Two provinces agree to jointly own PI in Sebuku PSC

Two provinces, namely South Kalimantan and West Sulawesi, agree to set up a regional state owned firm (BUMD), jointly owned by both provinces, to own a 10 percent Participating Interest (PI) in Subuku PSC located in Makassar Strait, a water area which separate both provinces.

Previously, both provinces were fighting for right to own the PI.

Both provincial administrations sign the Memorandum of Understanding on the formation of the BUMD on Wednesday at the vice presidential office in the presence of Vice President Jusuf Kalla, Minister of Energy and Mineral Resources Sudirman Said and Minister of Home Affairs Tjahjo Kumolo, Detik reported.

During the signing ceremony, Tjahjo, in his speech, gave the vice president credit for bringing a solution to the dispute between both provinces.

?The vice president was proved very able to solve this case. He is not only capable in politics. He could solve this problem in four days,? Tjahjo said, adding the way the dispute both provinces has been solved could be used as model to solve similar disputes in other areas of the country.

?There are at least five other cases which were similar to the dispute between the South Kalimantan and West Sulawesi provinces. We?ll seek to settle the cases this year,? Tjahjo said.

Sebuku is owned by Pearl Oil (operator), Total E&P Sebuku and INPEX South Makassar Ltd. The contract was signed on Sept. 22, 1999 and expires on Sept. 22, 2027. It remains unclear when the BUMD will enter the block. The block now produces 94 barrels of oil and 99 mmscfd of gas. The gas is al delivered to fertilizer firm PT Pupuk Kalimantan Timur in Bontang, East Kalimantan. (*)