New Rules of Oil and Gas Block Management for Increasing Production and Maintaining Investment

INDUSTRY.co.id - Jakarta - Regulation of the Minister of Energy and Mineral Resources (Permen ESDM) Number 23 of 2018 on Management of Working Areas (WK) of Oil and Gas that Will End the Contract of Work Samanya, has been enacted on 24 April 2018 ago.

Declared from the official website of the Ministry of Energy and Mineral Resources on Sunday (29/4/2018), the regulation was issued in order to maintain and increase oil and gas production and maintain the continuity of investment in WK Migas which will end its cooperation contract.

"The spirit of Energy and Mineral Resources is to maintain, even increase the oil and gas production from WK whose contract will expire and also to maintain the investment continuity in the oil and gas WK The final result, the greatest benefit for the country," said Agung Pribadi, Head of Communications Bureau, Public Information Service and Cooperation of Ministry of Energy and Mineral Resources.

Through the Ministerial Regulation, the Minister of Energy and Mineral Resources stipulates the management of oil and gas WK which ends its cooperation contract in the form of: Renewal by the existing contractor, Management by Pertamina, joint management between existing contractor and Pertamina, or auctioned.

The determination of oil and gas management is determined after evaluation of the management application and the requirements proposed by the existing contractor and / or Pertamina.

In conducting such evaluation, the ESDM Minister shall establish a Team whose members come from the Ministry of ESDM and the Agency and other relevant agencies as required.

Thus the existing contractor who, during the contract period has invested and produces oil and gas, has a fair chance to get a contract extension, but certainly with more favorable proposals for the State. In addition, Pertamina is also still able to apply for the management of oil and gas blocks that will expire.

"The existing contractor, who has invested and operated the oil and gas block, has the opportunity to renew the contract, and Pertamina also can still apply for the management of the oil and gas block that will end." For the important Government is the one who gives more benefit as much as possible for country, "added Agung.

As it is known that one of the conditions evaluated in the oil and gas block management application that will expire its contract is a signature bonus. It is also regulated in Ministerial Decree (Kepmen) ESDM Number 1794 K / 10 / MEM / 2018 on Guidelines for Stipulation of Signature Bonus Amounts in Evaluation and Assessment of Work Areas to be Managed Furthermore.

In the Ministerial Decree the signature bonus amount is set in the form of a formula as a guide in the process of evaluation and assessment of WK Migas which will end its contract. The signature bonus amount is at least US $ 1 million, and the maximum amount of US $ 250 million.

"This is a breakthrough, in order to achieve maximum benefits for the State," said Agung.