Total, Pertamina have yet to discuss new Mahakam block proposal
Tuesday, April 4 2017 - 02:35 AM WIB
Total E&P Indonesie (TEPI) and state-owned oil and gas firm PT Pertamina have yet to hold talks over a recent new proposal from Minister of Energy and Mineral Resources Ignasius Jonan regarding the future of Mahakam block in East Kalimantan after the current contract expires at the end of this year.
During a visit last month to the block, Jonan disclosed the possibility of TEPI maintaining its operatorship status in the Mahakam block through a joint operatorship with Pertamina after its current contract over the block expires at the end of this year. He added that there is also a possibility for TEPI and its current partner Inpex Corp to have a higher stake in the block of up to 39 percent under a new production sharing contract. The government, which has decided to transfer the block to Pertamina after the current contract expires, previously offered TEPI and Inpex a combined 30 percent interest in the block, with Pertamina through subsidiary PT Pertamina Hulu Mahakam controlling the remaining 70 percent stake. Jonan said that the new proposal was aimed at helping to avoid production decline in the Mahakam block when the current contract expires, given the limited capacity of Pertamina.
?In my understanding, to date there have been no B to B talks (between TEPI and Pertamina,? said TEPI Head of Media Relations Department, Kristanto Hartadi to Kontan on Monday.
The paper obtained information that Jonan plans to hold talks with TEPI and Pertamina this week. But Pertamina Upstream Director Syamsu Alam claimed that there has been no schedule set for a meeting with TEPI over the Mahakam block. ?There?s no agenda related to the Mahakam block shares,? he said.
He added that the minister has not obliged Pertamina to allocate up to 39 percent interest in the Mahakam block for TEPI and Inpex. ?I think the minister did not say it must be 39 percent,? he said. Pertamina has previous insisted that it was only willing to allocate up to 30 percent interest in the block for TEPI and Inpex. The company also insisted on it holding the operatorship status in the upcoming new contract.
Average production at Mahakam block, which started production in 1974, currently stands at 1,635 mmscfd of gas, and 63,000 bpd of oil. TEPI and Inpex, which equally have 50 percent interest in the block started investment in 1966. (*)