Pertamina told to improve KSO terms and conditions

By Bernard Loebs

Energy and Mineral Resources Ministry is urging state owned oil and gas firm PT Pertamina to improve the terms and conditions in its KSO operation cooperation scheme to lure more partners and expedite exploration and production activities.

Evita Legowo, the Ministry?s Director General of Oil and Gas, told Petromindo.com the current KSO terms and conditions offered by Pertamina generate less-than-expected interests. ?Pertamina?s KSO has so far failed to yield encouraging results. Pertamina needs to improve the terms and conditions to attract more investors.? She said without elaborating further.

Up to now, Pertamina has KSO operation cooperation in more than two dozens fields in Sumatra, Java, Kalimantan and Papua.

Under the current scheme, partners in exploration fields are usually entitled for a share in production and cost recovery if the production is declared commercial. If no sufficient reserves are found after three years of commitment period, Pertamina has the rights to annul the deal.

For KSO cooperation in the production fields, the partners are entitled for a share in the produced crude oil, based on a previously determined Floor Production. If the produced crude oil equals or below the Floor Production, the partners are not entitled for a share as the crude amount becomes Non Shareable.

Editing by Dadan Wijaksana