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Total demands certainty on Mahakam block
Oil: A processing unit at Total E&P Indonesie in Senipah, Kutai Kartanegara, East Kalimantan on Thursday
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span class="inline inline-none">Oil: A processing unit at Total E&P Indonesie in Senipah, Kutai Kartanegara, East Kalimantan on Thursday. The Senipah-Peciko-South Mahakam (SPS) Processing Unit, which is part of the Mahakam Block, can process oil and gas. Its export capacity is six cargoes per month with each cargo containing up to 200,000 barrels. (Antara/Yudhi Mahatma)
As Total E&P Indonesie’s contract to develop the Mahakam block in East Kalimantan will expire in 2017, Total’s subsidiary has urged the government to provide assurance on whether they can continue their operations at the gas-rich block.
Total E&P Indonesie president director Elisabeth Proust said on Thursday that the firm, currently the biggest gas producer in Indonesia, was hoping that the government would decide the fate of the Mahakam block “as quickly as possible”.
“We have high hopes that the government will come to a decision on whether our contract for the Mahakam block will be extended after 2017,” she said on the sidelines of the inauguration ceremony of the South Mahakam block in Kutai Kartanegara, East Kalimantan.
The South Mahakam oil and gas field is a part of the Mahakam block’s production sharing contract (PSC), in which Total is both the operator and stakeholder. Japan’s Inpex also holds a stake in the contract.
Total officially kicked off the South Mahakam project on Thursday after three years of development with an investment of US$830 million to build three new platforms as well as drilling at least 19 oil and gas wells.
The block, located around 35 kilometers southeast of Balikpapan, East Kalimantan, offshore with a depth of between 45 to 60 meters, is expected to produce gas of around 69,000 barrels of oil equivalent per day (boepd) by the end of this year.
The estimated output also comprises 18,000 barrels per day (bpd) of condensates, according to Total E&P Indonesie’s data.
Despite having allocated $1.2 million to drill 100 oil and gas wells this year, Total E&P Indonesie’s future operations at the Mahakam block remains unclear as the government has yet to decide on the block’s fate.
Several groups and individuals behind the surprising elimination of upstream oil and gas regulator BPMigas in November of last year have been demanding for the government to hand over the block to state-owned oil and gas firm PT Pertamina.
Meanwhile, East Kalimantan Governor Awang Faroek Ishak, who also attended the South Mahakam project’s kick-off ceremony, expressed that he had wished for the central government to independently develop the Mahakam block in the future, without Total’s involvement.
“This is what society hopes for and it is my job to voice it publicly,” he said.
Amahl S. Azwar also contributed to this story from Jakarta.
