Conflicts over participating interest hamper oil, gas block development

By Godang Sitompul

Conflict among regional governments over rights to participating interest in oil and gas blocks have become a major obstacle for contractors in making final investment decision (FID) to develop the block, according to upstream authority BPMIGAS.

BPMIGAS expects that both the provincial and regency administrations to be able to resolve their internal conflicts, to allow amicable process in the distribution of the shares in the oil and gas blocks located in their respective regions.

?We hope that the local administrations (governors and regents) to negotiate and reach agreement over the distribution of the participating interest so that the government can approve it and the final investment decision can be made,? BPMIGAS Deputy for Operational Control, Gde Pradnyana told Petromindo.com Monday.

Gde said that a number of oil and gas blocks have been hit by such problem including the Pase Block owned by Triangle Energi, WMO block owned by Pertamina Hulu Energy and Kodeco, and Masela Block owned by Inpex Corp.

Editing by Reiner Simanjuntak