Pertamina allocates US$190 million for Mahakam exploration

State-run oil and gas company Pertamina has allocated US$190 million for exploration of Mahakam Block in East Kalimantan.

“The fund has been prepared, but it would not be that easy to process it. We are still calculating the tax and we could not give the fund yet to the blocks operator Total E&P Indonesie,” Pertaminas upstream director Syamsul Alam said here, Thursday.

PT Pertamina Hulu Mahakam (PHM), a subsidiary of PT Pertamina, has been appointed to operate the block to maintain production in the gas field.

Pertaminas Corporate Vice President Wianda Pusponegoro said in a statement earlier this week, that the special task force for upstream oil and gas business (SKK Migas) has agreed on the bridging agreement (BA) scheme and funding agreement (FA) on Mahakam Block, signed by Pertamina, Total E&P Indonesia, and Inpex Corporation.

“The agreement has clarified stakeholders commitment to smooth the transition of operators from Total to PHM. PHM has entered the Mahakam Block in 2017 under the BA and FA,” Syamsul said.

The bridging agreement has regulated Total operations as the previous operator of Mahakam fields, for the interest of PHM.

While the funding agreement would arrange the PHM funding mechanism on Total operation in accordance to the binding agreement.

The agreements were signed on March 3, after an intensive discussion involving PHM, Total and Inpex.

“PHM and Total would open a joint account,” she said.

Totals contract ends on Dec. 31 this year, after operating the Mahakam field for 50 years.

As an operator, Total has a 50 percent “participation right” while the remaining 50 percent is owned by Impex Corporation Ltd.

Total is expected to produce 1,430 million standard cubic feet of gas per day and 53,000 barrels of oil per day in 2017.