Minister of Energy and Mineral Resources: KKKS Must Offer Oil Production Results to Pertamina

By : Hariyanto And Aldo Bella Putra | Monday, September 10 2018 - 19:30 IWST

Wakil Menteri Energi Dan Sumber Daya Mineral, Arcandra Tahar

INDUSTRY.co.id - Jakarta - In order to optimize the use of petroleum for domestic needs and improve national energy security, the Government issued a regulation in the form of Regulation of the Minister of Energy and Mineral Resources Number 42 of 2018 concerning Priority of the Use of Petroleum for Meeting Domestic Needs.

The spirit of the issuance of the Ministerial Regulation which came into force on September 5, 2018 is to prioritize domestic oil production for domestic needs.

"The government has issued ESDM Minister Regulation No. 42 of 2018, which states that the Cooperation Contract Contractors (KKKS) are obliged to offer their production to Pertamina at a price that is in line with business or business to business," said Deputy Minister of Energy and Mineral Resources, Friday (7 / 9/2018).

The obligation to offer the results of the production of contractors and affiliates, continued Arcandra, is carried out no later than 3 (three) months before the commencement of the export recommendation period for all of the Contractor's Petroleum volume. This is stated in Article 3 of ESDM Regulation Number 42 of 2018.

Arcandra revealed that all KKKS had stated their willingness to sell their crude production to PT Pertamina (Persero).

"As far as I know, everyone is willing to sell domestically. I have collected all the big KKKS and they declare their willingness. Maybe there is a B to B, what is the price, please contact Pertamina directly," he added.

Article 5 states that PT Pertamina (Persero) can make direct appointments of Contractors to purchase Contractor's Petroleum. For this direct appointment, PT Pertamina (Persero) can enter into a long-term contract for 12 (twelve) months.

The regulation also states that after negotiations between the Contractors or its Affiliates with PT Pertamina (Persero) and / or the Business Entity Holders of Petroleum Processing Business, PT Pertamina (Persero) and / or Business Entity Holders of Petroleum Processing Business Permit must report the results of negotiations to the Directorate General of Oil and Gas.