State-owned oil producer, PT Pertamina Obtain participating interest (PI) of 30 percent through its subsidiary on the Corridor Block 2026.

JAKARTA (TheInsiderStories) – United States-based energy company ConocoPhillips (NYSE: COP), PT Pertamina Hulu Energy, and Talisman Ltd., on Monday (11/11) signed a contract extension for the gross split of the Corridor block in South Sumatra, which will be valid for 20 years, effective from 2023 to 2043.

The Corridor natural gas block contract is an extension contract with interest participation holders of ConocoPhillips at 46 percent, state-owned holding company Pertamina 30 percent and Talisman by 24 percent with ConocoPhillips as the operator.

The investment value from implementing the first five-year work commitment is US$250 million and the signature bonus of $250 million. Participation interests owned by the contractor include 10 percent that will be offered to regionally owned enterprises in accordance with the energy minister regulation No.37 of 2016.

“We have instructed contractors to maintain and increase production rates in the Corridor block, carry out the commitments contained in the contract and growing exploration activities to increase oil and gas reserves,” said energy and mineral resources minister Arifin Tasrif who witness the contract signing.

ConocoPhillips will operate the block until 2026 before starting to transfer operatorship to state-owned Pertamina, the minister said, adding there was no set timeframe for the transfer.

“After a reasonable length of the transitional period, ConocoPhillips will transfer operatorship to Pertamina,” he said, adding the arrangement was a “win-win” as the US company would have been operating the block for 40 years by 2023.

The Corridor natural gas block is Indonesia’s second-largest gas-producing block, with 827 million standard cubic feet per day (mmscfd) of gas lifting in the first semester this year, according to upstream oil and gas regulator, higher than the 810 mmscfd targets.

Under the new contract, the contractors will have 53.5 percent of the gas produced from the block and 48.5 percent of the oil, Tasrif said, adding the government is aiming to sign the production sharing contract, which will be under a gross split scheme, within a month, following payments of financial obligations to the government.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com