Pertamina Steps up Bid for Control of Indonesia's Biggest Gas Field


JAKARTA, May 21 (Reuters) – Indonesian national oil and gas firm Pertamina said it is pushing the government to gain control of the country's top gas producing field that is currently operated by Total of France whose contract is due to expire in 2017.

Indonesia only allows oil or gas firms to extend their contracts once for up to 20 years, and gives Pertamina the right to take over expiring contracts if it wants them.

Total has warned that output from the Mahakam field in East Kalimantan, currently at around 1.66 billion cubic feet per day, could drop sharply if it is not allowed to extend its current contract beyond 2017.

Total has promised to invest up to $7.3 billion before then if the contract is renewed, but energy resources are highly politicized in Indonesia and with elections approaching in July no decision has been made.

Pertamina, which plans to increase output nearly five-fold by 2025, has written letters reminding the government it is ready to take over the Mahakam field.

"We reaffirmed we are ready to operate it," Pertamina upstream director Muhammad Husen told Reuters on the sidelines of the annual Indonesia Petroleum Association (IPA) conference in Jakarta, adding that his firm had sent three letters so far.

"Maybe the government needs time to consider it."


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