Pertamina and PetroChina have made a joint proposition to work the Jabung Block in Indonesia's Jambi region when the current agreement lapses in 2023. The move denotes a huge defining moment, as before Pertamina would consequently takeover key heritage creation sharing agreements (PSCs) set to lapse.
Petrochina International Jabung Ltd is currently the operator of the Jabung Block with 27.85% management rights. Apart from PetroChina, Pertamina through PT Pertamina Hulu Energi (PHE) Jabung has the right to manage 14.28%. Other management rights holders are Petronas Carigali at 27.85% and PT PP Oil & Gas at 30%.
SKK Gigas, an upstream regulator, has considered a joint proposal. According to local media, it was submitted to the Ministry of Energy and Mineral Resources for approval. SKKMigas selected Indonesia's Top 9 Oil Producers and Top 9 Gas Producers Jabung Block in 2020.
Rising resource nationalism has seen the government provide Pertamina with oil and gas blocks that will expire in the last few years and replace international oil companies. The IOC that was running the existing contract) is important that the size of some of these assets presents technical and financial issues to the NOC.
Indonesian State Oil Company (NOC) Pertamina is currently trying to downsize some shares of major domestic assets carried over from IOCs coming out of Indonesia. Pertamina, who manages block 86, said it was seeking a strategic alliance.
For Indonesia, with a production of 10 thousand barrels per day (BOPD), the Jabung Block is quite attractive for oil and gas companies. Moreover, there is still potential for further development and optimization, so that production can increase by 20% to 30%.
Until the end of March 2021, SKK Migas recorded that the Jabung Block's average oil production reached 14,760 bopd or 92.3% of the block's target as stated in the Revised State Budget (APBN-P) 2021. Meanwhile, the realization of gas lines reached 171 million standard cubic feet per day (MMSCFD) or 94.7% of the target.