East Kalimantan Local Gov't gets 10% PI in Mahakam

KATADATA - The government has fulfilled its commitment to grant participating interest (PI) of Mahakam Block to East Kalimantan local government. The Energy and Mineral Resources (EMR) Ministry has officially given the 10% PI to the local government toady.

The EMR Upstream Oil and Gas Business Development Director Djoko Siswanto said that the PI is given today, Tuesday (6/10). “Yes there’ll be the giving of the Mahakam’s 10% PI to the East Kalimantan local government in Balikpapan,” Djoko said to Katadata, Tuesday (6/10).

Djoko is reluctant to explain whether the even would just consist of the giving of PI to the local government, or would it also include Pertamina, Total E&P Indonesie, and Inpex Corporation. He also reluctant to explain how would the proportion be between the East Kalimantan local government and the Kutai Kartanegara (Kukar) regency.

Last mid of July the government had decided the proportion of Mahakam’s stake. Indonesia, which is represented by Pertamina and regional-owned enterprise of East Kalimantan, will get 70%. The remaining will be given to the old contractors, which is Total and Inpex. And the 10% share of the local government must be divided with Kukar regency. 

The source of the funding for the local government to take the PI is still not clear yet. The EMR Oil and Gas General Director I.G.N. Wiratmaja Puja is still hoping so that Pertamina can help to cover for the fund that the local government need first to get the PI in Mahakam Block. “It’s still being discussed, hopefully it can.”

East Kalimantan Governor Awang Faroek also hopes for the same thing. When Katadata meet him in Dhanapala Building, Jakarta, Friday (2/10), he hoped so that Pertamina or central government would want to cover the funding in Mahakam block first. Right now, Awang is still waiting to speak with Pertamina regarding this matter. He also asks so that the government can facilitate the meeting with Pertamina.

Pertamina is asked to cover for the fund first, because the local government cannot use the state budget. Furthermore, the regional budget is very limited. The government also prohibits the local government to invite the private party to help with the funding. If Pertamina can cover for the funding first, then the local government can pay Pertamina in installment from the oil and gas production of the block.

However previously, the regional firm of East Kalimantan, PT Migas Mandiri Pratama, had declared first that the funding to get the participating interest of Mahakam Block is ready. The director of the company, Hazairin Adha, said that to participate in the operation of Mahakam on January 1^st 2018, his side has already prepared funding in the amount of IDR 2 trillion to IDR 3 trillion. He also said that the funding is not from State Budget or Pertamina, but from bank loans, either within the country or abroad.