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Pertamina to have majority stake in Mahakam block
The Energy and Mineral Resources Ministry has decided in principle to make PT Pertamina a major shareholder in the valuable Mahakam block
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he Energy and Mineral Resources Ministry has decided in principle to make PT Pertamina a major shareholder in the valuable Mahakam block.
The head of the performance controlling unit at the ministry, Widhyawan Prawiraatmaja, said on Friday that a definitive decision on the Mahakam block would be taken soon.
'The spirit is to give the block to Pertamina and we hope that Pertamina will consider whether it will cooperate with Total [Total E&P Indonesie],' Widhyawan said.
He added that the Ministry was currently waiting for Pertamina to submit its proposal to convince the government that its operatorship of the Mahakam block would be to the utmost benefit of the country.
'The percentage of its [Pertamina's] majority share is now between Pertamina and Total. Also, we hope they settle it with consideration of the principle of fairness -- for example, Pertamina could have working areas overseas if Total still has shares in the blocks,' Widhyawan said.
The production sharing contract (PSC) of the Mahakam block was signed in 1967 and was extended in 1997 for a 20-year period. Thus, the contract will expire in 2017. The fate of the Mahakam block has been a sensitive issue amid growing demands for a bigger national-company role in handling valuable resources in Indonesia.
Total is currently the operator of the bock and holds 50 percent ownership. Meanwhile, the remaining shares are owned by INPEX. The block is currently producing gas at a rate of around 1.7 billion cubic feet (bcf) and condensate at a rate of around 69,000 barrels of oil equivalent per day. (hhr)(++++)
