The deal concludes one of the more challenging of nine elements related to the block’s nationalization, which also include transferring data, manpower and licenses from CPI to Pertamina Hulu Rokan.
tate-owned electricity company PLN has signed a deal that would ensure continued electricity supply to the Rokan Block in Riau, clearing a key hurdle in the government’s nationalization of Indonesia’s second-most productive oil block.
PLN signed a sales and purchase agreement to acquire full ownership of PT Mandau Cipta Tenaga Nusantara (MCTN), the company that supplies most of the block's electricity, from PT Chevron Pacific Indonesia (CPI), which currently operates the block and is controlled by Chevron Corporation in the United States.
CPI had initially intended to auction off MCTN as part of its Rokan Block exit plan, a move that regulators feared would disrupt electricity supply to the off-grid site. PLN did not disclose the value of the deal reached with CPI but previously said it would offer around $30 million to acquire MCTN, much lower than Chevron’s offer price of $300 million.
“This deal is very important to ensure the continued supply of electricity to the Rokan Block in the coming years,” Deputy SOE Minister Pahala Mansury said during the signing ceremony for the deal on Tuesday.
The deal concludes one of the more challenging of nine elements related to the block’s nationalization, which also include transferring data, manpower and licenses from CPI to Pertamina Hulu Rokan, an upstream subsidiary of state-owned oil and gas giant Pertamina.
CPI, which has operated the Rokan Block since 1971, is slated to hand over the site to Pertamina on Aug. 8.
Read also: Pertamina wins lucrative Rokan Block contract
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