Govt Officially Appoints Pertamina To Manage Mahakam Block

Jakarta (Antara Bali) - The government has issued an official letter appointing state oil and gas firm Pertamina to manage the gas-rich Mahakam Block in East Kalimantan after 2017,  Pertamina Upstream Director Syamsu Alam said.

Pertamina received the letter from Energy and Mineral Resources Minister Sudirman Said on Tuesday night, Syamsu Alam said here on Wednesday.

Pertamina will take over the gas block from Total E&P Indonesie after the French oil giant ends its contract for the block in East Kalimantan in 2017. After receiving the letter, Pertamina will discuss at length the transition period with Total E&P Indonesie, Syamsu Alam said.

Sudirman Said stated earlier the transition period was needed to enable Pertamina to manage the Mahakam Block properly after 2017. The minister expressed hope that Pertamina and Total E&P Indonesie would soon sign a head of agreement (HoA) regarding the transitional period for the operatorship of the block.

The government expects the transition period to last for two years from January 1, 2016 to December 31, 2017. The Indonesian unit of the French oil and gas giant as the operator of the block, has a 50 percent stake with Japan's Inpex Corporation holding the remaining 50 percent.

Total E&P Indonesie will end its contract after 50 years operating the block, one of the country's largest gas reserves. The block produces gas equivalent to around 280,000 barrels of oil per day. (WDY)