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ESDM Accelerates Management Transition of Rokan Block
PT Chevron Pacific Indonesia's oil facilities in Minas area are included in the Rokan Block in Riau, Wednesday (1/8). The ESDM Ministry decided to hand over the Rokan Block management after Chevron's contract expired in 2021, ending the company's partnership with the Government of Indonesia that has been going on for more than 90 years. ANTARA FOTO/FB Anggoro
Thursday, 09 August, 2018 | 12:30 WIB
ESDM Accelerates Management Transition of Rokan Block

TEMPO.CO, Jakarta - The Ministry of Energy and Mineral Resources or ESDM targets the management of the Rokan Block by the new operator, PT Pertamina (Persero), to be able to increase national oil production. Director General of Oil and Gas Ministry of Energy, Djoko Siswanto, said that Pertamina could participate in drilling activities in the Rokan Block starting next year.

The participation can be started when the company discusses work plan and budget (WP&B) with Chevron in 2019. “Pertamina will join (discuss) the WP&B first. Later, in 2019, Pertamina can participate in drilling,” Djoko said on Wednesday, August 8.

The decision is considered fast when compared to the transition period of the Mahakam Block from Total E&P Indonesia to Pertamina. The company can only participate in funding the drilling of the gas field in 2017, or a year before the contract begins.

But the transition process was not easy. The reason is that the company must negotiate to agree on a transitional agreement with Chevron. Later, the negotiation result will be the provision for the United States oil and gas company to amend the contract. In addition, Pertamina also has to pay fees for drilling agreed on in the largest oil and gas block in Indonesia.

The decision to hand over the Rokan Block was issued after Pertamina and Chevron competed in the proposed management proposal since last month. According to Arcandra Tahar, Deputy Minister of Energy and Mineral Resources, Pertamina is superior in terms of the amount of the signature bonus of US$784 million and a definite work commitment of US$500 million.

Currently, said Arcandra, the government has agreed to the terms and conditions for the block operation with Pertamina. The profit sharing, Arcandra said, is divided grossly through the gross split scheme. For the Duri Pertamina field, it has the right to get 65 percent of the oil quota and 70 percent of gas. Whereas in the field other than Duri, the corporation obtained 61 percent of oil and 66 percent of gas.

He said the government gave a bigger share in the Duri field because the oil was classified as heavy crude which contained a lot of metal and sulfur so the economy was lower. “Duri field is different from other fields because of the heavy oil. That’s why the split is different,” said Arcandra.

Pertamina Corporate Secretary Syahrial Mukhtar said that he would discuss the transition process with Chevron soon. “We will definitely discuss this step with Chevron,” he said.

To maintain production, Pertamina will seek new resources at 7,000 exploration points in the Rokan Block. The company will also continue the oil extraction project that was started by Chevron. The funding needs are estimated to reach US$70 billion or Rp1,015 trillion.

Chevron is reluctant to answer regarding the ESDM’s plan to allow Pertamina to invest early in the Rokan Block. Even so, the company said it would do everything possible to maintain the continuity of production. “We are committed to implementing the work programs to meet the production targets,” said Chevron Indonesia Corporate Communications Manager Danya Dewanti.




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