Mahakam Block Contract Might be Terminated

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Friday, 03 February 2012 13:38

Written by Ferdi Hasiman

Mahakam Block Contract, Might be Terminated

JAKARTA, Indonesia Today – Vice Minister of Energy & Mineral Resources Widjajono Partowidagdo said Mahakam Block contract, currently co-owed by Total E&P Indonesie and Inpex, might be terminated before 2017.

Speaking to Indonesia Today at his office on Friday afternoon (3/2), the Vice Minister stated the block’s contract is also highly possible to be awarded to state-owned oil & gas company PT Pertamina.

“It (The block’s contract) may be terminated before 2017. Award to Pertamina? Yes, it is highly possible. Mahakam Block must be operated by national oil & gas, which is Pertamina. Pertamina can buy the share gradually, just like how they acquire Natuna D-Alpha,” the Vice Minister stated.

According to the Vice Minister, Pertamina got the largest portion of 41% in the block. Total E&P may enter the shareholding but not in the capability of majority shareholder nor operator.

“Local government is of course able to get participating interest, but only 10% shareholding,” he added.

PT Pertamina has since 2010 urged the government to give the block to Pertamina. Currently, the block, which estimated to have oil & gas reserves up to two billion barrels of oil equivalent (bboe) is operated by Total E&P Indonesie and Inpex Corp.

The block has approximately 1,100 oil & gas wells and around half of them are producing well. The block’s production is estimated at 2,300 mmscfd of gas from Delta Mahakam Block and targeted to boost it to 2,550 mmscfd by next 2013.

The contract for the block has been started since March 1967 for 30 years before later extended in 1997 for another 20 years.

Total has intended to extend the contract for further 25 years to 2042. “We have purposed for extension,” Public Affairs and Corporate Communication of Total E&P Indonesie Leo Tobing said previously. (ferdi@theindonesiatoday.com)

Mahakam Block Contract Terminated

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