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JAKARTA (rambuenergy.com) – State owned oil and gas company PT Pertamina said it would set aside US$1 billion per year as capital expenditure for Mahakam Block if the government moves ahead to award the block operatorship to the company post 2017.
Mahakam Block is currently managed by Total E&P Indonesie as the operator and Inpex Corporation as non-operating partner. Total and Inpex contract to develop the block will expire at end March 2017.
The Energy and Mineral Resources Minister Sudirman Said has said that the government prefers Pertamina to become the operator of the block but opens opportunity for the existing operator to take part to ensure the block’s production continues.
President Director of Pertamina Dwi Soetjipto said during a hearing with the Commission VII of the House of Representative (DPR) which oversees the energy sector on Tuesday (Feb 3) that Pertamina would seek loan from lender to fund the annual operating expense of the block.
Pertamina is scheduled to submit its proposal to the energy ministry about its plan to the develop the block, if it is awarded by the government to become the operator of the block.
The current operator Total E&P spends around US$2.5 billion per annum to develop Mahakam Block.(*)