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Thu, February 9, 2012
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Pertamina Hopes for Mahakam Approval by April
Reva Sasistiya & Reuters | March 18, 2010

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State oil and gas company PT Pertamina said it was hoping for government approval to buy a stake in the Mahakam gas block off East Kalimantan by next month.

Pertamina president director Karen Agustiawan said on Thursday that the company had presented the government with two options about how it might buy the stake and become involved in the block’s operation.

“Should the government be able to make a decision in April, hopefully we could be able to enter the block this year,” she said.

Karen declined to give details of the options but said Pertamina had prepared financing and would fund the purchase of the stake, expected to be 15 percent to 25 percent, from internal and external sources.

French oil and gas company Total owns half of the block, and Japan’s Inpex the other half. Total’s local unit, PT Total E&P Indonesie, is the lead operator.

Karen said Total was reluctant to offer shares because of its lengthy involvement in the block. “That’s normal. But this is Indonesia’s asset and we have to have a part of it, too,” she said.

Earlier this month Energy Minister Darwin Zahedy Saleh said the government wanted Pertamina to acquire a stake in the block and play a role in its development before Total’s operating contract expires in 2017.

Total has applied to extend its contract beyond 2017 but it is unclear whether it will be able to continue as lead operator. Karen has previously said Pertamina would like to become the block’s lead operator after 2017.

Evita Legowo, director general of oil and gas at the Energy Ministry, said the government was still reviewing the possibility of extending Total’s contract. “We still have time until 2017, so we don’t want to rush,” she said.

Total spokeswoman Judith Navarro Dipodiputro said Darwin had formally asked Total to build a partnership with Pertamina before the contract expires. “Total and Inpex welcome positively the government’s proposal,” she said. “We are still in discussions with Pertamina about how to reach the best agreement.”