Pertamina May Get Operating Rights for Mahakam Oil, Gas Block

Pertamina is likely to get the operating rights for the Mahakam oil and gas block in East Kalimantan when the current contract expires, Jakarta Globe said citing a top government official. Total E&P Indonesie currently holds the rights which expire in 2017. 

The Indonesian state owned firm could get 70 per cent stake in the Mahakam block, which contains 12.5 trillion cubic feet of natural gas, the newspaper said. 

“The exact number is still being discussed, but for sure the government wants a 51 percent stake, at least, and the regionally-owned enterprises would have some too,” the deputy minister added. The government, however, will not grant Pertamina a 100 percent stake as the firm will need other private investors to develop the block, he added. 

Regarding the development of Mahakam block, Rudi said the current contractors, Total and Inpex, can still participate even after 2017 to ensure the transition period is smooth. 

He said the government has yet to decide whether Pertamina will assume the operating rights directly after the contract ends in 2017. Alternatively, the current holders may remain the operators for a few more years beyond that date. 

Pertamina president commissioner Sugiharto said that although the firm has asked for the Mahakam project, it will conduct a thorough risk assessment before deciding to assume operating rights. 

Sugiharto was optimistic that Pertamina possessed the capability to operate Mahakam gas block, though he noted that there are no large oil and gas blocks that are being handled by a single operator, Jakarta Globe said.