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Jakarta Post

Pertamina wins lucrative Rokan Block contract

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Wed, August 1, 2018   /   09:39 am
Pertamina wins lucrative Rokan Block contract Deputy Energy and Mineral Resources Minister Arcandra Tahar (Kompas.com/Wisnu Widiantoro)

The government has picked state-owned oil and gas firm Pertamina to operate the country’s most productive oil block, Rokan Block in Riau, after PT Chevron Pacific Indonesia’s (CPI) operatorship contract expires in 2021.

Deputy Energy and Mineral Resources Minister Arcandra Tahar said on Tuesday that the proposal made by Pertamina was “much better” than the one made by CPI, the local unit of United States energy firm Chevron.

He said the government’s assessment was based on four factors — the size of the signature bonus, a five-year working commitment, the government’s take of the block’s revenue and the split demanded by the applicants.

Insya Allah (God willing), the potential revenue [from the block] will benefit us all and I want to congratulate Pertamina, which will operate Rokan Block until 2041,” he said adding that the Rokan Block would be operated under a gross split scheme.

Pertamina promised a US$784 million signature bonus, a $500 million five-year working commitment covering exploration activities and $57 billion in potential state-revenue over a 20-year period.

Arcandra, however, did not disclose the details of Chevron’s proposal, but assured that the decision was based on technical considerations rather than nationalistic sentiment.

“We want to thank Chevron as they have operated the block [for at least 50 years] and I hope that Chevron will continue to be interested in investing in Indonesia,” he said.

Data from the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) in April showed that Rokan Block’s oil production stood at 210,280 barrels of oil per day (bopd) while its gas production was 24.26 million cubic feet per day (mmcfd). Meanwhile, its recoverable reserves are estimated to stand between 500 million to 1.5 billion barrels of oil equivalent (boe). (bbn)