Pertamina Likely to Sign Transition Agreement Next Week for Mahakam Block
PT Pertamina is expected to sign an agreement next week with the joint venture partners of the Mahakam Block offshore East Kalimantan, Indonesia to ensure a smooth transition as the national oil company prepares to assume operations after the expiry of the production sharing contract (PSC) at the end of 2017, according to Indonesia's Minister of Energy and Mineral Resources Sudirman Said, as reported by his Ministry Thursday.
The agreement will provide an outline of the transition process for the Mahakam block, which will take place over a two year period ahead of Pertamina's assumption as field operator Jan. 1, 2018.
The Indonesian government had announced in late March its decision to allow Pertamina to operate the Mahakam block despite repeated requests from the existing joint venture partners -- Total S.A. and Inpex Corp. -- seeking an extension of the PSC, which produces around 1.76 billion cubic feet per day in 2014.
Separately, Indonesia's production has exceeded 800,000 barrels of oil per day (bopd) in April to reach 805,000 bopd as output from from the Banyu Urip field in Cepu Block in Java increased, Muliawan, director for operations at upstream regulator SKKMigas, said Wednesday, as quoted by local daily Jakarta Globe.
Current production from the Banyu Urip field is between 75,000 and 78,000 bopd, compared to 40,000 bopd previously. The government is depending on higher Banyu Urip output to meet its 2015 production target of 825,000 bopd, compared to last year's 794,000 bopd.
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