Three options for expiring contracts: Priyono

By Bernard Loebs

Upstream authority BPMIGAS recommends the government to grant contract extension to existing contractors as long as they have been showing good performance, the block still has plentiful reserves and they are ready to be partnered with state owned oil and gas firm PT Pertamina and local administration-owned companies (BUMD),

The option is among the three proposed by BPMIGAS? Chairman R Priyono during a hearing on Tuesday with the House of Representatives? Commission VIII which oversees energy affairs.

The three options have been formulated based on studies by BPMIGAS, according to Priyono

The second option is that if the existing contractors have failed to perform but their blocks still have significant reserves, the government should not extend the contracts but instead give Pertamina the chance to operate the block in partnership with BUMD and the contractor.

As the third option, in case Pertamina rejects the offer to take the operatorship of the blocks with expiring contracts, the blocks should be put into tender, Priyono explained.

According to him, there are 72 working areas in the country now in exploitation stage, 29 of which will see their contracts expiring through 2021.

By Johannes Simbolon