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PGN’s unit Saka Energi eyes interest in Sanga-Sanga Block in East Kalimantan

JAKARTA ( – PT Saka Energi Indonesia, a subsidiary of national gas distributor PT Perusahaan Gas Negara Tbk (PGAS.JK), is interested to acquire stakes in the Sanga-Sanga Block, located in Kutai basin in East Kalimantan after Vico Indonesia’s operatorship right to operate the block expires in 2018.

Vico and its partners are yet to submit their interest to extend their contract in the block. Sanga-Sanga Block is among oil and gas block whose contracts will expire in the five years.

I.G.N. Wiratmaja Puja, Director General for Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM) has revealed intention of Saka Energi, the upstream oil and gas unit of PGN. He sees it is logicial for Saka Energi to enter upstream gas business as a move to support the business of its parent company.

However, he said up until now, there was no talks between Saka Energi and Vico to enter the Sanga-Sanga Block.

General Manager of PT Saka Energi South Sesulu, Tumbur Parlindungan, told Bisnis Indonesia that there was no internal discussion about the matter.

Meanwhile, Wiratmaja said in May that Pertamina has submitted a letter of interest to the energy ministry over its interest to take over the Sanga-Sanga Block, after Vico’s contract expires in 2018.

Currently, Sanga-Sanga Block produces oil at an average of 16,733.23 barrels of oil equivalent per day (boepd). The other key shareholders in the block are BP East Kalimantan with 26.25 percent interest.

VICO Indonesia has been operating the Sanga-Sanga Production Sharing Contract (PSC), which is located in the Kutai Basin of East Kalimantan and covers an area of approximately 1,700 square kilometers, for more than 40 years. It has produced more than 12,6 TCF of gas and 0.4 billion barrels of liquid from the production fields in Badak, Mutiara, Semberah, Nilam, Pamaguan, Lampake and Beras.

The initial PSC was awarded in August 1968 and a 20 year license extension was granted in April 1990 to take effect from August 1998 until 2018.

VICO Indonesia owns 7.5 percent participating interest. The remaining interests are held by its non-operating partners, namely BP (26.25 percent), ENI (26.25 percent), VIC (15.625 percent), Opic Oil, a Houston based subsidiary of Taiwan’s CPC  (20 percent) and Universe Gas and Oil, a Japanese consortium including Japex and the Osaka Gas Group  (4.375 percent).

In 2009, the Sanga Sanga partners were granted an additional PSC for CBM with the same partner working interests.  (*)


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