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Total E&P Indonesie yet to reach an agreement with Pertamina over Mahakam

[Photo OS/Rambu Energy]
[Photo OS/Rambu Energy]
JAKARTA ( – Total E&P Indonesie, a giant oil and gas company of France which currently the operator of gas-rich Mahakam Block, said it has yet to reach an agreement with Pertamina over the terms of conditions and its level of participation in the development of Mahakam Block post 2017.

“It is too early at this stage for us to commit on any decision or any level of participation, but we are ready to  make our best efforts to reach an agreement,” Total E&P Indonesie’s President and General Manager Hardy Pramono said in a statement.

“Total E&P Indonesie is ready to engage into discussions with Pertamina about it’s participation in the continuation of Mahakam Block and to start a new era of cooperation between our companies,” he said.

“Our intention is to keep on bringing our expertise so as to ensure the continuity of operations for the benefit of the country, Indonesia,” he said.

“Of course this will depend on the terms and conditions which will be agreed upon after discussion,” he noted.

On Wednesday (July 8), Director for Upstream of Pertamina Syamsu Alam claimed that Total and Inpex have agreed to take the 30 percent in Block Mahakam under the new contract scheme which will start from January 1, 2018. “Total and Inpex have agreed to join and buy 30 percent interest of Mahakam Block,” Syamsu Alam said.

On June 19, Minister for Energy and Mineral Resources said that the state owned oil and gas company PT Pertamina will take control of the operation and development of Mahakam Block from January 1, 2018.

Under the new scheme, 70 percent of the participating interest in the block will be awarded to Pertamina and the remaining 30 per cent interest will be given to Total E&P Indonesie and Inpex Corporation.

Of the 70 percent interest, 10 percent is proposed to be given to the local governments in East Kalimantan. The exact portion of participating interest to the local government, however, is yet to be determined.

Total E&P (operator) currently holds 50 percent working interest, while the other 50 per cent interest is owned by Inpex Corporation of Japan, as a non-operator partner.

The existing operator signed the production sharing contract (PSC) to operate and develop the block on October 6, 1966. Mahakam Block began flowing gas from 1974 and helped to position the country as one of the largest LNG exporting nation.

The first contract expired on March 30, 1997.  On January 11, 1997, the Indonesian government extended Total’s contract for 20 years to December 31, 2017. Both Total E&P and Inpex have expressed interest to continue to take part in the future development of Mahakam block. (*)


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