Pertamina to Expedite Mahakam Block Takeover

Indonesian Version

 
Robert Sidauruk, Kartika L Makmur
 
With only few days remain for Pertamina to take over the management of the Mahakam block from PT Total E&P, the Ministry of Energy and Mineral Resources (ESDM) has requested it to submit its final management proposal by the end of February.
 
I. Gusti Nyoman Wiratmadja, Director General of Oil and Gas from the Ministery explained that Pertamina must commence its management of the Mahakam block as soon as possible, particularly considering the decline in the block’s output. By starting immediately, Pertamina can prevent the natural decrease in oil and gas production from the block.
 
Mr. Wiratmadja said that the natural decline from the Mahakam block is around 10 – 20 percent, and if the block is neglected for a year, gas production from the block will decrease another 20 percent.
 
Considering these circumstances and to mitigate the production decrease and avoid investment uncertainty, the government is expecting Pertamina to submit its proposal submission and start taking over the block.
 
“If Pertamina takes over the management within this month, the decrease in gas lifting will be prevented,” says Mr. Wiratmadja in Jakarta last Friday.
 
In response to the government’s request, Dwi Soetjipto, Pertamina’s President Director, assured that his company will deliver the proposal by the end of this month. At present, the proposal is currently being reviewed by the board of directors, and the board of commissioners is expected to discuss the proposal next week.
 
Although there are still work to do, Mr. Soetjipto is confident that the proposal can be submitted by the requested time. He further indicated that discussion at the board of commissioners should not require much time and the proposal is scheduled to be delivered earlier than the initially planned April.
 
“The proposal will be presented by the end of February, earlier than was planned in April”, added Mr. Soetjipto.
 
To efficiently manage the Mahakam block, Mr. Soetjipto indicated that Pertamina is open to joint operations with any competent party. This includes the possibility to engage in joint exploration with Total E&P considering its experience and familiarity with the block.
 
In regard to the regional government’s participation, Mr. Soetjipto could not make any guarantees about the applicable profit-sharing scheme. He further said that there has been no communication initiated with the regional government on profit-sharing and participation rights.
 
“We are currently waiting for discussion on the regional government’s participation, but the most important thing is to expedite the takeover of the Mahakam block,” added Mr. Soetjipto.
 
(hot/kc)