Page 7 - AsianOil Week 45

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Indonesia extends Corridor PSC by 20 years
PROJECTS & COMPANIES
THE Indonesian government has extended the production-sharing contract (PSC) for the onshoreCorridorBlockinSouthSumatraProv- ince by 20 years until 2043.
US super-major ConocoPhillips operates the block in partnership with Indonesia’s state-owned Pertamina and Spanish major Repsol. The three companies have agreed to pay a $250mn signature bonus for the extension and have committed to a $250mn, five-year development plan.
The partners have also agreed to adjust their stakes in the project in Pertamina’s favour once the 20-year extension period begins in 2023. The state company will see its participating interest rise from 10% to 30%, while ConocoPhillips’s stake will shrink from 54% to 46% and Repsol’s interest will fall from 36% to 24%.
The new contract will give the companies a 53.5% share of the block’s gas production and 48.5% of its oil output. Corridor’s natural gas output averaged 1.1bn cubic feet (31.15mn cubic metres) per day, or 12% of the national total, Indonesian Energy and Mineral Resources Minister Arifin Tasrif said on November 11 at the signing ceremony. The block also produces 6,600 barrels per day (bpd) of oil and condensate.
“The government sees that the existing con- tractors have the technical and financial capabil- ity to continue developing the Corridor Block,”
Tasrif said. “I ask that contractors not only main- tain existing production rates but also increase oilandgasproductionrates.”
The move comes as the country struggles to reverse a steady decline in its oil and gas pro- duction. Indonesian crude output has almost halved from a peak of 1.67mn bpd in 1991 to 808,000 bpd in 2018, according to BP’s Statistical Review of World Energy 2019. Gas production, meanwhile, has fallen from a peak of 87bn cubic metres in 2010 to 73.2 bcm in 2018.
Prior to the government’s decision to extend the existing consortium’s contract, observers had speculated that Jakarta would opt simply to award the block to Pertamina. The state-owned company has already taken over several oil and gas fields whose contracts were expiring, includ- ing the high-profile onshore Rokan block and offshore Mahakam field. However, Pertamina’s ability to develop fields that are strategically important to the country has been called into question after Mahakam’s output fell below target. Pertamina is now expected to transition slowly into an operational role at Corridor.
“Pertamina remains committed to devel- oping this block [Corridor], whose fractured basement play [topography] is a challenge for us,” Pertamina’s upstream director, Dharmawan Samsu, said at the signing ceremony.™
PTT’s Q3 profit shrinks 33%
PERFORMANCE
THAILAND’S state-owned PTT saw its third-quarter net profit declined by 33% year on year to THB20.25bn ($669.7mn) on the back of weaker downstream and international trading performances.
The company said on November 12 that quarterly earnings before interest, tax, depre- ciation and amortisation (EBITDA) had fallen 29.6% year on year to THB67.7bn ($2.24bn). The company attributed the slump to stock losses racked up by its downstream division on the back of a decline in crude oil prices as well as lower olefins and aromatics spreads.
The state major’s natural gas business also saw its margins squeezed during the quarter, owing to lower reference petrochemical prices. These pressures resulted in quarterly revenue slipping 11% year on year to THB538.44bn ($17.81bn).
PTT’s net income for the first nine months of the year dropped 24.6% y/y to THB24.64bn ($814.6mn), which it said was in line with a 22.6% drop in the period’s EBITDA, which amounted to THB222.02bn ($7.34bn). Reve- nue for the period shrank by 3.4% on the year to THB1.66tn ($54.89bn).
The group’s assets amounted to THB2.42tn ($80.02bn) as of September 30, up 2.8% from December 31, 2018. The company attributed the increase to gains made via its subsidiaries’ acqui- sitions of Glow Energy and Murphy Oil.
Global Power Synergy Co. (GPSC) com- pleted its acquisition of a 69.1% stake in power producer Glow in March, while PTT Explora- tion and Production (PTTEP) acquired Murphy Oil’s Malaysian business in July.
While PTT’s downstream arms may have struggled, its upstream assets provide some much-needed relief.
PTTEP’s nine-month net profit climbed by 39% y/y to THB37.2bn ($1.23bn), owing to higher sales volumes stemming from the increase in producing assets. Revenue expanded by 15% y/y to THB143bn (4.73bn).
“PTTEP’s strong performance reflected the successful acquisition in Malaysia in line with the strategic investment plan,” PTTEP president and CEO Phongsthorn Thavisin said. “The result is demonstrated by growing average sales volume, with the 2019 target of 345,000 boepd.”™
Week 45 13•November•2019 w w w . N E W S B A S E . c o m P7