Pertamina to submit Mahakam's proposal within three months

By Febry Silaban

State owned oil and gas firm PT Pertamina (Persero) will submit a proposal on the future management of the Mahakam block in East Kalimantan in three months at the latest, according to a top official of Pertamina.

"We are now making the proposal. We will submit it in three months at the latest," acting President Director of Pertamina Muhammad Hussen told Petromindo.com.

The Ministry of Energy and Mineral Resources has signalled that it will hand over the block to PT Pertamina after the existing contract on the block now held by French firm Total E&P Indonesie and Japanese firm INPEX ends on Dec. 31, 2007. The firm is required to make a proposal on its detailed plan for the development of the block before the government makes a decision on the matter.

Widhyawan Prawiraatmadja, Head of the Performance Control Unit at the ministry, and Naryanto Wagimin, acting Director General of Oil and Gas said in the proposal, it should be clear that among others the block?s production would not drop once it has been handed over to Pertamina.

Widyawan and Naryanto said in the proposal, it should be also clear whether Pertamina will team up with Total to develop the block. They urged however Pertamina to cooperate with Total in developing the block.

Meanwhile, Kontan daily quoted Hussen as saying Thursday that Pertamina was ready to follow the recommendation of the government to have a partner such as Total in managing the Mahakam block, but stressed that his company will have a majority stake. In return for Total?s participation in Mahakam, Pertamina was hopeful that it would be allowed to have stakes in Total?s other assets overseas, Hussen said.

Editing by Johannes Simbolon