US-based energy giant Chevron has announced its decision that it will not extend its contract to operate the East Kalimantan oil and gas block in Indonesia.
Chevron IndoAsia business unit managing director Chuck Taylor said that the company will give back the block to the government after the contract expires on 24 October in 2018.
The latest decision comes at the time of declining global oil prices.
Taylor added that the company’s latest decision will not affect its strategic projects.
Reuters quoted a company spokesman saying that Indonesia’s Bontang liquefied natural gas plant receives up to 70 million standard cubic feet per day (mmscfd) of gas from the East Kalimantan block at present.
The block also supplies 20,000 barrels of crude per day to the Balikpapan refinery.
In December 2015, Chevron announced plans to sell its stake in the South Natuna Sea Block B in Indonesia.
Indonesia upstream oil and gas regulator (SKKMigas) spokesman Elan Biantoro said that the company has operated the block for nearly 50 years.
SKKMigas said oil and gas companies in the country are targeting a 2% decline in average daily output to 1.944 million barrels of oil equivalent per day (boepd) in 2016.
