Indonesia’s state run oil and gas company Pertamina is in talks to raise the price it receives for natural gas from a block in Malaysia.
The Jakarta Post reported that Pertamina had entered talks with Malaysia’s Petronas and PetroVietnam Exploration & Production (PVEP) after it realised the SK 305 Block contained natural gas that it believed it could not sell for a good price.
The newspaper quoted the president director of Pertamina subsidiary Pertamina Hulu Energi, Salis S Aprilian as saying that Pertamina and PVEP agreed to negotiate a gas price that was more economic and competitive.
According to Salis, Pertamina sells its natural gas to Petronas for $1 per million British thermal units, while he stated the average sale price in Malaysia was between $5 and $6 per mmBtu.
“We expect to raise it to around $3.80 to $5 per mmBtu. I guess we would not raise it over $6,” the Jakarta Post quoted Salis as saying.
Negotiations are expected to be completed later this month.
Output at Block SK 305 currently averages about 22 million standard cubic feet of gas per day and 2000 barrels of oil per day.
Pertamina holds a 30% share in the block, while Petronas owns 40% and PVEP holds the remaining 30% share.