East Kalimantan demands 19% of Mahakam

By Godang Sitompul

The East Kalimamtan provincial government together with the provincial council (DPRD) demand a 19 percent participating interest (PI) in the Mahakam block after the expiry of the current contract, saying they would not back down on the demand.

Under the newly-released Minister of Energy and Mineral Resources (MEMR) Regulation No. 15/2015 on the extension of expiring contract, the regional government may be given a 10 percent PI in the block whose contract has been extended.

?We want to the ministerial regulation to be reviewed. It must be easy to review the regulation. We shall not step backwards any millimeter from the demand,? East Kalimantan?s Governor Awang Farouk said on Thursday.

The government has decided to give 70 percent of Mahakam to Pertamina and the East Kalimantan government and 30 percent to Total EP Indonesia and INPEX Corp., the current holders of the PSC on Mahakam.

Aside from the 19 percent PI, the governor and the council also made several other demands:

First, the central government unveils should give freedom to the East Kalimantan province and the Kutai Kartanegara regency to choose partners, either Pertamina or private companies, in holding the 19 percent PI.

Second, the province should be allowed to place its representative in the operatorship management.

Third, Pertamina or the central government is obliged to build pipelines to distribute the Mahakam gas to three ec economic clusters of the province, namely the Kariangau - Buluminung, Balikpapan/PPU economic zone, gas and condensate industry cluster in Bontang, and the Maloy, Batuta, Trans Kalimantan economic zone.

Fourth, Pertamina and the central government are obliged to provide welfare to the East Kalimantan people by allowing them to fully enjoy gas produced in the province, including developing gas distribution pipelines to all households in all regencies and cities of East Kalimantan.

Fifth, Pertamina must transfer all its assets in the province which is not part of its core business for the sake of the province?s interest.

Sixth, Pertamina must guarantee the supply of oil fuels as much as East Kalimantan needs.

Seventh, the East Kalimantan government rejects the plant to pipeline gas from its area to Java through the Kalija project.

Eighth, the East Kalimantan government must be allowed to obtain data and information regarding production and finances resulting from Mahakam.

Ninth, the government through Pertamina is obliged to realize the development of a refinery in Bontang with a capacity of 300,000 barrels per day.

Editing by Johannes Simbolon