Headlines

After BPMigas, the next
target is Mahakam

After “successfully” eliminating BPMigas, some of the individuals who ultimately brought down the former upstream oil and gas regulator through the Constitutional Court are currently keeping their eyes on the fate of the Mahakam block in East Kalimantan.

The Indonesian Resources Studies (IRESS) director Marwan Batubara on Thursday gave a list of demands to the House of Representatives asking lawmakers to push the government to hand over control of the gas-rich block to state-owned oil and gas firm PT Pertamina after the concession expires in 2017.

“We want the government to stop dragging its feet and award the majority stake of the block to Pertamina, appointing it as its operator once the contract expires,” Marwan told The Jakarta Post after meeting House Deputy Speaker Pramono Anung, a politician with the Indonesian Democratic Party of Struggle (PDI-P), a major opposition force in the House.

The fate of the Mahakam block, currently jointly held by France-based Total E&P Indonesie and Japan’s Inpex with the former being the block’s operator, has been the most anticipated of the 29 concessions due to expire between 2013 and 2021

The so-called Mahakam petition was endorsed by several individuals who previously supported the dissolution of BPMigas through a judicial review of the 2001 Oil and Gas Law, several parts of which were granted by the court last week.

The individuals supporting the petition include energy analyst Kurtubi, who is associated with state oil and gas company PT Pertamina as well as former ministers Kwik Kian Gie and Rizal Ramli.

The chairman of Indonesia’s second-largest Muslim organization, Muhammadiyah, Din Syamsuddin, has also signed the Mahakam petition, Marwan said.

Marwan, who has affiliations with the Islamic-based Prosperous Justice Party (PKS), confirmed that the disbandment of BPMigas would ease the group’s steps to push the government to meet its demands.

“BPMigas had the role of giving recommendations to the government. They will not receive any from them again,” he said.

The government has created a new task force, filled with former officials of BPMigas under the supervision of the Energy and Mineral Resources Minister Jero Wacik, to temporarily take over the regulatory functions until a permanent body is formed.

Pertamina has been dubbed as the beneficiary of the court’s decision to serve as the operator and the regulator of the nation’s oil and gas industry, a role that Pertamina did before the inception of BPMigas in 2002.

While brushing off the idea of Pertamina “going back to old times”, Pertamina president director Karen Agustiawan told reporters on Wednesday the firm would carry on with its ambition to become the operator of the Mahakam block following the dissolution of BPMigas.

Elisabeth Proust, the president director and general manager of Total E&P Indonesie, said the company would continue its investment plans in the block even though its future was uncertain.

“We have submitted our work plan and budget for 2013 to the new task force,” she said, citing that both Total and Inpex combined investment for the block was around US$2 billion to $2.5 billion per year.

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