Govt asked to transfer old oil wells to local administration

State owned oil and gas company Pertamina has proposed the central government to transfer the operation of old oil wells to provincial administration in a bid to improve the local economy and create job opportunities, Bisnis Indonesia reported on Monday.

Idris Kamidjo, the general manager for the operation and exploration of Pertamina's unit in Cepu, Centra Java said in Yogyakarta on Saturday that the transfer of the old oil wells to provincial authorities could also help the state owned oil company to promote business efficiency.

"Ideally, the old oil wells are operated by the local authority in cooperation with cooperatives in order to create more job opportunities and help the economy of the local government," he said. He added that the proposal had been submitted to the government but no response had been received.

According to Idris, according to the existing Oil and Gas law, Pertamina still holds the rights operate hundreds of old oil wells mostly left behind by the Dutch government. The oil wells, mostly located in Central Java are no longer viable, if operated by a big company like Pertamina because they are still operated through non-mechanical equipment.

He said that if the oil wells are operated by small-scale companies or cooperatives, they are still economically viable because the involvement of small firms could reduce operational costs. "At least 40 non-mechanical oil wells in Cepu are currently operated by cooperatives in cooperation with Pertamina. The result is quite promising because they could generate earnings for the cooperatives," he added. (*)