JAKARTA (RambuEnergy.com) – The Indonesian government has awarded state-owned energy company PT Pertamina as the new operator of Rokan Block, one of the oldest and biggest oil blocks in the country, starting from 2021.
The block has been operated by Chevron since 1970s and once reached its peak production as high as 1 million barrels of oil per day. Today, the block’s oil production has declined, but still produce oil at significant volume.
Deputy Energy and Mineral Resources Minister Arcandra Tahar said at the press conference that the ministry picked Pertamina, over Chevron as the company offers more competitive bidding.
Pertamina was willing to pay a signature bonus of US$784 million or Rp11.3 trillion and investment commitment of US$500 million or Rp7.2 million.
The award of the block will allow Pertamina to increase its contribution to the country’s oil production from 23% at present to 60% in 2021.
Pertamina’s share of national production is projected to increase to 36% in 2018 and 39% in 2019.
At present, Block Rokan, which consists of Duri, Minas and Bekasap fields, contributed 26% of the country’s oil production.
Since 1971 until Dec. 31, 2017, the block has produced 11.5 billion barrels of oil.
Chevron has yet to respond to the announcement. Earlier, Chevron has expressed interest to remain as the operator of Rokan block once the existing contract expires.