Total sees falling gas production from block off Indonesia

Total SA subsidiary Total E&P Indonesie, the biggest producer of natural gas in Indonesia, said its production in East Kalimantan’s Mahakam block will decline to 2.55 bcfd this year from 2.57 bcfd in 2008.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Sept. 17 -- Total SA subsidiary Total E&P Indonesie, the biggest producer of natural gas in Indonesia, said its production in East Kalimantan’s Mahakam block will decline to 2.55 bcfd this year from 2.57 bcfd in 2008.

"This is a difficult block with matured fields. We have to fight every day to prevent the decline," said Elisabeth Proust, Total E&P Indonesie president director and general manager. Gas production from the block is predicted to decline further to 2.38 bcfd in 2010.

Hardy Pramono, Total E&P Indonesie deputy executive vice-president for the East Kalimantan district, said lower gas production would also reduce the block’s production of oil and condensate.

He said the firm expects the block's oil and condensate production to drop to 86,200 b/d next year, down from its estimated output of 97,200 b/d this year.

The Mahakam block, which holds an estimated 11 tcf of natural gas, supplies 80% of the gas for the Bontang liquefaction plant, operated by PT Badak NGL.

Total operates the Mahakam block with a 50% stake, while Japan's Inpex holds the remaining 50% under a production sharing contract that will expire at the end of 2017.

Proust said Total E&P Indonesie, which has requested an extension of the existing contract, plans to spend $16 billion from 2009 until the expiry date of its contract, and a further $6 billion in 2017-32 if it gets the extension.

Meanwhile, Indonesia’s state-owned firm PT Pertamina is said to be seeking 15% of Total E&P Indonesie's stake in the block.

Earlier this month, Pertamina President Director Karen Agustiawan said Total E&P Indonesie agreed to hand over part of its stake in the block to Pertamina before the 2017 expiration.

"We have committed to work with a domestic company,” Proust told Indonesian lawmakers this week. “If the company turns out to be Pertamina, we are very pleased.”

Contact Eric Watkins at hippalus@yahoo.com.

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