Total Proposes 5-Year Transition on Mahakam Gas Block

Jakarta (Antara) - Total Exploration and Production (Total E&P) Indonesie proposed a five-year transition in the transfer of the operation of the Mahakam block in East Kalimantan, after the termination of its contract in 2017. \"It is already announced that the government will make a decision in the next several weeks . Whatever the decision and its long term effect, we ask the government to allow a five year transition,\" President and General Manager of Total E&P Indonesie, Hardy Pramono said here on Friday. The government has said it will hand over the operation of the gas block to the state oil and gas company PT Pertamina after the termination of Total\'s contract in 2017. Hardy said among the goals of the proposed transition is to make the process of transfer smooth from Total to Pertamina and to secure the investment program needed to maintain productivity in the coming years. \"In addition to guarantee implementation of commitments in gas shipments to domestic and international buyers,\" he said. He said during the transition period Total E&P will apply a comprehensive program to guarantee smooth process of transfer to Pertamina. \"For example, program of human resource development and training and transfer of competence in handling the latest technology,\" he cited. In addition, there will be assistance to build skill center which will back up all operational activities by Pertamina. \"Total E&P already has long experience in the various processes, he said, adding a number of years earlier Total succeeded in transferring operation in Bongkot, Thailand to Thai oil and gas company PTTEP.\" Earlier Secretary general of the energy and mineral resource ministry Teguh Pamudji said the government will make its final decision on the gas block in mid March. Head of the Performance Control Unit of the ministry Widhyawan Prawiraatmadja said the decision is to hand over fully the operation of the block to Pertamina. Pertamina could decide the next steps whether it would invite Total or not to take part in the operation of the block, Widhyawan said. He said the decision to hand over the operation of the gas block to Pertamina is in line with the Government Regulation No 35 of 2004. The regulation says Pertamina could propose to the energy and mineral resources ministry take over of oil and gas blocks after termination of contracts of foreign operators . Widhyawan said the option of involving Total could be considered under a swap scheme with Pertamina given a stake in Total\'s projects abroad. He said a contract between Pertamina and Total could be signed in 2015 although it would be effective only after the termination of Total\'s contract in 2017 . \"That will give a long transitional period for Pertamina before it will take over the operation of the block from Total,\" he said. During the transitional period, a number of issues related to the contract could be settled such as sales of gas and oil, supporting services and the workers, he said. Upstream Oil and Gas Director Naryanto Wagimin said the government will not interfere in making decision about the partners needed by Pertamina. (*)