Pertamina has completed the data room entry process for the East Kalimantan Block. The state-owned energy company will now immediately submit a proposal to take over the block's management.
Pertamina's Senior Vice President for Upstream Strategic Planning and Operations Evaluation Meidawati said the company is still reviewing information retrieved from the data room. "We will submit a proposal to the government later this month," he told Katadata last weekend. (Read: Chevron Not Extending Contract, Pertamina Ready to Take Over East Kalimantan Block).
The company's Vice President Corporate Communications Wianda Pusponegoro also confirmed that the data room process had been completed. Pertamina will now hold a workshop led by the Special Task Force for Upstream Oil and Gas Business Activity(SKK Migas).
The workshop will discuss Pertamina's proposed work plan. "[It will be done] soon because we have coordinated well with the SKK Migas," Wianda told Katadata.
The East Kalimantan Block is currently managed by Chevron Indonesia Company. According to the Energy and Mineral Resources Ministry's records, Chevron has 92.5 percent management rights in the block. The remaining 7.5 percent belong to Inpex Corporation.
The block's contract will expire on 24 October 2018. Chevron has said they will not seek a contract extension. (Read: Inpex Not Planning to Extend East Kalimantan Block Contract).
Previously, Chevron IndoAsia Business Unit's Managing Director Chuck Taylor said they would return the assets to the Indonesian government. "This decision does not affect our commitment to preserve our 90-year partnership history in Indonesia or carry out strategic projects such as the Indonesia Deepwater Development Project (IDD)," he said in an official release early this year.
Pertamina's desire to manage the East Kalimantan Block came under the National Exploration Committee's (KEN) spotlight. KEN asked Pertamina to be careful before taking over the block. One area of concern for Pertamina should be the global price of oil.
KEN chair Andang Bachtiar said Pertamina must recalculate the block's commercial value. He said the block will not offer any profit if oil prices continue to fall until Chevron's contract ends, especially if the price goes near US$ 20 a barrel.(Read: Pertamina Asked to be Careful About Taking Over East Kalimantan Block).
Pertamina must also take into account the block's unique characteristics. The East Kalimantan block is an old one that has been operating since 1968. According to Andang, older fields tend to have depleting reserves.