The Jakarta Post
The government extended on Friday the operatorship of the existing operator of the Brantas Block, Lapindo Brantas Inc, until 2040, after a delay caused by an administrative matter, namely the payment of a signature bonus and performance bonds.
The Energy and Mineral Resources Ministry’s Oil and Gas Director General Djoko Siswanto said during a press conference that the company won the deal with a signature bonus of US$1 million and a five-year firm working commitment worth $115.5 million.
“We hope that the contractor can increase production at the block, but with deep consideration for the safety issue,” he said.
Djoko emphasized the importance of safety because the Brantas Block, which is located in Sidoarjo, East Java, was hit by a catastrophic mudflow in 2006, forcing 10,000 locals to abandon their homes.
“We expect there will be new exploration at offshore areas,” Djoko added.
The new contract will take effect on April 20, 2020 and is under the gross-split scheme, with the government’s share 53 percent for oil and 48 percent for gas.
Lapindo Brantas Inc. president director Faruq Adi Nugroho said gas production at the block stood at 20 to 25 million standard cubic feet per day (mmscfd) and could be increased to 35 mmscfd by the end of the year.
“Based on our plan, after five years, gas production will be around 150 mmscfd,” he said, adding that the company supplied the gas mainly to Pertagas, a new subsidiary of state-owned gas subholding company PGN. (bbn)