PT Pertamina prepared an investment US$1.5 billion to drill 257 wells at Mahakam Block during 2020 - 2022, said the director yesterday (07/11) - Photo by SKKMigas

JAKARTA (TheInsiderStories) – Indonesian energy holding company, PT Pertamina prepared an investment US$1.5 billion to drill 257 wells at Mahakam Block during 2020 – 2022, said the director yesterday (07/11). The projects is estimating needs an investment US$1.5 billion.

Upstream director Darmawan Samsu conveyed the plan during energy and mineral resources (EMR) minister Arifin Tasrif visited to the block owned by Pertamina Hulu Mahakam Field Development (OPPL) in East Kalimantan.

The unit is a contractor with the largest production number four in Indonesia with a block status is in the process of transitioning from an old operator Japan’ INPEX Corp.

Beside, Mahakam block, INPEX also will release its interests in Attaka Block located in East Kalimantan. Both of which are expired since last year.

As for the Attaka block, INPEX is in talks on the handover process both with the government and American oil producer US-based, Chevron Corp. With the decision, PT Total E&P Indonesie is likely to become private sector partner of Pertamina in developing the Mahakam Block under the new production sharing contract (PSC) scheme.

Total E&P has been operating the giant Mahakam Block for over 40 years, in partnership with INPEX (non-operating partner). The last contract extension was made in 1997. Effective Jan. 1, 2018, the state-owned oil and gas company controlled the site from current operator French petroleum company, Total S.A.

Previously, former EMR minister, Sudirman Said, decided to give maximum of 30 per cent participating interest in the Mahakam block under the new PSC scheme. Then his successor, Ignasius Jonan has agreed the share down of Mahakam block as much as 39 percent.

Special Task Force for the Upstream Oil and Gas Business Activities (SKKMigas) places great attention on the Mahakam block, as one of the backbone of national oil and gas production. The agency continues encouraged Pertamina to increase exploration and new drilling activities in the site.

In 2019, Pertamina drilled 121 wells, exceeding the initial target of 118 wells. The producer’ efforts to increase oil production in the block throughout 2019 have begun to reap results with an increase in production from an average of 16,000 barrels oil per day (bpd) to 17,000 bpd.

Head of SKKMigas Dwi Soetjipto, reiterated that there is great potential in the Mahakam Block. The site has potential of gas reserves 10 trillion cubic feet (TCF) or more than 5 times the existing reserves.

In addition, the availability of supporting infrastructure, such as LNG plant in Bontang, so that any production results in the Mahakam block can be quickly monetized.

by Linda Silaen, Email: linda.silaen@theinsiderstories.com