PT Total E&P Indonesie, operator of the Mahakam Block, will start drilling oil and gas wells in the block starting in March 2017 which includes the PT Pertamina Hulu Mahakam (PHM) program, a subsidiary of PT Pertamina.
Pertamina Hulu Mahakam will be the operator of the Mahakam Block starting January 1, 2018, replacing the Total E&P Indonesie. Next year will be a transition period for the management of the oil and gas block located in East Kalimantan.
During the transition period, Pertamina began to invest in anticipating that oil and gas production in the block would not decline. Vice President Finance, General Services, HR & Communications of Total E&P Indonesie Arividya Noviyanto said, Total will drill nine wells, while 19 wells will be drilled on behalf of PT Pertamina Hulu Mahakam (PHM) as the new operator of the block located in East Kalimantan.
PT Pertamina Hulu Mahakam (PHM) will become the operator of the Mahakam Block starting January 1, 2018. Total will maintain activities in the Mahakam Block until October 2017 to maintain production stability in 2018 after the operator changes.
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| The Mahakam Block |
The oil and gas well drilling activity in early March was under the program of PT Pertamina Hulu Mahakam, but Total E&P Indonesie was working on it. Gas production in the Mahakam Block this year is targeted to reach 1.43 billion cubic feet per day (BCFD) and 56,000 barrels per day (BPD) of oil and condensate. Currently, the realization of gas production reaches 1.67 BCFD and 64,000 bpd of oil and condensate.
This achievement came from activities carried out in several fields such as Peciko 7B, Bekapai Phase 2 as well as Sisi Nubi ZB. According to him, the contribution from the field allows oil and gas production to be maintained until the end of this year with the realization of an investment of US$ 900 million. For next year's investment plan, he said the process of discussing the 2017 Work Program and Budget/WP&B has not been completed.
The challenge for field development is the low price of oil which has not had a significant impact on the selling price of gas. The reason is, he said gas prices will usually show changes after three to six months of changes in oil prices. The transition period of management from Total to Pertamina and the age of the block which has reached 50 years is a challenge for operators.
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| Blogger Agus Purnomo in SKK Migas |
However, based on data on oil and gas production targets ready for sale or lifting in 2017 from the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), the contribution of oil and condensate to Total E&P Indonesie Mahakam Block is 52,852 BPD and gas 1,164 MMscfd. Arividya admitted that Mahakam's oil and gas production could be affected by the shift of operators. However, he hopes that the target can be achieved even though next year's production activity in the Mahakam Block is lower than this year.
Bisnis Indonesia, Page-30, Friday, Dec 9, 2016.
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