Jakarta, Dec 4 (Antara) - The Mahakam oil and gas block in East
Kalimantan still has large reserves of oil and gas, even after being
exploited by French firm Total E&P Indonesie and Japan's Inpex
Corporation for some 50 years.
Total E&P Indonesie, in the remaining two years of its contract, is
focusing on the field in an effort to increase its oil and gas
production.
Total's oil production is currently some 66,053
barrels per day, a five percent increase from its earlier average daily
production of 62,910 barrels per day. It aims to produce 1.7 billion
cubic feet of gas in 2014, which will equal its gas production from a
year earlier.
As it was known, Total now operates on the basis of a contract with
Inpex in the Mahakam oil block. It has invested US$27 billion in
exploration activities and contributed US$83 billion (Rp750 trillion) to
the state.
The French multinational company was awarded the work contract for the
Mahakam block in 1967 for a period of 30 years. In 1997, Total won a
20-year extension for the contract, which is now valid till March 31,
2017.
As
the contract will expire in 2017, many quarters have urged the
government to not extend it further and hand over the management of the
oil and gas field to state-owned oil and gas enterprise Pertamina.
Even after being exploited for nearly half a century, the block is
believed to still have oil and gas reserves worth Rp1,700 trillion,
which can be exploited for 20 years
According to geologist
Rovicky Dwi Putrohari, the Mahakam oil and gas block in East Kalimantan
still has large oil and gas reserves.
"As a geologist, I see that the oil and gas reserves in the Mahakam
block are still large. It still holds a large 'upside potential,' or
resembles a field that has yet to be exploited," he revealed.
Putrohari, who is a former general chairman of the Indonesian
Geologists Association, also stated that although the Mahakam block has
witnessed exploration activities of the French company for some 50
years, its reserves have not been optimally tapped into yet.
Exploitation has yet to go deeper to draw oil and gas from the
reservoirs hidden deep under the layers exploited so far.
The technology to go deeper is usually applied in high-pressure and high-temperature systems.
"The exploitation of the Mahakam block has not reached the reservoirs
yet. These are deeper and have larger reserves. If it is done, I think
we will find larger volumes of reserves," he pointed out.
Along with other oil and gas fields in East Kalimantan, the Mahakam
block contributed 25 percent to the national oil and gas revenue, which
is a contribution of some Rp100 trillion annually.
Moreover, Director of the Indonesian Resource Studies (IRES) Marwan
Batubara was quoted as saying by the Jawa Pos last May that after
Total's contract expires in 2017, there could still be untapped reserves
of 8 trillion cubic feet of gas and 100 million barrels of oil.
Assuming that gas is priced at US$15 per million British thermal unit
(MMBtu) and oil at US$100 per barrel, the Mahakam block reserves have
the potential to generate revenue amounting to as much as US$120 billion
(Rp1,300 trillion).
"Since 2007, the contractor (Total) submitted proposals for the
extension of its contract many times. This indicates that the Mahakam
block still has large deposits that could serve as a source of big
profits," he affirmed.
Therefore, the government has been asked to take over the Mahakam oil
and gas block through state-owned oil and gas company PT Pertamina after
the work contract of PT Total E&P Indonesie expires in 2017.
Furthermore, Executive Director of the Institute for Development of
Economics and Finance (Indef) Ahmad Erani Yustika noted on Tuesday
(December 2) that several quarters have urged the government to not
extend PT Total's contract any further.
"We appreciate the government's move to entrust the management of the
Mahakam block to Pertamina. This has been our demand so far," Yustika
added.
Yustika, who is also a professor of economics at the University of
Brawijaya in Malang, East Java, expressed hope that Pertamina will take
over the operation of the oil and gas block.
In
fact, the government is planning to hand over the management of the
Mahakam block to state-owned oil and gas company Pertamina after the
work contract of Total E&P Indonesie expires.
"We
will hand over the Mahakam block to Pertamina, and Pertamina will be
pleased to manage it to its maximum potential for the state. We are
waiting for a response from the firm," Widhyawan Prawiraatmadja, the
Work Control Unit Head of the Ministry of Energy and Mineral Resources
(ESDM), said last month.
He explained that the government will fully transfer the operation of
the Mahakam block to Pertamina. It will be up to Pertamina to decide on
the management of the oil and gas block after 2017.
In addition, Pertamina has also expressed its readiness to completely
take over the oil and gas block. It sent a letter to ESDM Minister
Sudirman Said stating that it is ready to operate the block after 2017.
"We
sent the letter today," acting president of Pertamina, M Husen,
confirmed in a press release last Thursday (November 27).
Husen further added that Pertamina possessed the skills and required
funding to take over the operation of the Mahakam block. He made the
remarks before the new President Director of Pertamina Dwi Soetjipto,
who was installed last Friday (November 28).
Soetjipto himself confirmed that the firm will take the best measures to manage the oil and gas field.
"We hope Mahakam will serve the best interests of Pertamina," the new
president director remarked, adding that the earlier management of the
state-owned company conducted research on the block.
As the new president director, Soetjipto will study the results of the
research to ensure that the plan proceeds well. "I will study it in the
next one or two days," he affirmed.
***2***
(T.A014/INE)
EDITED BY INE
(T.A014/A/BESSR/A. Abdussalam) 04-12-2014 20:59: |
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