Pertamina to submit proposals over eight oil, gas blocks in June
Wednesday, May 24 2017 - 09:26 AM WIB
State-owned oil and gas firm PT Pertamina hopes to be able to submit in June of this year proposals over eight oil and gas working areas, whose existing contracts are set to expire in 2017-2018, to the Ministry of Energy and Mineral Resources (MEMR).
Pertamina Upstream Director Syamsu Alam said on Wednesday that the company needs another month to complete economic assessment and the required project proposals over the eight oil and gas working areas.
?Hopefully, within the next one month we could submit the economics proposals to the MEMR for the eight expiring oil and gas working areas. We hope to submit the proposals in June,? he told reporters on the sidelines of a press conference unveiling its first quarter performance.
The government has decided to transfer the eight oil and gas working areas to Pertamina. The government will apply the recently introduced gross split mechanism in the upcoming new contracts for the eight working areas, replacing the current cost recovery-based contracts. Under the gross split scheme, the government would no longer cover the investment cost of oil and gas contractors.
Pertamina President Director Elia Massa Manik said that the company must make careful economic assessment before taking over the oil and gas working areas so as not to undermine its financial condition.
The eight oil and blocks to be transferred to Pertamina are Attaka, South East Sumatera, East Kalimantan, Tengah, Sanga-Sanga, North Sumatera Offshore, Ogan Komering, and Tuban.
Following the introduction of a new ministerial regulation, Pertamina as the new contractor for the eight oil and gas blocks will be required to bear the unrecovered investment cost of the previous contractors.
Editing by Reiner Simanjuntak