Pertamina, Total, Inpex sign HoA for Mahakam block
Wednesday, December 16 2015 - 04:20 PM WIB
Pertamina has been assigned by the government to take over the ownership of the block after the expiry of TEPI and Inpex?s contract on the block expires at the end of 2017.
?The HoA is the first step for Pertamina in its preparation to take over the operatorship (of the block). It (the HoA) contains basic principles which need to be specified in a definitive agreement,? Minister of Energy and Mineral Resources Sudirman Said, who was on hand during the event, said in a statement.
The HoA contains Transfer Agreement which aims to ensure a smooth transition from the current owner/operator to the new one in a way that the rights and obligations of both the new and old operator/owners are well respected.
?The Transfer Agreement, among others, set rules regarding the transfer process of TEPI?s workers in Mahakam to Pertamina, preparations for budget and work plan for the period of beyond Dec. 31, 2017, as well as related permits,? he said
Besides, the HoA contains Commercial Agreement, in which Pertamina and TEPI-Inpex agrees to finalize commercial aspects, such as the composition of shares in the partnership that they will establish, the format and procedures of cooperation among them in in the new production sharing contract.
The government has decided to transfer the whole ownership of the block to Pertamina after the expiry of the current contract, but it also asked the firm to offer 30 percent of the stake to both TEPI and Inpex. Furthermore, it asked Pertamina to hand over 10 percent of the stake to the government of East Kalimantan in line with the existing regulation.
Sudirman said the transfer of 10 percent stake to the regional government will be finalized after the new PSC for the block has been signed.
Sudirman said the new PSC for the block will be signed by the end of this year.
Editing by Johannes Simbolon