Pertamina to loan local government in acquiring Mahakam block stake

By Febry Silaban

State-owned oil and gas firm PT Pertamina said it is ready to lend money to the East Kalimantan government in acquiring a 10 percent participating interest in the Mahakam block after the current contract expires at the end of 2017.

Pertamina President Director Dwi Soetjipto said the local government can then repay the company with its share of the output from the Mahakam block. ?This is what has been directed by the government,? he said on Friday.

Minister of Energy and Mineral Resources Ignasius Jonan urged last month oil and gas contractors to help local governments in realizing their participating interest in oil and gas blocks. He suggested that block operator with majority stake should loan the required money to the local government, which will repay the loan from its share of the output from the block.

The government has appointed Pertamina to take over the Mahakam block after the current production sharing contract of Total over the block expires by the end of next year.

Editing by Reiner Simanjuntak