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Pertamina’s privileges may be revoked if efficiency not improved
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Energy and Mineral Resources Minister Ignasius Jonan (left). (ANTARA FOTO/Puspa Perwitasari)
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nergy and Mineral Resources Minister Ignasius Jonan has warned of a possible revocation of state-owned energy giant Pertamina's managerial privileges in oil and gas blocks—the contracts of which with private companies are set to expire—if the company fails to improve its efficiency.
“I have sent a letter to the State-Owned Enterprises Minister to evaluate [the performance of] Pertamina,” said Jonan as reported by tempo.co on Monday, adding that based on his own assessment, the company had not significantly cut its operational costs.
He said that in 2016, the government disbursed Rp 154.2 trillion (US$11.6 billion) to cover Pertamina's operational costs, while the company’s revenue stood at Rp 84.7 trillion.
Under Ministerial Regulation No. 15/2015 issued by the Energy and Mineral Resources Ministry, Pertamina was permitted to manage all oil and gas blocks. “The privilege is given to Pertamina as long as it can be efficient,” Jonan added.
So far, the government has allowed Pertamina to fully manage eight oil and gas blocks through contracts with private companies that are set to expire in 2018.
Meanwhile, PT Pertamina Hulu Energi president director Gunung Sardjono Hadi said his company, a subsidiary of Pertamina, had started to reduce operational costs since 2015 through, for example, contract renegotiation and other efficiency measures in daily operational costs.
He said that with the new gross split contract scheme introduced by the government, the operational cost of contractors would not be recovered.(bbn)
