Pertamina wants to start investment in Mahakam block next year
Friday, July 1 2016 - 02:38 AM WIB
Kontan quoted Pertamina President Director Dwi Soetjipto as saying Friday that his company is still waiting for the permit from Total E&P Indonesie (TEPI), the current operator of the block, to begin making the investment. ?We don?t have the right to immediately making investment. We?re waiting for welcoming (permit) from Total E&P because the agreement is that we (only) can enter (the block) in 2018,? he said.
The current contract over the Mahakam block, held by TEPI and Inpex Corp, is set to expire at the end of next year. The government has decided not to renew the contract, handing it over to Pertamina as operator. TEPI and Inpex have been given opportunity to have minority stake in the block after 2018, but the two have yet to respond to the offer.
Dwi said that over the past two years, Total has reduced investment in the block, which has also suffered from production decline. He fears that production of the block will further decline as Total is set to leave the asset.
To help limit the production decline, Dwi said that Pertamina wants to start making investment next year. He said that based on historic data, investment at the block stands at around US$2.5 billion per year. ?We?ll see later how much investment we can (afford). It?s still being discussed,? he said.
Meanwhile, Kontan quoted TEPI Vice President for Human Resources Arividya Novianto as saying that the company is still in discussion with Pertamina on the transfer of operatorship of the block.
Arividya acknowledged that production rate has been on declining trend at Mahakam block due to aging fields.
Gas production at Mahakam block currently stands at 1.74 bcfd, while condensate at 68,000 bpd. The block has 8,500 wells. (*)