17 November 2019 (closed)
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The government of Indonesia appointed state-owned energy company Pertamina to operate eight oil & gas blocks after contracts with existing operators expire in 2018. Indonesia's new gross profit sharing scheme, which replaced the nation's cost recovery scheme, will be applied to the new contracts in 2018. Under the gross profit sharing scheme the Indonesian government and contractors agree up front on the proportion for splitting gross profit from oil and gas exploration (implying that all exploration and production costs are now borne by the operator).
The eight oil and gas blocks that will be operated by Pertamina starting from 2018 are old blocks, with an age above 30 years. The old age of these fields means that production costs become higher. Considering production costs are not borne by the government under the gross profit sharing scheme, these fields are less attractive for private oil and gas companies.
Eight Oil & Gas Blocks to be Operated by Pertamina from 2018:
|Tuban||JOB Pertamina, PetroChina East Java|
|Ogan Komering||JOB Pertamina, Talisman|
|Sanga-Sanga||Virginia Indonesia Oil Company LLC, BP East Kalimantan, Upicol Houston|
|Southeast Sumatera||CNOOC SES Limited, Inpex Sumatra, CNOC Sumatera, Talisman, Risco Energy|
|North Sumatera Offshore||Pertamina|
|Tengah||Total E&P Indonesia|
|East Kalimantan||Chevron Indonesia Company|
Source: Bisnis Indonesia
Meanwhile, Pertamina International Exploration and Production (PIEP), unit of Pertamina, announced it bid successfully for a higher stake in French oil company Maurel and Prom. PIEP increased ownership in the Paris-based company from 24.53 percent to 64.46 percent, hence becoming the controlling shareholder. This move is part of Pertamina's strategy to expand aggressively overseas amid improving global crude oil prices.