Further consolidating oil and gas interests in the state-owned oil company, Indonesia’s energy ministry announced Pertamina will replace Chevron Corp. as operator of the Rokan Block in Sumatra when the production-sharing contract expires in 2021.
Chevron had asked for an extension of the PSC, in which it holds a 100% interest.
Its Rokan Block production last year averaged 122,000 b/d of crude oil and 21 MMcfd of natural gas.
The block includes Duri field, one of the world’s largest steamfloods, where Chevron’s 2017 production was 54,000 b/d.
Its remaining production on the block comes from 75 fields producing 68,000 b/d of crude and 21 MMcfd of natural gas.
Chevron also has operated interests off eastern Kalimantan. One of its offshore PSCs is reverting to the government later this year.
Pertamina took control of the nearby Mahakam Block operated by Total SA in a 50-50 partnership with Inpex Corp. when that PSC expired late last year (OGJ Online, Jan. 2, 2018).
Hugo Brennan, senior Asia analyst at Verisk Maplecroft, said in a press note that the decision to replace Chevron with Pertamina in the Rokan Block fits “the government’s strategic vision for an upstream sector with a strong state presence.”
While the energy ministry said Pertamina made a superior bid for the block, Brennan noted the move came a week before a registration deadline for candidates in a presidential election next year.
“The trend towards awarding expiring PSCs to Pertamina is highly likely to continue over the next 5 years,” he said. “There is broad support across the political establishment to maximize the benefit that the country receives from its natural resource wealth amid a populist narrative of foreign exploitation.”