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.