Ministry allows Pertamina to offer 39% stake in Mahakam block

Petromindo

The Ministry of Energy and Mineral Resources has completed a decree allowing state-owned oil and gas firm PT Pertamina to offer up to 39 percent interest in Mahakam block to potential partners including Total and Inpex Corp, the current investors in the block, after their contract expires at the end of this year.

Deputy Minister of Energy and Mineral Resources Arcandra Tahar, however, said that the decision to offer the Mahakam block interest will be fully decided by Pertamina based on business to business negotiation with the would-be partners.

?The letter (decree) has been issued. It (Pertamina) is allowed (to offer) up to 39 percent interest,? he told reporters on Friday.

The government in 2015 decided to fully transfer the Mahakam block, in East Kalimantan Province, to Pertamina after the current contract of Total and Inpex expires at the end of this year. Then minister of energy and mineral resources Sudirman Said issued a decree allowing Pertamina to offer only up to 30 percent stake in the block to Total and Inpex under a new contract in which Pertamina is the operator.

But current Minister of Energy and Mineral Resources Ignasius Jonan wants Pertamina to offer up to 39 percent interest in the block to lure Total and Inpex to continue investment in the block. The continued role of Total, the current operator, and partner Inpex is seen crucial amid concerns over Pertamina?s capacity in maintaining production of Mahakam block.

Pertamina will also have to allocate a 10 percent participating interest in the block to local administrations in East Kalimantan.

Editing by Reiner Simanjuntak