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Pertamina secures 20 years contract extension to develop ONWJ block

Image : ESDM

JAKARTA ( – PT Pertamina Hulu Energy (PHE), an upstream subsidiary of state owned energy company PT Pertamina, has secured contract extension of 20 years to develop the Offshore North West Java (ONWJ) block.

The contract extension was today (Jan 18) signed by the Minister for Energy and Mineral Resources Ministry (ESDM) Ignasius Jonan at the ministry’s office and accompanied by the head of the Special Task Force for Upstream Oil and Gas Business (SKK Migas) Amien Sunaryadi.

Under the contract extension, PHE will have the right to develop ONJW block from Jan. 19, 2017 until Jan. 18, 2037.

Unlike the previous production sharing contract (PSC) scheme, the contract extension is based on base and variable split.

As for gas, the split is 37.5% for the government and PHE 62.5%, while as for oil, the government will get 42.5% and PHE 57.5%

Previously, the government’s share for oil is set at 85% and gas 70%.

Under the gross split scheme, the cost to develop the block will also be the responsibility of PHE and will not be paid back (recovered) by the government.

Minister Jonan said the new scheme will not eliminate the government’s control on the oil and gas companies because the Working Area is in the hands of the government; the  decision on production capacity and lifting is set by the government as well as the commercial aspects; split is determined by the government; government revenues are more certain; and production is divided at the delivery point.

At present, PHE ONWJ, the operator, holds 58.28% interest in the ONWJ block, PT Energi Mega Persada ONWJ Ltd 36.72% and Kufpec Indonesia (ONWJ) BV 5%.

ONWJ Block is a major oil and gas producer in Indonesia. The block is estimated to have proved plus probable reserves of 1 trillion cubic feet (tcf) of gas and 178 million barresl of oil.

Pertamina President Director Dwi Soetjipto said PHE ONWJ is determined to achieve production target of 36,000 barrels of oil per day this year and 172 MMSCFD of gas.

Under the contract extension, the operator is required to hand over 10% of the ONWJ block interest to the local government. The new participating interest composition of the block is yet to be revealed by Pertamina.



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