Pertamina to manage oil contracts for time being
Pertamina to manage oil contracts for time being
JAKARTA (Reuters): Indonesia's Mines and Energy Minister Purnomo Yusgiantoro said on Thursday that state oil firm Pertamina would still manage negotiations and other aspects of production sharing contracts until a possible law change.
Industry sources had said earlier this week that the ministry would take over managing oil contracts from Pertamina from January, a move which has caused confusion among foreign oil contractors.
"Pertamina will keep handling the production sharing contract agreements and the terms of condition," Purnomo told Reuters.
The Mines and Energy Ministry is expected to take control of oil contracts once a new draft oil law is approved by parliament, although that bill has yet to be discussed.
The industry sources had said senior officials in the ministry had appeared to be trying to speed up that process.
Senior officials said on Thursday there appeared to have been some confusion over a letter issued last month, which had indicated all aspects of oil contracts were to be handed over to the Mines and Energy Ministry.
Director-General of Oil and Gas, Rachmat Sudibyo, told Reuters the government would continuing handling the initial tender process for new oil exploration, but interested foreign contractors would be referred straight to Pertamina for negotiations.
Under current legislation, called the Law on Pertamina, the oil firm has the authority to negotiate with oil contractors over working areas. The president then approves contracts.
The new draft oil and gas law, which has been submitted to parliament, will revoke Pertamina's monopoly over the oil sector, especially in downstream distribution.
No date has been set for debating the draft, which contains provisions to transfer contract responsibilities to a new body expected to be formed under the Mines and Energy Ministry. An earlier draft law was rejected by parliament.
Indonesia produces around 1.30 million barrels per day (bpd) of crude, below its OPEC's quota of 1.36 million bpd.