Jonan said both the Indonesian Petroleum Association (IPA) president, Christina Verchere, and the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) had questioned the ministry’s decision to hand over the oil and gas fields to Pertamina. However, he insisted that the move was mostly connected to minimizing costs.

“My answer is no. We have given Pertamina a mandate to continue production at 10 concessions that will expire soon, including the Mahakam block from Total [E&P Indonesie] but if they do not perform well, we will end it,” he said during the opening of the first Indonesia Energy Conference held at Hotel Mulia in Central Jakarta on Tuesday.

So far, the government has announced eight expiring oil and gas fields that Pertamina will take over, namely the Offshore Northwest Java (ONWJ), Southeast Sumatra (SES), East Kalimantan, Tengah, North Sumatra Offshore (NSO), Sanga-sanga, Ogan Komering and Tuban blocks. The contracts will all be renewed under the new gross-split scheme.

“We believe Pertamina has cost leadership, but if you can create a much cheaper partnership with the government than Pertamina can, I’ll go with you not Pertamina,” he said, addressing oil and gas contractors in the audience. (ags)

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