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)