Still long way to go for extension of Mahakam contract: Govt

Director General of Oil and Gas Evita H. Legowo said on Friday that the government would not decide on the extension of Total E&P Indonesie?s contract in Mahakam giant block in East Kalimantan anytime soon.

?The contract extension can not be decided this year as the process for contract extension will normally take time,? Evita, said, adding that her office was now working on the extension of other contracts which would end in 2017.

Evita said that the government still had much time to think over the extension of the Mahakam contract.

The block is operated by Total, which partners with Japan?s Inpex Corp with equal interest of 50 percent each. The block is the biggest gas supplier to Bontang LNG plant.

Mahakam block is expected to reach 2.5 BCFD of gas and 92,000 BPD of condensate this year.

Total, together with its partner Inpex are desperate to get contract extension on Mahakam block, which expires in 2017. But thus far the government has yet to respond to the request. State oil and gas company PT Pertamina (Persero) is reportedly in talks to get a 25 percent stake in the block before the block?s contract expire and has openly stated intention to take over the block?s operatorship when the current contract expires.

Energy and Mineral Resources Minister Darwin Zahedy Saleh previously said that the government supported Pertamina?s plan to acquire interest in the Mahakam block before the end of the contract. (godang)