Government Asked to Immediately Decide Sukowati Field Status

INDUSTRY.co.id - Jakarta - The government through the Ministry of Energy and Mineral Resources is asked to immediately decide the status of the Sukowati oil field run by Joint Operation Body Pertamina Hulu Energi-PetroChina East Java (JOB PPEJ) after the contract management contract of Tuban Block, February 28, 2018.

"The release of Sukowati should immediately be decided by the government in order to have legal certainty related to oil and gas industry," said oil and gas law observer from Airlangga University Imam Prihadono in a written statement in Jakarta on Sunday (18/2/2018)

Imam said the government's sluggishness is feared to cause controversy over certain interests behind the determination of Sukowati Field management.

Currently JOB PPEJ manages the Tuban Block in East Java, along with Sukowati unitization which 80 percent of its participation rights are owned by Pertamina EP and 20 percent by JOB PPEJ.

In the Tuban Block, PHE and Petrochina share a share of 50 percent participation rights.

Of the total production of PPEJ which reached 9,000-10,000 barrels per day, 80 percent came from Sukowati Field. But as the Tuban Block expires, the production sharing contract (PSC) scheme turns into a gross split. While for Field Sukowati still use cost recovery scheme.

According to Imam, separation or gross split is possible, but it needs to be mutually agreed with the partners. Otherwise, this could trigger a dispute in the future. "Another solution of the split, put into one but the permanent management by Pertamina,” he said.

The previous government appointed PPEJ to manage the Tuban Block, including Sukowati Field until the signing of the new PSC contract.

Imam said the current condition is no longer merely appointing Pertamina EP to manage the Sukowati Field, but there are other considerations that are not open to the public.

"It seems that there is a need for better transparency in this appointment process so as not to set a precedent that continues in the future," he said.

Komaidi Notonegoro, Executive Director of ReforMiner Institute, said that based on regulation Pertamina's position to obtain management in Sukowati Square and Tuban Block as a whole is very strong. Regulation of Minister of Energy and Mineral Resources Number 15 Year 2015 is quite clear and gives privilege to Pertamina.

"From the aspect of the right to match mechanism, Pertamina is also entitled to get priority because it holds the largest share," he said.

According to Komaidi, from the existing conditions there should be no doubt the government to hand over the management of the Tuban Block to Pertamina.

Extension is possible when circumstances force it. But the government needs to explain to the public why the move is taken as well as what the future plans for, he said.