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Economy in brief: Rokan contract to be signed this month
A new contract for the lucrative Rokan oil and gas block in Riau is set to be signed this month because the government wants to ensure a smooth transition period to avoid a decline in production
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new contract for the lucrative Rokan oil and gas block in Riau is set to be signed this month because the government wants to ensure a smooth transition period to avoid a decline in production.
State-owned oil and gas holding company Pertamina is set to operate the Rokan Block in August 2021 after being awarded the contract last year. United States energy giant Chevron had previously operated the block.
“Two weeks [from now], we will sign the contract,” Energy and Mineral Resources Minister Ignasius Jonan said recently.
The block is the country’s most productive with an average production of 207,000 barrels of oil per day (bopd). In December, Pertamina paid a signature bonus of US$784 million and 10 percent of $500 million of investment commitment to win the contract.
Once Pertamina kicks off its operation in Rokan, the company’s oil production will increase from 36 to 60 percent of the country’s total oil production.
Upstream Oil and Gas Regulatory Taskforce chairman Dwi Soetjipto said it was crucial for Pertamina to accelerate its investment to boost production in Rokan and it should learn from its failure to increase investment in the gas-rich Mahakam block in East Kalimantan.
