National firms priority in expired oil blocks take over

By Godang Sitompul

The government will give national companies the first priority to take over the operation of oil and gas concessions when their production sharing contracts are expired, upstream authority BPMIGAS said.

"We'll give the national companies a priority to operate oil and gas blocks, when their existing contracts are expired,? Gde Pradnyana, the head of the public relations, securities and formalities division of BPMIGAS, said in Jakarta on Sunday.

According to BPMIGAS, 29 contracts of the total 72 oil and gas working areas that have been in production, will be expired before the year 2021.

The concessions are, among others, Siak Block in Riau which is operated by Chevron Pacific Indonesia until 2013, Offshore Mahakam Block in East Kalimantan operated by Total E&P Indonesia until 2017, Sanga-sanga Block in East Kalimantan operated by VICO until 2018, Bula Block in Maluku operated by Kalrez until 2019, South Jambi B Block which is operated by ConocoPhillips until 2020, and Muriah Block in Central Java which is operated by Petronas until 2021.

"Some of the operators have applied for a contract extension,? he said.

Gde said that if the government decided not to extend the contracts, their working areas would be given to national and regional companies. But their selection will be based on their financial and technological capability.

Oil and gas blocks located in deep water areas which require a lot of money and high technology can be given to a large national firm such as Pertamina, he added.

Editing by Benget Besalicto Tnb.