Pertamina"s hasty Step to take over Oil and Gas Assets in Aceh



2/10/2015, 05.34 WIB

The purchase of B and NSO Blocks has the potential to arise a law violation. ExxonMobil still have debts in the form of excess recovery cost worth IDR 1.1 trillion.

Donang Wahyu|KATADATA
Pertamina KATADATA|Donang Wahyu

KATADATA - Starting Thursday (1/10), three oil and gas assets in Aceh have officially been taken over by PT Pertamina (Persero) from ExxonMobil Oil Indonesia. Exxon’s whole holdings in the three assets, which are the B Block, North Sumatera Offshore (NSO) Block, and PT Arun Natural Gas Liquefaction (NGL), has been shifted to Pertamina. 

“Pertamina and ExxonMobil had finished the process of taking control of the stake in the cooperation contract of NSO and B Block, including also the sell of Arun NGL’s holdings sale,” ExxonMobil Indonesia’s VP for Public and Government Affairs, Erwin MaryotoII, to Katadata, Thursday (1/10). Now, Pertamina through its subsidiary, Pertamina Hulu Energi, officially become the operators of the two oil and gas blocks, and control the whole Arun NGL’s stake.

After “bailing out” from Aceh, ExxonMobil now only has one asset in the upstream oil and gas Indonesia, which is Cepu Block in Central – East Java. In the block, the peak of production in the amount of 205 thousand barrels of oil per day (bpd) in the field is targeted to be reached by the end of this year. 

On the other hand, Pertamina’s decision to take over the assets at this time of the year arises questions. Based on the data from the Energy and Mineral Resources (EMR) Ministry, the B Block oil reserve is still around 3,343 MTSB and gas reserve around 104 bscf, while for NSO Blocks, the oil reserve is around 272 MTSB and gas reserve is around 92 bscf. However, the ExxonMobil’s contracts as the operator of the two blocks would actually end in 2018, which is only three more years.

Katadata’s source in the EMR Mnistry also said that if Pertamina can be patient until 2018, then there is a chance to take over B and NSO blocks freely. For example in the Mahakam case, the contract would expire in 2017, but right now Pertamina has been assured to hold 70% of the block’s shares, with the remaining holdings to be owned by Total EP and Inpex as the old operators. This can happen because of the Government Regulation (PP) No. 35/2014 that says Pertamina is to have privilege in running oil and gas blocks that would soon expire. 

The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Deputy M.I. Zikrullah considered that if Pertamina waited until the contracts expire in 2018, then they would have get the privilege. But then he would not want to interfere between Pertamina’s and ExxonMobil’s business matter. He only wish to remind Pertamina and ExxonMobil to fulfill their obligations and to receive their rights according to the agreed portion.

And not just to spend out money to buy the oil and gas blocks that would soon expire, according to Katadata’s source, the business transaction made by Pertamina has the potential to arise a law violation, since ExxonMobil still owes excess recovery cost worth US$ 80 million or around IDR 1.1 trillion to claim the lawyers in the central office in the US. The debt has been there since before 2015. The State Audit Agency does not agree with the reimbursement and asked for it to be returned to the state. 

SKK Migas Head of Public Relation Elan Biantoro said that ExxonMobil and Pertamina of course would already have the rights and responsibilities agreement regarding the taking over of the blocks. And even though the taking over only starts on October 1, Pertamina need to cover all responsibilities that is there since the start of this year, starting from the debts until the payment of salaries. “The negotiation process between ExxonMobil and Pertamina had started since a year ago,” Elan added. 

A subject in the oil and gas industry sees Pertamina’s step as a hasty one in buying the assets in Aceh, but yet, makes sense. The state-owned oil and gas giant would surely be worried that their plan would fail if they have to wait for 2018 when the Aceh Oil and Gas Management Agency (BPMA) would have been established already. The same also goes with the Government Regulation (PP) No. 23 Year 2015 about the management of oil and gas and natural resources in Aceh. 

BPMA is autonomy agency of the government that runs and controls the upstream oil and gas sector in Aceh. Besides the onshore, BPMA only have authority in the oil and gas blocks that are within 0 to 12 mil to the sea. The agency is to be built through the PP No. 23 Year 2015 as the derivation of the Legislation No. 11 Year 2006 about the Aceh government. In the PP that is issued on May 5th 2015, the central government has been given a year to develop BPMA. And so, the special agency would have been established in May next year. 

If the BPMA is already established, then the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) no longer has the authority to control the oil and gas blocks in Aceh. And even more since in the PP no. 23, there is a sentence that says” the work areas that have been expired would be returned and be offered to the regional-owned firms first.

If the regional companies do not want to have he business, then it will be offered openly. This is the one cause that concerns Pertamina. “Since the regional-owned companies in Aceh are also interested in running the blocks (B and NSO Blocks),” Katadatas source said.

But according to Pertamina’s VP Corporate Communication Wianda Pusponegoro, Pertamina decided to take over and manage the two blocks earlier than 2018 because so that they can manage it with a maximum effort. They are not worried whether their contract would not be extended by BPMA after 2018. “We’ll work to the maximum level to have a maximum result,” Wianda added. 

Reporter: Arnold Sirait

Your Email Has Been Registered
sorry there was a problem signing you in
Please Fill Email Address
Fill Email Correctly
Please type the Captcha correctly