PT Pertamina has prepared an investment fund of USD 180 million or equivalent to Rp. 2.33 trillion to drill 19 wells as part of the transition period for the takeover of the Mahakam Block in 2017.
Investments were made to maintain the block's production level after the Mahakam Block Production Sharing Contract amendment was made. On Tuesday (Oct 25), the Minister of Energy and Mineral Resources, Ignasius Jonan, gave his approval for the Amendment to the Production Sharing Contract for the Mahakam block.
This step was taken to maintain the continuity of oil and gas production during the transfer of management of the Mahakam Working Area. This profit-sharing contract amendment is part of the process of transferring the management of the Mahakam Block from Total E&P Indonesie to PT Pertamina (Persero).
As is known, Total's contract in Mahakam expires on December 31, 2017. Starting January 1, 2018, Pertamina becomes the new operator of the block which produces 1,740 MMSCFD of gas and 69,186 bpd of oil. Pertamina President Director Dwi Soetjipto said that the Mahakam Block amendment for the 2018-2038 period had to be carried out.
This step is also a way for Pertamina to make a good transition from 2017. This profit-sharing contract amendment, said Dwi, allows Pertamina to start the transition step in managing the Mahakam Block earlier. Namely as of January 1, 2017, with the aim of maintaining the production level of this largest gas-producing working area.
Next, we will have detailed talks with Total E&P Indonesie as the current operator to ensure the transition goes well. Dwi explained that Pertamina Hulu Mahakam had finalized the preparation of the 2017 Mahakam Block Work Program and Budget (WP&B).
Based on the WP&B, assisted by Total E&P Indonesie as the executor, Pertamina Hulu Mahakam has prepared drilling activities in 2017 with a target of 19 wells with an investment value of around USD180 million. So it is expected that natural gas production from the Mahakam Block can be maintained at around 1.2 BSCFD and condensate around 20,000 BCPD in 2018-2019.
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| Blogger Agus Purnomo in SKK Migas |
SKK Migas is preparing technical instructions for the implementation of Pertamina Hulu Mahakam WP&B with the principle of activities carried out by Total E&P Indonesie on a no-cost no-profit basis. With all costs and activities risks borne by Pertamina Hulu Mahakam.
The drilling well is targeted to start production on January 1, 2018. Pertamina Hulu Mahakam together with Total E&P Indonesie and Inpex Corporation is finalizing a management transfer agreement which includes a Transfer of Operatorship Agreement (TOA) and a Bridging Agreement (BA). The TOA which was signed by the parties on July 29, 2016, will be aligned with the amendments to the Mahakam Block PSC.
Meanwhile, a Bridging Agreement is required related to the assistance for the implementation of Pertamina Hulu-Mahakam activities by Total Indonesie in the 2017 period. We are targeting the completion of the Bridging Agreement and amendment of the Transfer of Operatorship Agreement by the end of November 2016.
Deputy Minister of Energy and Mineral Resources Arcandra Tahar said, in addition to the 19 wells drilled by Pertamina Hulu Mahakam (PHM/a subsidiary of Pertamina that will manage Mahakam) in 2017, Total also drilled 6 wells. Hopefully, it can take place according to the previously agreed plan.
The Mahakam Production Sharing Contract was signed between SKK Migas and PT Pertamina Hulu Mahakam on 29 December 2015 and will become effective on 1 January 2018. With this amendment, Pertamina will invest in drilling wells in the block on 1 January 2017.
Duta Masyarakat, Page-1, Wednesday, Oct 26, 2016
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