Pertamina Plans $2 bn Investment in Indonesia's Mahakam Gas Block

Pertamina would invest around $2 billion annually into the Mahakam gas block in Indonesia if given control, news agency Reuters reported Friday citing a company official.

The company would aim to produce 1.2 billion to 1.5 billion cubic feet of gas per day (bcfd) from the block, the official said.

The government plans to hand Pertamina control of the block once the contract of current operator, Total SA, expires in 2017, Reuters said.

A week ago the state owned firm submitted its investment plan for the block to the government, which is expected to decide on its future by March.

According to Reuters, analysts have questioned Pertamina's technical and financial capacity to operate Indonesia's single-largest source of natural gas, situated in East Kalimantan province, and maintain current production levels - around 1.7 bcfd last year.