Fate of eight oil, gas blocks to be decided next week
Viriya P. Singgih
The Jakarta Post
Shortly after he took office, Djoko Siswanto -- the Energy and Mineral Resources Ministry’s new oil and gas director general -- pledged to sign the contract for the development of eight expiring oil and gas blocks next week, including the ones to be taken over by state-owned energy giant Pertamina.
“We will expedite the process. The target [for the contract signing] is next week,” Djoko told reporters on Wednesday.
The ministry has previously mandated Pertamina to take over eight upstream oil and gas blocks, all of which will see their contracts with existing operators expire this year.
In the process, the ministry has given the existing contractors of four of the eight blocks, namely Tuban, Ogan Komering, Sanga-sanga and Offshore Southeast Sumatra, a chance to submit a work program and budget proposal to extend their tenure. Their proposals will be compared to the ones submitted by Pertamina.
“If the proposals from existing contractors are better, they will be allowed to extend their operations in their respective blocks by teaming up with Pertamina. But if their proposals are not better, we will give the blocks to Pertamina,” Djoko said.
He said it was possible that the ministry would eventually give Pertamina an 80 percent interest in a block and grant 10 percent each to the old contractor and the relevant regional administration where the block was located. If so, the old contractor would later be allowed to buy more interests directly from Pertamina based on a business-to-business approach, he added. (bbn)
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