REPUBLIKA.CO.ID, JAKARTA - Government must decide who will manage Mahakam block in East Kalimantan because contract with Total E&P Indonesie, a French company, will expire in 2017. Energy analyst of Indonesian Resources Studies (IRESS), Marwan Batubara said the delay only worsen investment climate in Indonesia. 

Total, he said, would not carry out exploration for new wells if there is no certainty extension contract. "Other investors will also see complexity and urcertainty in managing the contract," Batubara said on Sunday.

During a meeting with Minister of Energy and Mineral Resources Jero Wacik, Senior Vice President of Total E & P Asia Pacific Jean Marie Gullermo offered 30 percent of shares to Pertamina. The shares are from Total and Inpex, both now control Mahakam Block and each owns 50 percent of shares. If the offer is accepted, Total will own 35 percent of shares, Inpex 35 percent, and Pertamina 30 percent. 

But Batubara said, Pertamina alone could have managed the block. The Indonesian state owned company has prove its capability to boost oil production in Offshore North West Java (ONWJ), from 12 thousand barrels per day (bpd) to 33 thousand bpd. 

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