Pertamina wants exclusive rights in upstream operation

The state-owned oil and gas company Pertamina has asked the government to maintain its exclusive rights in the upstream oil operation despite the introduction of the new oil and law, which will remove the regulatory role and monopoly it have enjoyed for decades.

Pertamina?s president Baihaki Hakim said that Pertamina should be given at least the exclusive rights to take over the operation of oil and gas fields whose contracts have expired.

If such exclusive rights are not given, the company would not be able to survive the free competition resulting from the introduction of the new law. ?Malaysia gives a special protection to its oil and gas company Petronas,? he added.

The new oil and gas law, which will be soon introduced, will strip its regulatory role and the exclusive rights in administrating and operating oil and gas activities both in the upstream and downstream operations.

Pertamina, under the new law, will operate as a common company and it should, therefore, join the tender if it wants to obtain oil and gas concessions.

According to Baihaki, such treatment is normal in other countries. Sudan, for example, gives a special treatment to Pertamina if it wants to operate oil fields in the country.

Baihaki said that Pertamina is committed not to join the tender for acquiring new fields in order to avoid a conflict of interest as all the information about the country?s oil and gas sector is now under the control of Pertamina.

?We, therefore, want an option to have an equity of 20 to 30 percent of the tendered projects. The company also provides the funds for its equity participation,? he was quoted as saying by Koran Tempo.

Pertamina should be also given to handle the marketing of the country?s liquefied natural gas, he added. (*)