Central Government Seeks Process of Transfer of Oil and Gas Block in East Kalimantan Runs Smoothly

INDUSTRY.co.id - Samboja- The government continues its utmost effort so that the process of managing oil and gas blocks in East Kalimantan can be done well.

"There are four other blocks in East Kalimantan (other than Mahakam blocks), which should work well," said ESDM Minister Ignatius Jonan in Samboja, East Kalimantan (1/11/2017).

He added that the oil and gas blocks that will expire in the next two years are East Kalimantan Block, Sanga-Sanga Block, Attaka Block, and Central Block. In fact, continued Jonan, instead of managing the Mahakam Block to be gamble national companies in running upstream oil and gas business.

"Mahakam block is a big gamble Pertamina, if the transfer of this makes the production down dramatically, then Pertamina's reputation and reputation of our upstream oil and gas will be less positive," said Jonan.

As is known, the government has appointed Pertamina to manage the Mahakam Block, effective as of January 1, 2018. This block was previously managed by Total E & P Indonesia in collaboration with Inpex. The contract period of the Mahakam block itself will be exhausted on 31 December 2017.

Meanwhile, Assistant II of East Kalimantan Province, Ichwansyah hoped that the transfer of oil and gas blocks in East Kalimantan could contribute to the regional economy through revenue sharing.

"The end of the oil and gas block contract (in East Kalimantan) has a risk of declining oil and gas production, which has an impact on regional revenue in the form of profit sharing funds," said Ichwansyah.

The government has actually regulated the ownership of oil and gas blocks for local government through Participating Interest (PI) of 10 percent.

"One of the main orders from President Jokowi is that PIs for the 10 per cent area must be implemented to fall into the hands of their respective local governments, not to fall into private hands," said Jonan.