Total Invests US$1 billion in Mahakam

TEMPO.CO, Balikpapan - The Indonesian unit of France's energy giant, Total E&P Indonesie (TEPI), will spend US$1 billion on the procurement of goods and services to support exploration and exploitation activities in the Mahakam block, East Kalimantan. TEPI's head of contracts & procurement division Imam Herawadi said the funds will be disbursed to 1,200 procurement commitments, in accordance to their agreement with the Special Task Force For Upstream Oil and Gas Business Activities (SKK Migas).

Imam said the procurement of goods and services are needed for wells maintenance in the block. Mahakam currently has 107 old oil and gas wells and 111 new ones. "These wells require maintenance to maintain production," he said.

In March 2013, Total announced that gas production in the Mahakam block reached 1,750 MMSCFD while oil production reached 66,400 bpd. According to Imam, the actual production is higher than the initial projection of 1,660 MMSCFD gas and 62,900 bpd oil.

Agus Suprijanto, TEPI's deputy executive vice president and area manager for East Kalimantan, said The company is committed to maintain Mahakam block's production even though the fate of their contract extension in the block remains unclear. According to Agus, the contract issue does not affect the company's commitment in procuring goods and services as well as other investments.

SG WIBISONO (BALIKPAPAN)