Oil and Gas Production is Hard to Maintain

       Ahead of the transfer of management from Total E&P to PT Pertamina on January 1, 2018, oil and gas production in the Mahakam Block, East Kalimantan was difficult to maintain. Pertamina was allowed to be involved in managing the block early and started investing US$180 million in 2017. 

Total

    With the reference exchange rate of the Jakarta Interbank Spot Dollar Rate of Rp. 13,022 per US dollar, Pertamina's initial investment was Rp. 2.343 trillion. Currently, the Mahakam Block gas production is 1,747 MMSCFD, and oil and condensate are 69,186 barrels per day.

the Mahakam Block

    Next year, gas production is estimated to drop to around 1,400 million MMSCFD, while oil and condensate production is around 50,000 barrels per day. Because this block is old, there will be a decline in production. We have prepared anticipation by planning 19 drilling wells with a fund of 180 million US dollars in 2017. The drilling of 19 wells will start production in 2018 or when Pertamina begins to fully manage the Mahakam Block.

    The hope is that if the 19 wells are in production, the rate of gas and oil production in the Mahakam Block can return to normal. Hardy said that the decline in production in the future is very likely due to the nature of fossil energy. However, the rate of decline is not too significant. 

    According to him, next year's production figure can still be considered high. Asked about Total's commitment to being involved in the management of the Mahakam Block when Pertamina took over, Hardy stated that his party had not yet made a decision.

    It will still see the development of the situation and conditions. Pertamina offers a 30 percent stake for Total in the Mahakam Block. As for the participation share for the regions (East Kalimantan Province) of 10 percent, Jonan asked Pertamina to implement the regulation. 

    There are regulations regarding participation shares for the regions. I believe Pertamina has a commitment of 10 percent and it must be implemented. It will be handed over to the local government.

Blogger Agus Purnomo in SKK Migas

    Pertamina can be involved in the management of the Mahakam Block early after the signing of the amendment to the Mahakam Block contract between Pertamina and SKK Migas. In addition to the issue of contract amendments, the government has also revised the Regulation of the Minister of Energy and Mineral Resources Number 15 of 2015 concerning the Management of Oil and Gas Working Areas whose Cooperation Contracts will expire. 

    Starting January 1, 2018, Pertamina took over the Mahakam Block as the operator with majority share ownership. As of December 31, 2017, the Mahakam Block is still managed by Total (France) and Inpex Corporation (Japan).

The share ownership of each investor is 50 percent. Currently, Total acts as operator. Citing the SKK Migas website, the Mahakam Block covering an area of ​​2,738.51 square kilometers began production in 1974.

Kompas, Page-17, Wednesday, Oct 27, 2016