Indonesia: Pertamina reportedly wants to be first in line for expired oil and gas leases
Pertamina may get first pickings
Jakarta is mulling over draft regulations that will grant state-owned Pertamina the first right of refusal to operating rights for oil and gas blocks when their existing contracts expire, according to local media reports.
The final draft of the law is awaiting approval of Indonesian Energy Minister Darwin Saleh, said Evita Legowo, Pertamina's director general of oil and gas, according to a report in the Jakarta Globe newspaper.
The new regulation will allow Pertamina the opportunity to submit development proposal before the government grants any contract extensions for existing operators, Edi Hermantoro, the company's director of upstream oil and gas said.
Jakarta will take 85% of production revenue in any operating contract with Pertamina, up from the present 60% under the new regulation.
Pertamina has expressed an interest in 24 oil and gas blocks due for contract renewals in the next 10 years, the newspaper said.
The state-owned operator has reached an agreement with Kodeco Energy to raise its stake in the West Madura oil and gas block to 60%, up from the previous 50%, the report said.
“The preliminary agreement with Kodeco has been reached,” Bagus Setiardja, president director of Pertamina unit Pertamina Hulu Energi said. “But we’re still waiting for the new government regulation on the extension of contracts to be released.”
The original joint operating agreement for the block expires in May 2011. The block produces 14,000 barrels of oil and 92 million standard cubic feet of gas per day.