Govt to make decision on 4 oil-gas contracts this year
Monday, January 16 2012 - 03:26 AM WIB
The government will assess and decide on certain four oil and gas contracts this year, whether to extend the existing contracts or hand over the operating of the blocks to other parties, said Evita Legowo, Director for Oil and Gas at the Directorate General for Oil and Gas of the Energy and Mineral Resources Ministry.
?True that we are assessing the proposed extension of four productive oil and gas contracts,? Evita told Petromindo.com.
Evita only mentioned three blocks. Three of the four blocks are Mahakam Block in East Kalimantan operated by Total, Pase Block in North Sumatera operated by Triangle Energy and Siak Block in Riau operated by Chevron, said Evita.
Evita said the government has offered the four blocks to Pertamina. Pertamina is only interested in operating Mahakam Block. Pertamina said it is not interested to operate the other three blocks offered by the government.
Evita however stressed that it is not automatic that the government will award the Mahakam block to Pertamina. The government has certain considerations before awarding the contract.
Mahakam Block will expire in 2017. Total has proposed to extend its contract in operating the block.
Evita said there are some considerations before extending or awarding a contract. These include, the oil and gas potentials of a particular block, the amount of additional investment needs to boost production and the level of complexity in operating the block.
When asked about the call by some legislators and observers that oil and gas contracts that expire are automatically handed over to Pertamina and that this will be included in the planned Oil and Gas Law revision, Evita indicated her disagreement.
She argues that Pertamina is not interested in all blocks that expire. ?We (the government) are involved in the drafting of the law. We certainly have certain considerations over the matter,? Evita said.
As for block which will expire and the operator is not interested to extend its contract, the government will tender the block or conduct joint study before a contract is awarded.
Editing by Roffie Kurniawan