MEMR set to issue regulation on expiring oil, gas contracts

Minister of Energy and Mineral Resources (MEMR) Sudirman Said stated that a new minister regulation on how to deal with oil and gas blocks whose contracts are set to expire is expected to be issued today, Bisnis Indonesia reported Thursday.

Sudirman said that he has signed the regulation.

He explained that there are four options on what to do with blocks whose contracts expire.

The first is to extend the contract of the existing operator. Second is to hand over the block to state-owned oil and gas firm PT Pertamina. Third is to let the block to be jointly operated by Pertamina and the existing contractor. And fourth is to offer the block via tender if Pertamina is not interested in it.

The new regulation will also arrange a transition period for oil and gas blocks whose contracts are set to expire. According to the regulation, holders of participating interest in a block are banned from transferring majority part of the interest to non-affiliated party. (*)