Pertamina may get farm-in privilege

The government is considering giving state oil and gas company PT Pertamina a privilege to buy stake in any oil and gas exploration fields if contractors of the fields plan to farm out their stake

?This is in line with the Oil and Gas Law that requires the government to support national companies,? R. Priyono, upstream director at the Ministry of Energy and Mineral Resources told reporters on Wednesday. ?Furthermore, Pertamina pays dividend to the government,?

Priyono said the new policy might be included in the Upstream Governmental Regulation that the government expects to issue this year.

Under the new policy, Priyono said, Pertamina will be given the first right to buy up to 15 percent stake in exploration fields if the contractors plan to farm out their stakes in the fields before they sign contracts with the government or throughout the exploration period. Contractors will be allowed to farm out up to 49 percent stake within the first three years of operation.

?However, Pertamina must buy the stakes through business-to-business deal,? Priyono said.

He said the new rule will add to the one that requires contractors to offer 10 percent stake in their fields after making oil or gas discovery there and having their plan of development (POD) approved by the government. This obligation is stated in the Oil and Gas Law of 2001. (Godang)