The Aceh Oil and Gas Management Agency (BPMA) is awaiting the proposal from Pertamina EP regarding the return of certain oil block assets to the Aceh Provincial Administration.
Several assets of the state-owned company to be returned to the local administration include the Rantau, Perlak, Kuala Simpang Barat, and Kuala Simpang Timur fields. The management of these fields will subsequently be handled by PHE Aceh Darussalam, an affiliate of Pertamina EP.
“The mechanism remains a carve-out, and it will be carried out during the remaining period of the production sharing contract (PSC) until 2035 by PHE Aceh Darussalam,” BPMA Head, Teuku Mohamad Faisal, said on Monday, April 22, 2024.
In parallel, Faisal said that the agency is also waiting for the approval of terms and conditions (T&C) from the Aceh Provincial Administration for the submission of returning these assets to Minister of Energy and Mineral Resources Arifin Tasrif for determination.
The terms of returning the assets are a follow-up to a letter signed by Arifin regarding the Transfer of Partial Management of Pertamina EP’s Work Areas in Aceh to BPMA. The letter, signed by Arifin on May 26, 2023, grants approval to transfer the management of certain areas from Pertamina EP’s Work Areas located in Aceh through a carve-out mechanism.
Consequently, Faisal said that Pertamina EP can focus more on developing their other assets spanning from Aceh to Papua at present.
“Pertamina EP can work more efficiently because it is specifically handled by its affiliate, PHE Aceh Darussalam,” he said.
As previously reported, the government requested that potential oil wells that Pertamina could not optimize be handed over to private, domestic, and foreign contractor cooperation (KKKS).
Additionally, the government also highlighted concessions currently held by state-owned oil companies that are too extensive, while oil lifting continues to experience significant declines each year. This decision is the result of President Joko Widodo’s directives in a limited cabinet meeting last September regarding the upstream oil and gas industry.
“The President instructed that the opportunities for wells that Pertamina cannot optimize should be opened to the public for immediate exploration to increase production,” Investment Minister Bahlil Lahadalia said while addressing the 4th International Convention on the Indonesian Upstream Oil and Gas Industry 2023 (ICIUOG) in Nusa Dua, on September 20, 2023.
