Oil price hikes prompt re-exploitation of abandoned oil block

Palu, C Sulawesi,  (Antaranews Sulteng) - JOB Pertamina Medco E&P Tomori has been prompted to plan re-exploitation of earlier abandoned Tiaka oil block by rising oil prices in the world market.

Based on business analysis, the Tiaka oil block in the regency of Morowali Utara, Central Sulawesi is feasible with the rise in the oil prices in the world market, Business Support Manager JOB Pertamina Medco E&P Tomori, M Ferry Bagja said.

Ferry reported the plan to Governor Longki Djanggola at a meeting here on Thursday, also attended by Operation Senior Manager of the Oil and Gas Upstream Regulator (SKK Migas) for Kalimantan and Sulawesi Roy Widiartha and Field Manager for Dongi Matindok of PT Pertamina EP Munir Yunus.

Munir Yunus said that oil production from Dongi-Matindok is enough to meet export contract but there has not been production for local requirement mainly for the national power utility PLN, which is to have a 20 percent share of the production.

Governor Longki said thorough studies should be made before embarking on the re-exploitation plan as the operation of the oil block has inflicted losses to the regional administration.

"Thorough studies should be carried out first to prevent further losses to the provincial administration," he said giving no details about the losses.

He said the regional administration has established a company which will have a 10 percent share in the venture.

He said he hoped SKK Migas is transparent about production data so as not to cause any suspicion as it concerns the amount of income and share of the regional administration in line with the law.

By the end of 2016, Field Manager of JOB Pertamina Medco E&B Tomori Susanto told the governor that operation of the oil block was temporarily stopped as it was no longer feasible amid the falling oil price in the world market.

At that time Susanto said the company would re-operate the oil block if oil price would rise to more than US$60 per barrel.