The Jakarta Post
State-owned energy giant Pertamina has taken over Indonesia’s largest gas block Mahakam from France’s Total E&P Indonesie and Japan’s Inpex Corporation, with a pledge to curb its declining production rate in the future.
The move, carried out through Pertamina’s subsidiary PT Pertamina Hulu Indonesia (PHI) right after the new year, ends the tenure of the two foreign companies operating the block since Oct. 6, 1966.
However, the actual transfer process already began on March 13, 2017 when Pertamina signed bridging and funding agreements with its two counterparts. Consequently, it was allowed to carry out drilling activities to maintain continuity and production of Mahakam block.
“As of today, we have drilled 14 wells and aim at completing the 15th well in the next few days,” Pertamina upstream business director Syamsu Alam said in a statement on Monday.
PHI has allocated US$1.7 billion for the development of the Mahakam block in 2018, including plans to drill 70 wells in total.
The firm is seeking to produce 42,010 barrels of oil per day (bopd) and 916 million standard cubic feet per day (mmscfd) of gas from Mahakam throughout 2018, down from the average of 52,000 bopd and 1,360 mmscfd of gas as of November 2017.
Earlier in November, PHI president director Bambang Manumayoso said the block’s declining rate had reached 51 percent annually and the firm expected to reduce the rate to around 20 to 25 percent per year in the future. (lnd)