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Jakarta Post

Corridor Block's three contractors to maintain roles after 2023

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, July 23, 2019   /   03:17 pm
Corridor Block's three contractors to maintain roles after 2023 Energy and Mineral Resources Minister Ignasius Jonan (left) and Deputy Minister Arcandra Tahar. (Antara/ Rivan Awal Lingga)

The Energy and Mineral Resources Ministry has given assurances that the three existing operators at the Corridor Block in South Sumatra will continue to play their respective roles after their contracts expire in 2023, even after state-owned holding company Pertamina takes over operations.

Energy and Mineral Resources Deputy Minister Armanda Tahar said there would also be changes to the composition of the block's participating interest.

"Pertamina Hulu Energi (PHE) Corridor will get 30 percent, ConocoPhillips will get 46 percent and Repsol will get 24 percent," he said in a statement announcing the expiration of the contracts in Jakarta on Monday.

He said 10 percent of participating interest owned by PHE Corridor would be distributed to a region-owned enterprise.

Currently, ConocoPhilips has a 54 percent stake of the block, Repsol Energy has 36 percent and the rest is owned by state-owned energy holding company Pertamina, including 10 percent in participating interest.

Energy and Mineral Resources Minister Ignasius Jonan said the government would not issue any rulings in the transition period.

“It is up to them. [Decisions will be made] after they discuss business and find time to hand over [operations] to Pertamina,” Jonan said as quoted by kontan.co.id, adding that the next contract would last for 20 years starting Dec. 20, 2023 under a cross-split scheme.

ConocoPhillips Indonesia president and general manager Bij Agarwal said the company was committed to helping out in the transition period. “The three of us agree in what we think is good. With our 40 years of experience, we will help Pertamina,” he said.

Pertamina president director Nicke Widyawati said the involvement of the three companies in the Corridor Block would minimize production drop risks in the transitional period.

Though the government had made an announcement on the operator of the Corridor Block, the agreement had not been signed, as a payment of US$250 million in investment commitments and a signature bonus was pending, Jonan said.

As of June, the block was the second-biggest gas producer with 827 million metric standard cubic feet per day of gas or 148,000 barrels of oil equivalent per day. (bbn)