Focusing on IDD Project, Chevron is to farm out its Stake in B Block

KATADATA - PT Chevron Pacific Indonesia is to farm out its participating interest (PI) in B Block PSC, South Natuna Sea. Right now, the oil and gas giant from United States has 25 percent of holdings. Previously, ConocoPhillips as the operator of B Block PSC had also planned to sell 40 percent of its share ownership.

B Block started to be productive in 1979. Based on the information from ConocoPhillips official website, the net producitons of this block in 2014 stood at 5,000 barrels of oil per day (bpd), 117 million cubic feet per day (MMSCFD) of gas, and 4,000 barrels of liquefied natural gas (LNG) per day. The LNG production of this block is related with the long-term contract of gas sales and purchase that is channeled to Malaysia and Singapore through pipes.

The reason for Chevron to farm out its stake in B Block PSC is because Chevron wishes to focus in handling the Indonesian Deep-water Development (IDD) project in Makassar Strait, as I.G.N. Wiratmadja, the Energy and Mineral Resources (EMR) Ministry’s oil and gas general director, had said to Katadata, Thursday (29/10).

For additional information regarding IDD, the development of the project has been delayed since October last year. This was due to a change in investment value for the development of the project. The plan of development (PoD) for IDD has actually been approved by the government in 2008. But after the Front-End Engineering Design (FEED) in 2013, the cost for this project has exponentially increased from US$ 7 billion to become US$ 12 billion.

Besides that, there was also additional fields in the three blocks within the IDD project, which are Makassar Strait Block, Rapak Block, and Ganai Block in Makassar Strait. And as the result, Chevron has submitted a proposal to extend the cooperation contracts in those three blocks.

Previously, ConocoPhillips have also planned to sell its stake in B Block PSC. And as the first step, the US-based firm has asked the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) to open up a data room for B Block PSC. The purpose of this is to know the value of the assets and to calculate the enthusiasm of the buyer candidates.

The partners in B Block are to be prioritized to see the data first. And as the operator, ConocoPhillips holds 40 percent shares in the block. The remaining goes to Inpex Corporation (35 percent), and Chevron (25 percent).

And now, Chevron is to sell its stake in the block. However until this news is being written, Katadata has not received any confirmation yet from Chevron’s management. Additionally, Yanto Sianipar, Chevron’s VP for Policy Government and Public Affairs, also did not respond to Katadata’s short message that was sent by Whatsapp, a smartphone application for messaging.