kick off the development of one of biggest untapped gas reserves in Asia.

?We expect the government to finish the formulation of terms and conditions of the PSC scheme within this year. Then we?ll be ready for block?s development,? Pertamina Upstream Director M. Husein told petromindo.com.

The East Natuna block in South China Sea is believed to hold 46 tcf of natural gas. The gas reserve however has significant CO2 contents, which means the cost would be unusually high as Pertamina and partners (ExxonMobil and Total SA) will have to clean the gas of the CO2 elements.

This condition led Pertamina and partners to ask for incentives, including a more generous production split, to develop the block.

Husein did not mention whether the PSC scheme would include that form of incentive.

The project is expected to cost Pertamina and its partners between US$20 billion to $40 billion, depending on the gas delivery and production methods.

Editing by Dadan Wijaksana