Pertamina won?t takeover East Kalimantan block

Petromindo|Boim

State-owned oil and gas firm PT Pertamina has decided it will not take over the East Kalimantan block when the contract of current operator Chevron expires in October of next year, Bisnis Indonesia reported on Friday.

?We have discussed (the decision),? said Pertamina Upstream Director Syamsu Alam, but did not provide clear reason for not taking over the block.

The East Kalimantan block is one of the eight blocks offered by the government to be taken over by Pertamina when the current contracts expire next year. Chevron said in 2016 it would not seek for extension of its current contract.

Syamsu has previously said the company was unlikely to take over the East Kalimantan block due to the huge abandonment and site restoration funds that must be covered by Pertamina.

With Pertamina?s decision, the government through the Ministry of Energy and Mineral Resources will offer the block to other investors.

According to Pertamina data, production at the East Kalimantan block in 2016 stood at 36,500 boepd. The block was estimated to have 213 million of oil equivalent reserves in 2015. (*)