Japan’s Inpex will sign a heads of agreement (HOA) with Indonesia’s state-owned oil and natural gas company Pertamina, and France’s Total, on the basic principles towards participating in the Offshore Mahakam Block in Indonesia after 2018.
The Japanese firm is currently engaged in the development and production of oil and natural gas in the Mahakam Block in partnership with Total, the operator, under a production sharing contract set to expire at the end of 2017.
The ownership is evenly split between Total and Inpex, with each company holding a 50% stake. Total has been the operator of the block since 1970, when it bought a stake from Inpex, which had acquired the block in 1966.
Inpex and Total have been in discussions with Pertamina and the Indonesian government authorities with the aim of extending or renewing the current production sharing contract upon it expiry.
The Indonesian government in June said Pertamina would take over as the operator starting 2018, with Total and Inpex offered a 30% stake.
According to Inpex’s statement on Monday, the HOA stipulates that the parties will hold discussions on matters including the smooth transfer of operatorship from Total to Pertamina and the participation of Total and Inpex in the Mahakam Block after 2018.
“Inpex will work in close partnership with Total and, in accordance with the HOA, continue to hold discussions with Pertamina and the Indonesian government authorities with the aim of participating in the the Mahakam Block after 2018,” Inpex said in a statement on Monday.