Total has yet to respond to Mahakam block offer
Friday, April 7 2017 - 03:18 AM WIB
French oil and gas giant Total SA has yet to respond to an offer for a participating interest in the Mahakam block after its current contract expires at the end of this year.
Total senior officials led by visiting CEO Patrick Pouyanne met on Thursday with Minister of Energy and Mineral Resources and top officials of state-owned oil and gas firm PT Pertamina to among others discuss its future role in the Mahakam block, in East Kalimantan Province, after the block is transferred to Petamina starting 2018.
Pertamina President Director Ellia Massa Manik said that Total has yet to respond to Pertamina?s offer for the French firm and its current partner in the block Japan?s Inpex Corp to have a combined 30 percent participating interest after their current contract over the block expires at the end of this year.
He said that Total will later submit a letter to the ministry whether it would continue to participate in the future development of the block. But there?s no deadline given to Total in making the formal response to the offer. ?They (Total) have yet to respond to the offer. They will send a letter to the government, but they may also decide to not participate,? he said.
Ellia added that during the meeting, Pertamina insisted on its earlier commitment to only offer up to 30 percent interest in the Mahakam block for Total and Inpex.
Jonan last month said there was possibility to increase the offer to 39 percent in a bid to lure Total and Inpex to continue to participate in the Mahakam block. He added that there was also possibility for Total through its Indonesian subsidiary PT Total E&P Indonesie (TEPI) to maintain operatorship status in Mahakam block under a joint operation arrangement with Pertamina to prevent production in the block from dropping when it is transferred to Pertamina.
TEPI currently holds a 50 percent operating interest in Mahakam block, with balance held by Inpex.
Meanwile, Pertamina Upstream Director Syamsu Alam said that the company plans to start drilling program at the block in August of this year. But it will only drill a total of eight wells this year, significantly down from its earlier plan of a total of 19 wells. Meanwhile, TEPI completed in March its commitment to drill six wells this year.
Average production at Mahakam block, which started production in 1974, currently stands at 1,635 mmscfd of gas, and 63,000 bpd of oil.
Editing by Reiner Simanjuntak