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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