PetroChina interested in East Kalimantan, Attaka blocks

By Godang Sitompul

PetroChina Indonesia has expressed interest to take over the East Kalimantan block after the contract of current operator Chevron expires in October of next year.

The company has sent a letter to the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources stating its interest in EastKal block as well as in the Attaka block, both located in East Kalimantan.

Chevron has said it would not continue developing the EastKal block after its contract expires. Inpex Corp and Chevron which equally owns Attaka have also said they would not continue developing the block after their contract expires.

?The company (PetroChina) has sent a letter of interest to the Director General of Oil and Gas. Currently, we?re reviewing it,? a source told Petromindo.com on Monday, adding that the Chinese upstream company has agreed to apply the gross split scheme in the new contract.

Director of Upstream Management at the Ministry of Energy and Mineral Resources, Tunggal, said previously that EastKal and Attaka blocks are ?unitization project,? which means that the blocks management and processing of the output are not separated.

The government has previously assigned Pertamina to take over the two blocks, but the company has decided not to take over the EastKal block after the current contract expires due to the huge abandonment and site restoration funds that must be covered by Pertamina. The government will apply the gross split scheme in the new contract, which means that operator will no longer get reimbursement of operating and investment expenses. Pertamina also considers EastKal block to lack economic feasibility.

Editing by Reiner Simanjuntak