Minister offers solution over Mahakam block

By Godang Sitompul

Minister of Energy and Mineral Resources Sudirman Said offered Total E&P Indonesie (TEPI) to jointly develop the Mahakam block in East Kalimantan together with state owned oil and gas firm PT Petamina after the contract on the block expires in 2017. But, the French firm should offer Pertamina a stake in its asset overseas in return.

He said he would always prioritize state owned firms to develop blocks whose contracts have expired. But there are ?process? to be followed to realize it.

?If it is possible to hand over the (Mahakam) block, I will hand it over first of all to Pertamina. But, there is a process (to be followed to realize it),? he said on Sunday.

?Going forward, I will ask any companies that want to cooperate with Petamina, including Total, to help extend Pertamina?s arms overseas by offering their stake to the firm,? he said.

?Total should offer cooperation with Pertamina in its block overseas,? he said.

Mahakam block?s contract expires on Dec. 31, 2017. TEPI which owns the block in partnership with Japanese firm INPEX has several times requested for extension of the contract but the previous government of Susilo Bambang Yudhoyono remained undecided on the issue as Petamina pressured it to hand over the block.

In its latest proposal, TEPI offered to continue operating the block for several years of transition period until the government makes decision. The transition period proposal has however been rejected by the government.

Editing by Johannes Simbolon