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Govt braces for big reimbursement from Mahakam, Jangkrik fields
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Rome-based energy firm Eni SpA has started gas production at the Jangkrik development project site in East Kalimantan. (Antara/M. Agung Rajasa)
T
he government is expecting bigger-than-estimated reimbursement claims this year from oil and gas contractors operating under the cost recovery scheme, especially ones managing gas-rich Mahakam and Jangkrik fields.
According to the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas), cost recovery claims amounted to US$4.87 billion in the first six months of 2017, or 46.4 percent of the full-year target stated in the state budget.
The biggest claim in the first half came from production costs worth $2.36 billion, followed by a depreciation component of $1.38 billion, which comprises claims from previous expenditures made by contractors before their fields came on stream.
“We still need to prepare for bigger cost recovery claims in around November or December,” SKKMigas head Amien Sunaryadi said on Thursday in Jakarta.
The biggest cost recovery claim, he continued, would come from the Mahakam field in East Kalimantan operated by France's Total E&P Indonesie (TEPI), which could reach $900 million following the end of the company’s contract this year.
“The cost recovery claim from the Jangkrik field would also be quite big, because it has been on stream [since May] and the operator is entitled to get a reimbursement for its previous expenditure,” Amien said.
The Jangkrik field, located in the Muara Bakau block in the Makassar Strait, is operated by Italian energy firm Eni SpA with a production rate of 450 million standard cubic feet per day (mmscfd) as of the first week of July. (ags)
