Friday, 19 July 2019 | 04:15 WIB

ENI Indonesia Agrees on Using Gross Split PSC for Merakes Field

ENI Indonesia Agrees on Using Gross Split PSC for Merakes Field (esdm)

JAKARTA NNC - ENI Indonesia Ltd, the operator of Merakes Field, has agreed to use Gross Split Production Sharing Cost (PSC) scheme to develop the gas field. The consideration of the Italian state-owned energy company in changing its contract into a gross split is better and efficient process. Second, the certainty or certainty of the amount of proceeds to be received by the Cooperation Contract Holders (KKKS), and the third is a simple process. KKKS will be simpler to carry out their activities because they no longer need to have a long discussion on cost issues with SKK Migas.

"For Merakes Field, ENI has agreed to change from cost recovery to gross split. We are targeting the Plan of Development/POD to be approved as well as PSC. The contract would amended no later than December 12, 2018. The point is the transfer process from PSC cost recovery to gross the split can take place very quickly. They propose, and we process less than a month, God Willing, the contract will turn into a gross split, "Arcandra said.

He continued that the transfer of development schemes carried out by ENI considered three factors that were the advantages of gross split, namely, first efficiency, both certainty and third simplicity.

With these three factors, the Cooperation Contract Contractor (KKKS) will get certainty about the amount of profit sharing they will receive by certainty. The second spirit is simplicity. With the gross split scheme, KKKS will be easier to carry out their activities because they no longer need to hold long discussions with SKK Migas regarding work plans and budgets, gross split schemes make the fiscal system simpler. The last spirit is efficiency. Using the gross split profit sharing scheme makes it easy for KKKS to procure goods and services themselves so that they are more efficient.

The East Sepinggan, East Kalimantan (Merakes FIeld) Block contract was signed on July 20, 2012 and will expire on July 19, 2042, with details of work that includes 10 years of exploration and the remaining 20 years of production. The composition of the shares for the development of the East Sepinggan Block comprises of 85% owned by ENI and 15%  owned byPertamina Hulu Energi East Sepinggan.

From the results of the exploration conducted by Eni, Merakes Field is predicted to have gas reserves reaching 814 trillion cubic feet (tcf) which are planned on March 2021 with an initial production rate of 155 Million standard cubic feet per day (mmcfd) and a peak production rate of 391 mmcfd. The age of Merakes Field up to its economic limit is nine years.