PetroChina Signals Interest in Participating in Managing Masela Block

Several oil and gas contractors are interested in participating in managing gas-rich fields in the Masela Block. PetroChina now joins Pertamina in expressing its interest to Inpex Corporation.

The company’s Vice President of Human Resources and Services, Maryke PY Pulunggono, said that if given a chance, the company would be willing to manage the Masela Block jointly with Inpex. "If we are invited to become a partner, we’ll definitely do that," she said in Jakarta, Friday (24/6).

She said that PetroChina’s new management is committed to adding blocks to the company’s portfolio in Indonesia, because the company believes upstream oil and gas investment in Indonesia is still a very attractive investment option. (Read: It’s Normal for Oil and Gas Companies to Pull Out)

Maryke said that the company is currently evaluating several oil and gas blocks that are in the process of farming out or selling its management rights. One is the South Natuna Sea Block B which is managed by ConocoPhillips. However, she said that PetroChina had joined in the process rather late in the day.

Reluctant to disclose which oil and gas blocks PetroChina is targeting, Maryke did say that the blocks must already be in production. "There will be more blocks next year," she added.

PetroChina also remains committed to managing, and even extending the management of, expiring oil and gas blocks. This includes the Tuban Block contract, which will expire in 2018. Maryke said that PetroChina is interested in managing the block after the contract ends because its potential is still very good. (Read: Pertamina Eyes Four Expiring Oil and Gas Blocks)

According to Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) data, the Tuban Block produces 4,009 barrels of oil per day (bopd), and 1.9 million cubic feet (mmscfd) of gas. The block is currently managed by a Joint Operating Body with Pertamina. According Ministry of Energy and Mineral Resources data, PetroChina has a 25% stake in the management of the block. The rest is owned by Pertamina. 

Maryke said that PetroChina is exploring the possibility of continuing cooperation in the management of the Tuban Block with Pertamina. Previously, Pertamina submitted a request to the government to extend the Tuban Block, and the state energy firm has set aside funds to manage the block after the contract expires. (Read: Pertamina Prepares IDR 3.3 Trillion to Extend Two Oil and Gas Blocks)

Pertamina estimates the value of investment required after the contract ends to be US$ 163 million. The estimated remaining reserves when the contract expires are 12 million barrels of oil (mmbo) for oil and condensate, and 112 billion cubic feet (bcf) for gas. As of 9 February, the block, which is located in East Java, was producing 4,261 barrels of oil per day (bopd) and 4.69 mmscfd of gas.