State energy holding company Pertamina now has a legal basis to conduct early investment to maintain the production in the Rokan Block in Riau after the company signed a new production sharing contract (PSC) with the government on Thursday.
The signing ceremony was held at a private event.
With the contract, Pertamina is now officially a new operator of the Rokan Block, one of the country's most lucrative oil and gas blocks. The existing contract held by US-based Chevron will end in August 2021.
Upstream Oil and Gas Regulator Agency (SKK Migas) chairman Dwi Soetjipto said the signing ceremony was needed so that Pertamina could start transitional work.
"Before making any transition-related moves, the government has to officially appoint [the operator]. That's why we appointed the company,” Dwi said.
Journalists received information that the ceremony was in fact held on the Thursday morning, but Dwi only announced it later that night. He did not explain further details, saying that the ceremony was only “an administrative matter”.
Dwi said the PSC also required the transfer of 10 percent of the ownership of the block to the region-owned enterprise (BUMD), as ruled in the existing regulation. However, he declined to disclose details about the split agreed to between the government and the company.
Based on the latest data from SKK Migas, Rokan's daily oil and condensate production dropped to second place with only 196,515 barrels oil per day (bopd) as of April 30, lower than the oil and condensate production of East Java's Cepu Block, managed by US energy firm ExxonMobbil, which was recorded at 219,787 bopd.
Pertamina won the Rokan Block contract in July, 2018, defeating Chevron, as the former offered a US$784 million signature bonus, a $500 million five-year working commitment and $57 billion in potential state-revenue over a 20-year period.
Source: Steffano Reinard Sulaiman / The Jakarta Post
10 May 2019