Pertamina says tripartite exploration talks might collapse

State oil and gas company Pertamina said tri partite talks with Malaysian state oil firm Petronas and Vietnam?s Petrovietnam Investment and Development Company (PIDC) to jointly explore for oil and gas in Randu Gunting block onshore Central Java might collapse after PIDC considered the split offered ?too low and uneconomic?.

Pertamina E&P upstream director Tri Siwindono told reporters that the 85-15 split for oil and 70-30 for gas that is set by the government as uneconomical in PIDC calculation. ?PIDC is asking equal treatment like Pertamina, which gets 60-40 split, but the government only allowed standard split,? he said.

He did not say whether PIDC had firmly decided to walk out of the deal. He, however, did not rule out the possibility of Pertamina exploring the block with Petronas only.

The three parties had been planning the joint venture since 2003. Under the tripartite deal, the three state oil companies will jointly explore in Malaysia, Vietnam and Indonesia with host companies holding 40 percent and operatorship and the balance equally shared by the two guests companies.

Similar ventures had been established in Malaysia and Vietnam. (alex/godang)