Total ‘keen’ to develop Mahakam with Pertamina

Amahl S. Azwar, The Jakarta Post | Headlines | Tue, March 26 2013, 9:47 AM

Amid uncertainty over its future involvement in the Mahakam block, France-based oil and gas firm Total E&P Indonesie has reiterated the company’s willingness to jointly operate the gas-rich fields with Indonesia’s state-owned energy firm, PT Pertamina, a top executive has said.

Total E&P Indonesie president director Elisabeth Proust said on Monday that global giant Total SA’s subsidiary would be keen to work with Pertamina should the government oblige the contractor to do so after the current Mahakam concession expires in 2017.

“If the government is asking us to do that then we are ready. We can go on as the [Mahakam’s] operator or we can work with Pertamina. We are flexible on that,” she said after receiving the Woman of the Year Award from The Oil and Gas Year annual publication in Jakarta.

Proust, who received the award for her performance as the Indonesia Petroleum Association (IPA) president throughout last year, was commenting on the possibility of a joint operatorship between Total and Pertamina for the new Mahakam contract.

The Indonesian government has yet to decide whether to grant an extension for Total to operate the Mahakam block or to hand over the operatorship instead to Pertamina. There are 29 block concessions slated to expire in the next years that have not been decided.

Earlier, Energy and Mineral Resources Minister Jero Wacik was quoted by Antara news agency as saying the government would decide Mahakam’s fate in October 2014 at the latest or by the end of the current administration of President Susilo Bambang Yudhoyono.

Total, which holds the operatorship and 50 percent of participating interests in the Mahakam, would prefer for the decision to be taken this year to maintain the company’s investment for the block’s development, said Proust, regarding the minister’s statement.

“I think that Total — and I would say the whole industry — expects the decision on the extension of the Mahakam as well as other contracts will be decided by the government soon,” she said.

Both Total and Japan’s Inpex, which holds the remaining 50 percent of shares of the block, have poured a combined US$2.5 billion into investment to develop Mahakam this year.

While claiming the firm already had a two-year investment plan for the East Kalimantan-located block until 2014, Proust said the firm would welcome any decision from the government before deciding on further investment.

Pertamina investment-planning and risk-management director Afdal Bahaudin said the company would be keen to jointly operate the Mahakam block with Total for the first five years after 2017 before taking over the whole operatorship.

“Both transfer of technology and transfer of knowledge have always been the main requirement for Pertamina in deciding a partner. As for Total’s case, of course we are interested if that is possible,” he said.

Total, the largest natural gas producer in Indonesia, aims to produce 1,577 million metric standard cubic feet per day (mmscfd) of natural gas by the end of this year, according to data from the upstream oil and gas regulatory special task force SKKMigas.


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