The Mahakam block contract was managed by Total E&P Indonesie from 1967. It was extended in 1997 for 20 years, until 2017.Jakarta (ANTARA News) - PT Pertamina (Persero) has prepared Rp315 trillion (US$25,2 billion) to operate the Mahakam block in East Kalimantan for 20 years after 2017, Energy and Mineral Resources (ESDM) Minister Sudirman Said stated.
"The government believes that Pertamina will be able to operate the block," Minister Said noted here on Monday.
The Mahakam block contract was managed by Total E&P Indonesie from 1967. It was extended in 1997 for 20 years, until 2017.
According to Article 28 (Verse 9 and 10) of Government Regulation No. 35/2004, Pertamina can propose to the ESDM minister to take over oil and gas blocks after its contracts with foreign operators end. The minister can approve the request as long as Pertamina is fully owned by the state.
In order to ease the transition process, regular dialogues were carried out between the ESDM ministry, Pertamina, and Total from November 2014 until February 2015.
"The government acts as a facilitator. Im sure Total has wider interests to develop other blocks," the Minister said.
The government will make its final decision on the gas block by mid March.
"It will award Pertamina a 30-year contract as the Mahakam block will be given the status of a new block after 2017," Head of the Performance Control Unit of the ESDM Widhyawan Prawiraatmadja pointed out.
He remarked that Pertamina can decide whether or not to invite Total to take part in the operations of the block.
Prawiraatmadja further noted that the option to involve Total could be considered for a swap deal: that Pertamina should get a stake in Totals projects abroad.
He explained that a contract between Pertamina and Total can be signed in 2015 although it will become effective only after the end of Totals contract in 2017.
"That will give Pertamina a long transitional period before taking over the operation of the block from Total," Prawiraatmadja observed.(*)
Editor: Heru Purwanto
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