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Govt to award PSC to East Natuna contractors
The government will award a production-sharing contract (PSC) for the East Natuna gas field in Riau Islands this year after reviewing a consortiumâs proposal for the gas project, which is the largest in the region
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he government will award a production-sharingcontract (PSC) for the East Natuna gas field in Riau Islandsthis year after reviewing a consortium's proposal for the gas project, which isthe largest in the region.
Energy and Mineral Resources Minister Jero Wacik said in Jakarta on Tuesday that the request by the consortium for a five-year tax holiday was currently the final item to be discussed before issuing the PSC.
''It is very likely that the five-year tax holiday will be awarded to the contractor from 2024 to 2029,'' he said.
The East Natuna gas field is expected to begin production in 2024, with the estimation that it would take 10 years for the consortium members to explore the field.
The peak production for East Natuna is estimated to reach 4,000 million standard cubic feet per day (mmscfd) of gas for at least 20 years before supplies begin to decline.
The government's approval of the principal of agreement (PoA) signed by the consortium members ' state-owned oil and gas firm PT Pertamina, US-based ExxonMobil, France's Total SA and Thailand's PTT Exploration and Production (PTT EP) ' has been postponed several times.
The PoA was initially signed by the consortium's members in August 2011, when Malaysia's Petronas was still part of the consortium. Petronas was replaced by PTT EP last year.
The PoA, which relates to the development of the East Natuna field, formerly known as the Natuna D-Alpha block, is an essential step before the PSC for the block can be signed.
Initially, the Natuna PSC was due to be signed in October 2011, before it was postponed until mid-2012. It was then postponed again until November 2012 and, finally, to this year. The PoA must be approved by the finance minister.
The East Natuna block has total proven reserves of 46 trillion cubic feet (tcf), making it the largest gas reserve in Asia.
