PT Pertamina is preparing an investment of US$ 180 million in the transition period for the Mahakam Block management after obtaining certainty through an amendment to the production sharing contract for the working area.
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| Blogger Agus Purnomo in SKK Migas |
The amendment was signed by Pertamina's subsidiary, PT Pertamina Hulu Mahakam (PHM), SKK Migas, Tuesday (Oct 25). Pertamina President Director Dwi Soetjipto said the amendment was a way for the company to enter the Mahakam Block starting next year. The previous Production Sharing Contract/PSC was signed on 29 December 2015 and will become effective on 1 January 2018.
This PSC amendment allows Pertamina to begin the transition to the Mahakam Block management earlier, namely as of January 1, 2018, with the aim of maintaining the production level of this largest gas-producing working area.
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| Total Oil |
Dwi revealed that PHM had compiled the 2017 Mahakam Block Work Program and Budget/WP&B and was being finalized. Based on the WP&B, assisted by Total E&P Indonesie (TEPI) as the executor, Pertamina Hulu Mahakam is preparing for drilling activities next year with a target of 19 wells with an investment value of around US$ 180 million.
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| Inpex Corporation |
PHM together with TEPI 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 29 July 2016 will be aligned with the Mahakam Block PSC amendment, while the BA is required in relation to Total assistance in the implementation of PHM activities in the 2017 period.
The Minister of Energy and Mineral Resources, Ignasius Jonan, explained that the amendment must indeed be carried out to provide legal certainty in the transition period of Mahakam Block management.
This amendment can also maintain the continuity of oil and gas production as well as provide legal certainty in the implementation of activities during the transfer of operation of the Mahakam block working area from the existing contractor Total Indonesie to Pertamina.
Head of SKK Migas Amien Sunaryadi said the amendment would allow PHM to spend on operational costs. The expenditure will be recognized as part of the 2018 cost recovery.
President & General Manager of TEPI Hardy Pramono added that the transfer of management is the most important thing at this time. The goal is to prevent a drastic decline in oil and gas production. The point is how to keep decline to a minimum. Six wells were drilled for 2017 and 19 wells were drilled for Pertamina.
Bisnis Indonesia, Page-15, Wednesday, Oct 26, 2016
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