REPUBLIKA.CO.ID, JAKARTA -- The government has been asked to manage the Mahakam oil and gas block through state-owned oil and gas company PT Pertamina after the work contract of PT Total E&P Indonesie expires in 2017.
Institute for Development of Economics and Finance (Indef) Executive Director Ahmad Erani Yustika said here on Tuesday that several quarters have urged the government not to extend PT Total's contract any further.
"We appreciate the government's move to entrust the management of the Makam Block to Pertamina. This has been our demand so far," Ahmad added.
Ahmad Erani, who is also a professor of economics at the University of Brawijaya in Malang, East Java, expressed hope that Pertamina will take over the operation of the oil and gas block.
"Pertamina has expressed its readiness to operate the oil and gas field, so the government must give them an opportunity to manage the Mahakam Block," he noted.
He observed that the government should manage Pertamina in field operation so that production can be maintained or even increased.
Should the government choose to cooperate with Total, it should ensure to draw maximal benefits, he said.
"Pertamina should remain the operator and hold the majority of shares," he emphasized.
"The Mahakam Block has been operated by Total E&P Indonesie for 50 years. Now it is Pertmina's turn to operate it," Ahmad argued.
He remarked that the oil and gas reserves of Mahakam were large enough that if Pertamina takes up its operation, it will still benefit and draw maximal advantage.
He urged the government to make a decision and give 100 percent participation rights to Pertamina.
Earlier, Geologist Rovicky Dwi Putrohari had observed that the Mahakam oil and gas block in East Kalimantan still had large oil and gas reserves.
"As a geologist, I see that the oil and gas reserves in the Mahakam Block are still large. It still holds a large 'upside potential,' or a field that has not yet been exploited," he revealed.
The government is planning to hand over the management of the Mahakam Block to state-owned oil and gas company Pertamina after the work contract of Total E&P Indonesie expires in 2017.
Pertamina can either take up the complete operation of the field or cooperate with Total on a compensation scheme in which the French company will offer one of its oil blocks overseas to Pertamina.
Rovicky, who is also a former general chairman of the Indonesian Geologists Association, said that the Mahakam Block has not been optimally developed yet.
Exploitation has not gone deeper yet. Efforts are on to draw oil and gas in the reservoirs that are hidden deep under what have been exploited so far.
The go-deeper technology is usually applied in high-pressure, high-temperature systems.
"The exploitation of the Mahakam Block has not yet reached the reservoirs, which are deeper and keep larger reserves. If it is done, I think, we will find larger volumes of reserves," he pointed out.
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