EXCLUSIVE: Provinces must pay for stakes in foreign oil, mining firms: Purnomo

Minister of Mineral Resources and Energy Purnomo Yusgiantoro said that provincial administrations were allowed to own a stake in foreign oil and gas and mining companies via the approval of the central government and as long as they pay for the stake.

In a brief interview on Friday with Petromindo.com, Purnomo also said that the provincial administration could not be freely to borrow overseas to finance the investment plans because it could risk the central government to be forced to cover the borrowing in the future if for a certain reason the regional government failed to service the debt.

Purnomo was commenting on reports that the provincial administration of Aceh has strong interest to ows a stake in oil and gas firm PT Exxon Mobil, while the Papua administration wants to have a stake in the giant gold mining firm PT Freeport Indonesia.

"If they want to have an equity (in the above companies) they must be prepared with the fresh money," Purnomo said.

Purnomo added that the government was drafting a special law on Aceh and Papua province. He said that the special bill on Aceh has been completed and would soon be submitted to the House of Representatives to be debated.(Godang S.)