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Indonesia extends Brantas block for 20 years

An executive of Lapindo, the operator of Brantas working area, signed the extension of contract to develop Lapindo Working Area. (Image credit : ESDM)

JAKARTA (RambuEnergy.com) – The Energy and Mineral Resources Ministry has extended the operatorship right of Brantas Working Area for another 20 years starting from April 23, 2020 to Lapindo Brantas Inc and its partners PT Prakarsa Brantas PT Minarak Brantas Gas

Lapindo Brantas will remain as the operator of the controversial block. The block ceased operation after mudflow from a well within the block burst into air, causing catastrophic tragedy. Thousands of hectares of land and villages were inundated and forced the villagers to evacuate and flee.

The mudflow case has cost trillions of rupiah loss to the state as the State was forced to pay the compensation to the villagers for damaged land and loss of properties and assets. The case, under former president Soesilo Bambang Yudhoyono era, has also caused political debate. Most experts blamed Lapindo for the tragedy, but the company has defended that the earthquake in Central Java was the main cause.

Since 2006, the energy ministry has studied the proposal of Lapindo to ensure that the above tragedy would never happen again. The energy ministry said Lapindo Brantas has taken necessary measures to ensure that the drilling activities will go ahead safely.

Director General for Oil and Gas Djoko Santoso said the development of the block has been supported by local government. The other reason the block remains in the helm of Lapindo Brantas is that no other companies interested to develop the block.

President Director of Lapindo Brantas Faruq Adi Nugroho thanked the government for the extension of the contract.

Currently, Brantas WK produced 20-25 MMSCFD of gas and expected to rise to 30-35 MMSCFD of gas at the end of this year and further increase to 100-150 MMSCD in 2025.

In return for the contract extension, Lapindo Brantas pays a signature bonus of US$1 million or Rp13.4 billion. The operator is expected to invest up to US$115.5 million in the next five years. (*)

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