Special Taks Force for Upstream Oil and Gas Business Activities (SKKMigas) urged the Spanish oil and gas producer, Repsol S.A., to immediately meet the target of submitting a Plan of Development of the Kaliberau 2 Well project in Sakakemang Block, Musi Banyuasin, South Sumatra - Photo by Repsol

JAKARTA (TheInsiderStories) – Special Taks Force for Upstream Oil and Gas Business Activities (SKKMigas) urged the Spanish oil and gas producer, Repsol S.A., to immediately meet the target of submitting a Plan of Development of the Kaliberau 2 Well project in Sakakemang Block, Musi Banyuasin, South Sumatra. The development of the project is hampered by regulations regarding the decline in industrial gas prices.

In a statement released on Thursday (08/13), the agency asked the company to meet the POD in this year even did not agree on a gas selling price of US$6 per million british thermal units (MMBTU). Repsol, as the operator of the oil and gas block, not agreed with the gas selling price.

The upstream oil and gas regulator said, will find solutions so that the project can be profitable for contractors. In addition, SKKMigas also encouraged Repsol to be as efficient as possible so that the selling price of gas can be in accordance with government regulations.

Previously, deputy of SKKMigas, Arief Handoko, said Repsol asked that the price of gas be sold above $7 per MMBTU. In fact, the government has reduced the gas price for the industrial sector to a maximum of $6 per MMBTU.

The Sakakemang block, has planned to operate as early as 2023. The discovery of new gas reserves in the Kaliberau is estimated to have a potential of approximately 2 trillion cubic feet, which is the best finding in oil and gas exploration in Indonesia in 18 years.

This finding made Repsol to carry out the second drilling in the Sakakemang Block on August 20, 2018 with the assistance of two other consortium members, namely Malaysia’ Petroliam Nasional Bhd (Petronas) and Japan’ Mitsui Oil Exploration.

Last year, Petronas through its unit Petronas Andaman III Indonesia has acquired 49 percent participation interest (PI) of Talisman Andaman, a unit of Repsol in Andaman III block. Andaman III is located in off the coast of Aceh and operated by Repsol with participation interest of 51 percent. Talisman had won the block in 2009 before Repsol acquired them in 2015.

They will also cooperate with Aceh’ Oil and Gas Management Board and Repsol to develop oil and gas industry in Aceh.

As reported, Repsol intends to drill the first wells in Andaman III block in fourth quarter of 2020. The target is longer than previous schedule due to the delay of drill tools shipment in October of this year.

The projects have the potential to unlock a new material gas supply for the domestic consumption in North Sumatra and potentially long-term export to regional markets.

Written by Editorial Staff, Email: theinsiderstories@gmail.com