Signature bonus for new Mahakam block contract set at $41m

The government has set signature bonus that must be paid by state-owned oil and gas firm PT Pertamina for a new contract of Mahakam block at a preliminary figure of US$41 million, Bisnis Indonesia reported on Monday.

?The preliminary figure (of the signature bonus) is $41 million,? said Director for Upstream Oil and Gas Development at the Ministry of Energy and Mineral Resources Djoko Siswanto.

He said that the previous record of signature bonus was $40 million, and the government wanted higher signature bonus from Mahakam block.

The government has appointed Pertamina to take over the Mahakam block, in East Kalimantan, when the current contract held by Total and Inpex Corp expires at the end of 2017.

Pertamina Upstream Director Syamsu Alam said that his company has yet to decide whether to accept the $41 million signature bonus figure or renegotiate it with the government.

Meanwhile, regarding the issue of government?s share of output in the block, Djoko said that negotiation is still in progress.

Under the current contract, the government obtains 71 percent of the output from the block, with the remainder 29 percent goes to Total and Inpex. Djoko said the government is seeking for higher share of the output.

The paper said that Total and Inpex are waiting for the outcome of the negotiation over the government?s output share before deciding whether to accept Pertamina?s offer for a 30 percent stake in the block under the new contract. (*)