OTC 2015: Indonesia to Decide Mahakam Transit Deal, MEMR O&G Top Post Soon

OTC 2015: Indonesia to Decide Mahakam Transit Deal, MEMR O&G Top Post Soon
Indonesia expects a transit deal for the Mahakam block off East Kalimantan to be sewn up later this month, a top Ministry of Energy and Mineral Resources official says.

Negotiations between Indonesia's national oil company PT Pertamina and the joint venture of the Mahakam production sharing contract (PSC) are still in progress, with an agreement to transit the operatorship of the offshore East Kalimantan gas block likely to be completed before the end of this month, a senior official of the country's Ministry of Energy and Mineral Resources told Rigzone on the sidelines of the 2015 Offshore Technology Conference (OTC) in Houston late Monday.

"The (transition) agreement (between Pertamina and France's Total S.A. and Japan's Inpex Corp. - the current Mahakam joint venture) is expected to be completed by month end," I Gusti Nyoman Wiratmaja Puja, acting director general for Oil & Gas at Indonesia's Ministry of Energy and Mineral Resources said.

The agreement will set out the transition process for the Mahakam block, which will cover a two year period ahead of Pertamina's takeover as field operator Jan. 1, 2018. The government had made the decision in March to allow the state-owned firm to operate the Mahakam block after the PSC expires at the end of 2017 despite repeated requests from the joint venture for a contract extension.

"They are still working out the percentage (of participating interest) to be allotted to the joint venture (in the new PSC to be operated by Pertamina)," Wiratmaja Puja revealed.

In return for participating interest in the Mahakam PSC, Pertamina will receive a stake in foreign upstream assets held by the joint venture.

“We are open to swapping one of our overseas assets with Pertamina ... We are discussing this with Pertamina,” Total Indonesie president and general manager Hardy Pramono said April 21, as cited in the Jakarta Globe, referring to the French company's operations in Indonesia, Canada and Africa.

The percentage of Pertamina's share in the foreign asset holdings, whether onshore or offshore, will be dertermined by the share of the current partners' new stake in Mahakam PSC post-2018.

"The rationale for this is for the stakes to have about similar value," Wiratmaja Puja explained to Rigzone.

The idea for an asset swap was mooted by the Indonesian government to leverage a partnership between the resource firms while expanding Indonesia's energy resource base.

Meanwhile, the government appeared to be close to announcing the appointment to the top oil and gas post in the Ministry of Energy and Mineral Resources from three shortlisted candidates. They include Pertamina's former Upstream Director Muhamed Husen and Pertamina's unit PT Pertagas Niaga President Director Jugi Prajogia as well as the Ministry's Acting Director Wiratmaja Puja.

While Wiratmaja Puja has not been been given any news on the appointment yet, he is cutting short his stay in Houston for OTC.

"I have received a call to return to Jakarta on the Minister’s instruction," the Acting Director of the Ministry of Energy and Mineral Resources told Rigzone.

Indonesian President Joko Widodo is expected to make a decision on the appointment shortly.



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