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ConocoPhillips, Pertamina, Repsol eye mega gas block Corridor
Three energy giants, namely the current operator United States-based energy firm ConocoPhillips Indonesia (COPI), state energy holding company Pertamina and Spanish energy company Repsol, are eyeing the operations of South Sumatra’s Corridor Block, the contract of which is set to expire in 2023
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span>Three energy giants, namely the current operator United States-based energy firm ConocoPhillips Indonesia (COPI), state energy holding company Pertamina and Spanish energy company Repsol, are eyeing the operations of South Sumatra’s Corridor Block, the contract of which is set to expire in 2023.
The block’s new contract will see the cost recovery scheme converted to the gross split scheme.
Newly appointed chairman of the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas), Dwi Soetjipto, said on Tuesday that his team was evaluating the proposals and would come up with a final decision next week. “Three energy firms have shown big interest [in the Corridor Block] and hopefully next week we will have the decision,” he said.
The Corridor Block is one of the three blocks with contracts that the government has vowed to finalize before year-end, said Deputy Energy and Mineral Resources Minister Arcandra Tahar on the same day.
“[By year-end] we will close the deals for the Jabung, Rimau and Corridor blocks,” he said. The contract of all three blocks are set to expire in 2023.
During his inauguration as the new chief of SKKMigas on Dec. 3, Dwi pledged to speed up a number of pending matters, including the finalization of expiring contracts, which is under the authority of SKKMigas.
The former Pertamina president director also received a special instruction from Energy and Mineral Resources Minister Ignasius Jonan to ensure the smooth transition from the cost recovery to gross split scheme.
As of Tuesday, the contracts of at least 30 blocks have been converted to the gross split scheme, which was introduced in January 2017. The latest blocks that have had their contracts converted to the gross split scheme are East Sepinggan Block in East Kalimantan and Sengkang Block in South Sulawesi.
However, it is still unclear whether Repsol is proposing to be the sole contractor or whether it would draw up a partnership with COPI, a scenario that was previously revealed by the Energy and Mineral Resources Ministry’s director general for oil and gas, Djoko Siswanto, in September.
“Pertamina wants to be the single operator of the Corridor Block, while ConocoPhillips and Repsol have agreed to set up a partnership,” he said at the time.
Repsol is not a new player in the block. It holds 36 percent participating interest in the Corridor Block, along with Pertamina at 10 percent and COPI at 54 percent.
Data from SKKMigas made public in June shows that gas lifting at the Corridor Block averaged 841 million metric standard cubic feet per day (mmscfd), exceeding its full year target of 810 mmscfd.
Corridor’s gas lifting was only below Pertamina’s Mahakam Block in East Kalimantan averaging 916 mmscfd and British energy firm BP’s Tangguh gas project in Papua at 1,049 mmscfd.
SKKMigas forecasted in June that until year-end, Corridor Block’s gas lifting will stand at an average of 798 mmscfd.
According ConocoPhillips’ official website, the block is located in South Sumatra and covers a contract area of 2095 square kilometers. The production sharing contract was awarded in 1983 and expires in 2023, a 40-year contract under the cost recovery scheme.
The block comprises two onstream oil fields and seven natural gas fields. The oil-producing fields are Suban Baru and Rawa, and the principal gas fields are Suban, Sumpal and Dayung.
Furthermore, natural gas production from the block is mostly sold under long-term contracts to Singapore as well as the domestic market, to companies such as Singapore’s Gas Supply Pte. Ltd., PT Chevron Pacific Indonesia and state-owned PT Perusahaan Gas Negara, according to Repsol and ConocoPhillips’ official websites.
Djoko assured that Corridor Block’s new contract would not affect existing gas sales and purchase agreements, saying that all agreements will be honored until the end of each contract.
