The process of transferring the management of the Mahakam Block oil and gas field from Total E&P Indonesie to PT Pertamina has been completed. The Minister of Energy and Mineral Resources, Ignasius Jonan, gave his approval for the amendment to the Product Sharing Contract (PSC) for the Mahakam block in East Kalimantan. Starting next year, Pertamina will be able to enter for investment.
The PSC amendment for the 2018-2038 period was signed by Pertamina Hulu Mahakam, a subsidiary of Pertamina, and SKK Migas. This change has become the entry point for Pertamina to carry out the transition process since 2017.
"The process of managing the Mahakam Block has been completed. The agreement has been signed and can be implemented immediately.
Jonan explained that currently, the production of oil and condensate from the Mahakam field has reached 69 thousand BPD. Meanwhile, gas production reached 1,747 mmscfd. He stated that Pertamina would immediately invest in it so that when it became an operator in January 2018, production would not decline.
Deputy Minister Arcandra added that before the signing was done, the two companies had repeatedly held workshops. Starting from the matter of technology transfer, licensing issues, to the Mahakam Block workers. On the 24th and 25th of November, he said, the Mahakam work program & budget (WP&B) has been finalized.
He said Total has been carrying out activities in the black goldfield since 1966 or for 50 years at the Iranian refinery. Pertamina, who proved its capacity to manage the Mahakam Block, Head of SKK Migas Amien Sunaryadi explained, the amendment to the Mahakam Block PSC was also supported by the revision of the Minister of Energy and Mineral Resources Regulation number 15 of 2020 concerning 15 oil and gas working areas whose contract terms would expire. This change became the basis and legal protection that Pertamina could incur operating costs in 2017.
This expenditure will be recognized as cost recovery in 2018. At that time the PSC (Pertamina) came into effect. Because it is still an investment, the 19 wells drilled by Pertamina are not for production. However, these wells were closed and opened in 2018 to maintain performance. Meanwhile, Total's six wells are still producing as usual. Pertamina president director Dwi Soetjipto explained that the investment for the 19 wells was prepared at USD 180 million or around Rp 2.3 trillion.
When asked about what guarantees were given so that there would be no decline in production, Dwi stated that there was actually a natural decline. His team already knew that and started preparing. If nothing is done, production will decrease.
In accordance with the projection, if you can enter early, the decline will not be too significant. After this, Pertamina Hulu Mahakam and Total will finalize the transfer of operatorship agreement (TOA) and bridging agreement. Both are expected to be completed by the end of November.
President Director of Total Hardy Pramono said next year's production might drop. Gas, for example, becomes 1.45 mmscfd. For oil, it also fell to 50 thousand BPD. Regarding the offer for Total to re-enter Mahakam with a share of 30 percent, there has been no decision.
The reason is that at this time the most important thing is the process of transfer of management so that production does not decrease. He stated that there would be further discussion before Total took up the offer to cooperate. Especially the discussion about terms and conditions.
Jawa Pos, Page-6, Wednesday, Oct 26, 2016
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