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Pertamina’s takeover of eight blocks may face further delays
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The logo of state-owned oil and gas company Pertamina. (Shutterstock.com/Casimiro PT )
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tate-owned oil and gas holding firm Pertamina might be unable to soon realize the takeover of eight expiring oil and gas blocks amid a prolonged disagreement with the government over the allocation of participating interests in each block.
The Energy and Mineral Resources Ministry initially instructed Pertamina to take over eight upstream blocks, all of which would see their contracts with existing operators expire this year.
Pertamina had proposed to the ministry a partnership scheme for four of the eight blocks, through which it expects to sell some stakes in each block to partners. The four blocks are Tuban, Ogan Komering, Sanga-sanga and Offshore Southeast Sumatra.
However, the ministry decided to allocate the ownership portion of the four blocks in advance. Pertamina’s future partners will likely control some stakes in the blocks for free.
“What I said to Pertamina was the company could not deliberately sell some of its stakes [in the four blocks] to secure additional cash in advance. It could just make an arrangement with its partners over the obligation to pay the first cash call or the responsibilities of each stakeholder,” Energy and Mineral Resources Minister Ignasius Jonan said Wednesday.
A disagreement seemed likely, as the company had requested to be given an additional two months to sign the contracts for all of the eight mandated blocks. The company also planned to ask for legal assistance from the Supreme Audit Agency (BPK) or the Attorney General's Office (AGO) prior to the contract signing. (bbn)
