Pertamina concludes new oil and geothermal deals
Pertamina concludes new oil and geothermal deals
JAKARTA (JP): State-owned oil company Pertamina signed two
production-sharing contracts, five technical assistance
agreements and five deals on geothermal power with domestic and
foreign companies yesterday.
Pertamina signed a production-sharing contract with British
Gas Exploration and Production Ltd. and PT Sapta Petra Wisesa
Malingping for the offshore Malingping area, West Java, and
another one with Premier Oil Indonesia Ltd., Seafield Resources
Plc. and Clyde Expro Plc., for the onshore and offshore Halmahera
areas in North Maluku.
Pertamina and Bali Energy Ltd. will develop geothermal
resources in Bedugul, Bali, and will build two 55-megawatt power
stations under a joint-operation contract.
Under the 42-year contract, both companies will eventually
build, operate and own eight geothermal power stations, with a
combined total capacity of 400 megawatts.
Included in the deals signed yesterday were energy sales
contacts between Pertamina and Bali Energy Ltd., on one side, and
the State Electricity Company (PLN), on the other, as well as
between PT Latoka Trimas Bina Energi, which will build two 30-
megawatt geothermal power stations at Kamojang, West Java, and
PLN.
The technical assistance agreements between Pertamina and four
national companies and one foreign contractor are related to oil
exploration and development in East Kalimantan, West Java and
North Sumatra.
Minister of Mines and Energy I.B. Sudjana, who witnessed the
signing of the agreements, reiterated that the government
considers it unnecessary to grant additional incentives to oil
companies, saying the investment climate in the hydrocarbons
sector is still attractive to investors.
"Today, we sign two new production-sharing contracts in oil
and gas exploration. That shows that oil and gas exploration is
still attractive for foreign investors," Sudjana said.
Presumably, Sudjana made the remarks in response to the recent
request by U.S. and other oil contractors for additional
incentives to investment in oil and gas exploration and
development.
He said that the last incentive package, which was released in
1994, was adequate to encourage investment in eastern Indonesia.
"Therefore, for a while, we don't see the need to give more
incentives," Sudjana said.
In a related development, Director General of Oil and Gas
Suyitno Patmosukistno said that the tax consolidation of contract
areas as proposed by oil companies would most likely be turned
down by the Ministry of Finance because such a measure would
benefit mostly the contractors.
Suyitno said he is not sure that such tax consolidation would
greatly stimulate new investments in oil and natural gas
exploration and development.
"I'm even sure that the biggest crude oil producer in the
country will not increase its investment if we give such tax
consolidation," he said.
He said that the tax treatment of the exploration areas and
production areas should not be consolidated.
"We are not yet a rich country that can afford to bear the
risks in oil exploration," he added. (04/vin)
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