Total still hopes 5-year transition period for Mahakam
Friday, March 6 2015 - 01:06 AM WIB
French firm Total EP Indonesie (TEPI) still hopes there will be a 5-year transition period for the Mahakam block after the contract on the block expires on Dec.31, 2017, but the firm will fully abide with any decision that will taken by the government, according to a top official of TEPI.
?The transfer of operatorship is a delicate matter. We must continue the successful story of the Mahakam block,? President Director/GM of TEPI Hardy Pramono said in Jakarta, on Thursday.
It has been announced that the government will make a decision on the Mahakam PSC extension in the coming weeks.
According to Hardy, whatever the content of the decision and its long term effects, TEPI has proposed to the government to implement a 5-year transition period to allow a smooth transfer of operatorship from Total to state owned oil and gas firm PT Pertamina (Persero), to secure the investment which is necessary to maintain the production profile of the block for the coming years, and to guarantee the gas delivery commitments to both international and domestic buyers.
?During this transition period, Total would put in place a comprehensive program to transfer to Pertamina its know-how on the field, and to let Pertamina become the operator of this very complex Mahakam set of fields.
?This would include extensive efforts operability management system on human resources development and training, transfer of competencies in the latest technologies and the assistance to build a center of expertise which would eventually support all Pertamina operated activities.
?Total has experience in such a process as this was achieved for instance some years ago for transferring the operatorship of Bongkot field to PTTEP (national oil company of Thailand),? he explained.
He said, Total aims to take opportunity to build a partnership with Pertamina, on the model of what was done with PTTEP and other companies. Part of the program would allow Pertamina to have access to assets presently owned by Total outside of Indonesia, hence to develop internationally.
?Mahakam production has still a long life ahead of it, but it needs to be taken care of carefully: natural production decline can reach as much as 60 percent per year if sustained development works, which need to be planned well in advance, are slowed down. Total only aims is to make sure that the successful story of Mahakam field will continue and to offer support to the government and Pertamina for managing this delicate transition while maximizing the oil and gas revenues for Indonesia,? Hardy said.
Editing by Johannes Simbolon