Pertamina Eyes Four Expiring Oil and Gas Blocks

The state-owned oil and gas giant Pertamina has identified a number of oil and gas blocks that are targeted to be acquired when their contracts end in 2018. There are four blocks that the state firm is currently eyeing. 

Pertamina’s Senior VP for Upstream Business Development Denie S. Tampubolon said the four blocks that Pertamina is looking at the East Kalimantan Block, Sanga-Sanga Block, Tuban Joint Operating Body (JOB) , and Ogan Komering JOB . “We have submitted our proposal to the government,” Denie told Katadata, Tuesday (19/4). (Read: Pertamina to Finance 2017 Investment in Mahakam Block)

Denie said that one reason Pertamina decided to target the four blocks is their great potential. Pertamina had already seen the potential of the Sanga-Sanga Block after gaining access to the block’s data room in January. However, Pertamina must compete with VICO Indonesia, the current operator of the block, because VICO has expressed an interest in renewing when its current expires in 2018. 

Under ministerial regulation 15/2015, the government has three options regarding expiring strategic oil and gas blocks that have major reserves and were previously owned by foreign companies: extending the contracts of existing contractors, transferring the management rights to Pertamina, or dividing the management rights between Pertamina and the existing contractors.

According to energy ministry data, eight blocks are due to expire in 2018. The first is the Tuban Block, currently operated by the Pertamina-Petrochina East Java JOB. Companies with participating interests in the block are CNPC (12.5 percent), Pertamina (75 percent), and Petrochina (12.5 percent). This block has 27,884 million stock tank barrels (mtsb) of oil reserves and 10.6 billion standard cubic feet (bscf) of gas reserves. 

Second is the Ogan Komering Block, operated by the Pertamina-Talisman (Ogan Komering) JOB. Talisman and Pertamina both have a 50 percent participating interest in this block, which has 3,191 mtsb of oil reserves and 18.8 bscf of gas reserves. (Read: Pertamina Gets to Access Masela Block’s Data Room)

Third is the Sanga-Sanga Block, operated by VICO Indonesia. Companies with participating interests in the block are Virginia Indonesia (7.5 percent), BP East Kalimantan (26.25 percent), Lasmu Sanga-Sanga (26.25 percent), and OPICOIL Houston (40 percent). This block has 13,232 mtsb of oil reserves and 448.96 bscf of gas reserves. Recently, Pertamina has declared an interest in taking over the management of the Sanga-Sanga Block when the current contract expires in 2018. 

Other blocks which will expire in 2018 is South East Sumatra, operated by CNOCC SES, and the B and NSO Blocks in Aceh, which Pertamina has operated since taking over from ExxonMobil last year. 

The remaining two blocks are the Tengah Block, which is operated by Total E&P Indonesie and the East Kalimantan Block, which is operated by Chevron Indonesia. Pertamina has declared an interest in taking over operations of this block. (Read: Pertamina Urged to Acquire Stakes in Oil and Gas Blocks in Azerbaijan)

Pertamina has still to make a decision about the B and NSO Blocks in Aceh. “Both the blocks are being reviewed by the operator, Pertamina Hulu Energi,” Denie said.