Pertamina Hulu Energi Siak (PHE Siak), operator of the Siak PSC located onshore in the Central Sumatra Basin, signed the Transfer Agreement and Management of 10% Participating Interest (PI) with PT Riau Petroleum, a company controlled by the regional government, on 7 August 2018.  The signing ceremony was held at the Pauh Janggi Hall, located in the district of Pekanbaru, witnessed by the Governor of Riau and Head of SKK Migas of North Sumatra. The allocation of the 10% PI is in compliance with Ministerial Regulation No. 37/ 2016, aimed at providing direct benefits from oil and gas activity to the local administrations.  PHE Siak will retain operatorship and 90% interest in the block. The company has been operating the block since May 2014, after the previous PSC with Chevron expired in November 2013. In November 2014, PHE commenced its cooperation with PT Riau Petroleum in the block. As of September 2015, the discussion to define the share composition between PHE and Riau Petroleum was ongoing.  PHE is targeting to produce approximately 1,800 bo/d from the block in 2018. Production comes from the Lindai, Manggala South and Batang fields.    The latest activity in the block is the drilling of exploration well Kumis 2, in March 2018. The well is intended to re-investigate shallow oil potential in the Kumis structure located within the southern portion of Siak PSC Area III. The first well drilled in the structure, Kumis 1 (Chevron, 1996), encountered oil shows.  Background Information  The 12,328 sq km C&T "A, B & C Blocks" COW was awarded to Caltex, a joint-venture of Chevron subsidiary California Asiatic Oil Co (or Calasiatic) and Texaco subsidiary Texaco Overseas Petroleum Co (or Topco), on 28 November 1963 and covered areas previously lightly explored by Stanvac and Caltex under earlier concessions. Caltex paid signature bonus of USD 5 million and committed to work programmes amounting to USD 14 million. On 28 March 1991, the COW was converted to PSC terms and re-named as Siak PSC under newly established subsidiaries Chevron Siak Inc and Texaco Siak Inc. Signature bonus paid was USD 5.2 million and the work commitment was USD 38 million for 10 years.   In September 2010, Chevron submitted to regulator BPMIGAS a letter expressing its intent to pursue an extension. BPMIGAS said in mid-January 2011 that Chevron had until November 2011 to submit a formal proposal for the extension. According to the national upstream oil and gas regulator, the previous letter was not valid as it did not include specific plans about development plans and investment commitments for the block.  The PSC with Chevron expired on 27 November 2013 and was not extended by the government, which opted to award the block to Pertamina for a new 20-year term.
Pertamina Hulu Energi Siak (PHE Siak), operator of the Siak PSC located onshore in the Central Sumatra Basin, signed the Transfer Agreement and Management of 10% Participating Interest (PI) with PT Riau Petroleum, a company controlled by the regional governmentLindai