Eric Watkins
Senior Correspondent
LOS ANGELES, Aug. 7 -- Total E&P Indonesie is seeking an extension for its contract for the Mahakam oil and natural gas block in East Kalimantan, scheduled to end in 2017. The block holds 13 tcf of gas reserves.
Total said the firm plans large investment in the block; In order to calculate its investment, it needs to know if the contract will be extended.
Kardaya Warnika, head of Indonesia's upstream oil and gas regulatory body BP Migas, acknowledged that contractors may seek an extension of a contract up to 10 years prior to its end, but he said there is no guarantee that the proposal will be processed.
Last year Total SA said it planned to spend $1.5 billion on gas development in Indonesia, much of that on its Sisi and Nubi fields on Mahakam Block off East Kalimantan. Total E&P Indonesie operates these fields in partnership with Inpex Corp., Tokyo, under a production-sharing contract (OGJ Online, Oct. 27, 2005).
Separately, domestic Indonesian oil and gas firms have asked the government to restrict oil and gas contracts with international companies to a maximum of 1 year (OGJ Online, July 31, 2006).
Contact Eric Watkins at [email protected].
