http://www.thejakartaglobe.com/business/indonesia-to-decide-on-mahakam-block-total/566118
Indonesia to Decide on Mahakam Block: Total Tunggadewa Mattangkilang | January 18, 2013 The decision on who will handle the lucrative Mahakam gas block in East Kalimantan after the contract expires in 2017 rests in the hands of the government, a senior official at Total Indonesie, one of the block’s operators, said on Thursday. . Total Indonesie and Japanese Inpex each control a 50 percent stake in the block and their rights to operate the block will expire in 2017. The government has the right to extend the contract or assume full control of the block and hand it over to another firm. State energy company Pertamina is tipped to take over the operations. Think-tank Indonesian Resources Studies (IRESS) had initiated a petition demanding the government hand over Mahakam to Pertamina. Lawmakers, former government officials and leading oil and gas experts are among the petition’s signatories Denying rumors that the local outfit of French oil firm Total is in a tug-of-war with Pertamina, Total vice president Arvidya Noviyanto on Thursday said that the company was still waiting on the government decision on the fate of the block’s operators after 2017. Referring to one of the fields in the Mahakam block that Pertamina and Total operate together, he said that Total has established good working relations with Pertamina. “It’s up to the government. What happens now is that the government has instructed us, Inpex and Pertamina as well as the local governments to determine the amount of each participating interest in the block,” Arvidya said. There are two options: first Pertamina and the local governments will get 51 percent while the remaining 49 percent will go to Total and Inpex. The second option would be for Total and Inpex to get 33 percent each while Pertamina has the upper hand with 34 percent interest. Arvidya also claimed that the estimated reserves after the contract expired would be at around 2 trillion cubic feet [tcf] not 12 tcf as many have claimed. Currently the reserves of the Mahakam block is 5.8 tcf, Arvidya added. “Our daily production is between 1,500 million metric standard cubic feet per day (mmscfd) and 1,600 mmscfd, meaning that our annual production is between 1.5 tcf and 1.6 tcf. Thus, there will be only 2 tcf left in 2017,” he said. Arvidya claimed that Mahakam’s production passed its prime during the second half of last decade and production has declined since 2011. “Since [it went on stream] in 1974 until 2011, 75 percent of Mahakam’s reserves had been extracted.” Total inaugurated on Thursday the development of South Mahakam, in which the firm plans to invest $830 million. [Non-text portions of this message have been removed]
