Pertamina signs 3 new oil and gas contracts

Pertamina signs 3 new oil and gas contracts

JAKARTA (JP): State oil and gas company Pertamina signed on
Thursday two new production sharing contracts with PT Chevron
Kisaran Ltd, Texaco Kisaran Inc, and with Coparex Banyumas BV,
and one technical assistance contract with Buana Sadpetra Ltd.

Chevron and Texaco received a 30-year contract for the
exploration and development of the Kisaran block in North
Sumatra.

Coparex received a 30-year contract that covers exploration
and development of the Banyumas block in Central Java.

While Buana was granted a 20-year contract for the exploration
and investment of the Mambang Sebasa block in South Sumatra.

"The contract signing shows the strong commitment of oil and
gas investors, as they are here for the long haul," said Minister
of Energy and Mineral Resources Purnomo Yusgiantoro during the
contract signing ceremony.

He said the government hoped the three contractors would be
able to bolster the country's oil and gas reserves from
exploration in their contract areas.

Pertamina said in its statement that each contractor was
committed to start exploration and development at its block
within 10 years of the contract's signing.

Contractors may spend up to US$5.5 million in investment,
Pertamina said, without providing details.

They must also pay Pertamina fees totaling $815,000 for
information, education and other services.

Oil and gas companies secure contracts for certain areas if
they show prospects of containing significant oil and gas
reserves.

But it is not until extensive exploration has been conducted,
that contractors may assess the presence of such reserves.

Pertamina president Baihaki Hakim said that "geological risks"
at the Banyumas block had been deterring investors from securing
a contract over the block.

However, the availability of infrastructure, and the proximity
to oil and gas markets, encouraged investors to bet on Banyumas,
he added.

Signing the contract for Texaco and Chevron was Humayunbosha,
president of PT Caltex Pacific Indonesia, a unit of American oil
and gas companies Texaco Inc. and Chevron Corp.

Humayunbosha said the Kisaran block was expected to yield
natural gas reserves.

He said Caltex did not plan to become a producer in the gas
market, but hoped to use the gas for its own operation needs.

According to him, future oil projects requires the company to
seek additional gas supplies.

Caltex recently secured a deal with Gulf Indonesia Resources
Ltd, for the purchase of 180 million cubic feet of gas a
day.(bkm)