JAKARTA, Indonesia—Indonesia will grant state-owned Pertamina
70% control of its giant Mahakam oil-gas field at the end of 2017,
leaving France's Total SA and Japan's Inpex Corp., the longtime
operator and investors in the project, the remaining 30% share.
Energy Minister Sudirman said Friday there would be no more
negotiations about the stakes decision. "So Total and Inpex will
report this decision to their head offices," he said.
It wasn't immediately clear how or whether Total and Inpex,
which have run the project with 50-50 shares for more than 40
years, would split their stake. Total, the field's operator, said
it couldn't comment until the decision had been considered by
company executives.
The administration of President Joko Widodo earlier this year
said it would turn over the giant field off the east coast of
Borneo to Pertamina when the government's contract with Total and
Inpex expires at the end of 2017. The government is exploring the
same option with other expiring contracts.
Questions abound over whether Pertamina could handle the mammoth
job of running Mahakam, which accounts for a quarter of Indonesia's
gas output and almost 10% of its oil flows. Pertamina is
profitable, but carries heavy debt, is stretched thin with other
projects and is seen lacking Total's operational capacity in a
complex field.
Pertamina chief executive Dwi Soetjipto reiterated Friday that
the company had prepared $2.5 billion for annual exploration and
other development activities, roughly what Total has said the
project requires to stay near current levels of production. Total
and Inpex have invested more than $30 billion in the project over
the years, but output has been declining as the field ages.
Mahakam is forecast to continue producing oil and gas until
2032.
Mr. Said, the energy minister, also said the government will
discuss giving part of Pertamina's share to the regional government
in Borneo.
Write to Ben Otto at ben.otto@wsj.com and Deden Sudrajat at
deden.sudrajat@wsj.com
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