Mahakam partners sign bridging agreements
Total E&P Indonesie will maintain oil and gas work on the Mahakam Block offshore Indonesia until a unit of state-run Pertamina becomes operator on Jan. 1, 2018.
Total and 50-50 partner INPEX Corp. have signed bridging and financial agreements with PT Pertamina Hulu Makaham (PHM) providing for continuity of operations until expiration of the production sharing contract at yearend.
INPEX entered the PSC in October 1966. Total became operator in 1970.
The venture has discovered Bekapai and Handil oil fields; Tambora oil and gas field; and Tunu, Peciko, Sisi, Nubi, and South Mahakam gas fields on the block.
In its 2016 annual report, INPEX reported average Mahakam production in its fiscal 2015 at 73 million b/d of oil and 1.452 bcfd of natural gas. The gas feeds the Bontang LNG plant.
Indonesian press reports say Pertamina wants 19 wells to be drilled on the Mahakam Block this year to maintain production.
In a Mar. 14 news release, INPEX said it and Total are “pursuing discussions with PHM and the Indonesian government authorities with the aim of participating in the Mahakam Block” after the PSC expires.
The government has indicated a 30% Mahakam interest will be available to non-Indonesian investors after the PSC expires.