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Pertamina reviews previous board assessment on Block Mahakam

JAKARTA (Rambu Energy) – The new board of state owned oil and gas company PT Pertamina said it will review a study undertaken by previous board of the company over its interest to develop Mahakam Block.

The block is currently operated by Total E&P Indonesie along with its non-operator partner Inpex Corp of Japan. The existing contract will expire at end of March 2017. Total and Inpex have expressed interest to extend the PSC contract, but will let the government to make decision. The operator has proposed a transition period, should the government opted to change the operator.

“We will review it, we’ll see what would be the result (of the review),” newly appointed Pertamina President Director Dwi Soetjipto was quoted by Bisnis Indonesia as saying.

Soetjipto said once the review is completed, Pertamina will make decision whether to operate the block on its own or collaborating with the existing contractor, Total E&P Indonesia.

The government is yet to make a formal decision on the fate of the Mahakam Block contract, but favors Pertamina to become the operator.

The Head for Control Unit of the Energy and Mineral Resources Ministry (ESDM) Widhyawan Prawiraatmadja said earlier that the contract has not been made yet, however, the spirit is awarding the block to Pertamina.

Sudirman Said, the Energy and Mineral Resources Minister (ESDM), said earlier that for government, the most important thing for the government is that the new contract scheme will provide optimum benefits to the State. The minister has hinted that Total would still involve in the development of the block, post 2017.

Some analysts have said given the complexity of the block and its revenue contribution to the State, it would be too risky if the government changed the operator without proper transition period. Pertamina has responded to those who are doubtful about Pertamina’s capability said recently that the company is ready to operate the block. (*)

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