TEMPO.CO, Jakarta - Minister of Energy and Mineral Resources Sudirman Said has decided to hand over the management of the Mahakam block to PT Pertamina (Persero) from Total E&P Indonesie. The minister now wants Pertamina to show their commitment to become the block's operator by appointing investors, among others.

Sudirman said he still doest know how much stake Pertamina will have in Mahakam Block."Let [Pertamina and Total] negotiate it," he said.

Earlier, the minister said the state oil and gas company has earmarked US$25.2 billion to manage the Mahakam block for 20 years after Total's contract expires in 2017.

Pertamina's upstream director Syamsu Alam said they are ready to manage the Mahakam block during the transition period. He also guaranteed that the discussion will be completed in a short time.

Once they receive a letter of appointment as the official operator of Mahakam block, Syamsu said Pertamina will hold discussions with Total, such as on technology transfers and human resources.

East Kalimantan Governor Awang Faroek Ishak had said they are ready to participate in the block's management. According to Awang, the East Kalimantan provincial government has formed Perusda Mandiri, a consortium of oil and gas, with PT Yudhisthira Kaltim. They received financial support from Morgan Stanley and Standard Chartered Bank.

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