Indonesian state-owned oil and gas company Pertamina will take over the operation of the Rokan oil block, which is the country’s second-biggest crude oil-producing field, once Chevron’s operating contract expires in 2021, according to media reports. Additionally, Pertamina will invest $2 billion over the next four years to reverse the declining production at the legacy asset.
Rokan has been an area of focus for Chevron and asked Indonesia to extend its operating contract beyond 2021. Pertamina also mentioned that it plans to boost production at Rokan, which produces about a quarter of Indonesia’s total oil output, to 165,000 barrels per day by the end of the year. At the end of July this year, output stood at 160,500 barrels per day and 41 million cubic feet per day of natural gas.
Between August and December, Pertamina will drill 161 new wells at the block which will help increase output, upstream regulator SKK Migas revealed in a statement. Deputy Energy Minister Arcandra Tahar said that a proposal made by Chevron for an extension of its contract after 2021 was way below an offer made by Pertamina.
Pertamina will operate Rokan from August 2021 to 2041 under a gross split production sharing contract. Tahar also mentioned that the terms and conditions have been agreed upon and all that is left is a document that will be signed by Pertamina and the government.
Chevron Asia Pacific Exploration and Production External Affairs Advisor Cam Van Ast told the media, “While we are disappointed to hear the news, we are coordinating with respective parties to seek more information. Chevron has been a proud partner with Indonesia for more than 90 years.”