Pertamina won't be given exlusive rights to operate Palmerah block: Official

Director General of Oil and Gas Iin Arifin Takhyan said that the state-owned oil and gas company PT Pertamina should concentrate first in developing its existing oil and gas working areas instead of seeking for facility to obtain new exploration blocks.

"Pertamina currently has around 150 working areas scattered throughout the country. That is the largest number of working areas compared to those operated by other (oil) contractors," he said on Tuesday in Semarang.

Iin was responding to demands from Pertamina that the government should provide the company with exclusive rights to operate the Palmerah oil block, one of eight oil blocks being offered to investors early last month.

The Palmerah oil block which is located in Jambi is one of the most promising among the eight oil blocks being offered to investors. As the Palmerah block attracts more than one investors, the government plans to auction the oil block to ensure transparency. It means that Pertamina should compete with other oil companies to win the oil block.

But Pertamina wanted to get the block without having to compete in a tender process.

The new oil and gas law issued in 2001 removed all the exclusive rights awarded to Pertamina to operate and develop oil and gas blocks in the country. Before the issuance of the law, oil and gas companies should operate the existing oil and concession areas under production sharing contracts with Pertamina. (Alex)