TEMPO.CO, Jakarta - The government decided to hand over 100 percent of the right to manage or participating interest (PI) of eight oil and gas blocks termination this year to state-owned oil and gas company Pertamina.
Head of Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Amien Sunaryadi, said that the rights will be given to Pertamina and its existing partners.
"After a long discussion on Friday, April 13, 2018, from the government, the eight parties have decided that 100 percent of the interest will be handed over to Pertamina," Amien said in Jakarta on Monday, April 16, 2018.
Later, the existing partners in each oil and gas block who are interested in re-joining and re-managing the block can initiation a business-to-business (B-to-B) negotiation with Pertamina.
Amien explained that the decision to hand over the participating interest to Pertamina was made based on two considerations.
First, the government wants to help Pertamina's under pressure financial condition due to the significant increase in global oil price, while the price of subsidized fuel will not be raised until 2019.
Second, the government wants to accelerate the process of signing the contract and transfer the eight termination blocks because Pertamina's B-to-B negotiation with the existing PI holder took a long time.
Amien hoped that the decision can help to expedite the signing of new contracts for the termination blocks.