TEMPO.CO, Jakarta - State-owned oil and gas company Pertamina will begin drilling for oil and gas at the Mahakam Block, East Kalimantan in the second quarter of 2017. For the project, Pertamina is allocating a budget of US$1.25 billion (Rp16.4 trillion).
Pertamina president director Dwi Soetjipto said the investment value is only half of what Total E&P Indonesie invested. As the existing operator, the French company spends US$2.5 billion on Mahakam.
Total will remain as Mahakam Block's manager until next year. Pertamina's desire to make an early start was approved by the government in July, under the consideration that nearing the end of its contract Total will cut expenses for Mahakam while the block's production rate is declining due to age factors.
Total welcomes Pertamina's plan to finance a number of activities in Mahakam. Total's president Hardy Pramono said that the company is not lowering its investments because the management contract is coming to an end. Lowering production, he said, is based on the conditions that oil and gas businesses are under pressure due to weakening global prices.
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