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Jakarta Post

Energy ministry inks new gross-split PSC for four blocks

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Thu, July 12, 2018   /   08:14 am
Energy ministry inks new gross-split PSC for four blocks Energy and Mineral Resources Ministry secretary-general Ego Syahrial. ( Ramdhani)

The Energy and Mineral Resources Ministry on Wednesday signed a 20-year production-sharing contract (PSC) worth US$148.4 million for operating four oil and gas blocks under the gross-split scheme, whose current contacts expire in 2019 and 2020.

Bula Block in Maluku, whose current contract will expire in 2019, will be operated by Kalrez Petroleum (Seram) Ltd.

The three other blocks, whose contracts will expire in 2020, are the Salawati, Kepala Burung A and Malacca Strait blocks. The first two blocks will be jointly operated by Petrogas Ltd and PT Pertamina Hulu Energi, a subsidiary of state-owned energy holding Pertamina, while another block will be operated by PT Imbang Tata Alam.

Through the deal, the government also received a total signing bonus of $5.5 million and 10 percent participating interest.

“We hope the deal could improve our [oil and gas] production amid the declining trend in reserves,“ ESDM secretary-general Ego Syahrial said in a press conference on Wednesday.

There are still three other blocks that are set to expire in 2020 Makassar Strait Block, South Jambi B Block and Brantas Block but there is no agreement yet on who will operate them.

ESDM oil and gas directorate general Djoko Siswanto said the South Jambi B and Brantas blocks were still stumbling upon internal issues and payment of signature bonus and performance bonds.

Meanwhile, Makassar Strait Block will go to the auction floor as the existing operators US firm Chevron, Pertamina and Sinopec had withdrawn their proposal to operate the block as they believed that it was uneconomical. (bbn)