Pertamina demands exclusive rights to operate Palmerah oil block

State-owned oil and gas company Pertamina has demanded the government to provide it with exclusive rights to operate the Palmerah oil block, one of eight oil blocks offered to investors early last month, Kompas reported on Saturday.

"As a state owned company, Pertamina deserves to get the rights to operate the Palmerah oil block without a tender process," he said.

The Palmerah oil block which is located in Jambi is one of the most promising among the eight oil blocks being offered to investors. As the Palmerah block attracts more than one investors, the government plans to auction the oil block to ensure transparency. It means that Pertamina should compete with other oil companies to win the oil block.

According to Pertamina's boss, giving exclusive rights to state owned company is a common practice in the world. "It means that a state owned company does not need to go through a tender process if it is interested in developing certain oil and gas concession areas," he said.

The new oil and gas law issued in 2001 removed all the exclusive rights awarded to Pertamina to operate and develop oil and gas blocks in the country. Before the issuance of the law, oil and gas companies should operate the existing oil and concession areas under production sharing contracts with Pertamina. (*)