INDONESIAN MINING Govt To Terminate Contracts On 41 Work Areas

JAKARTA February 10 2015-The government immediately terminate contracts on 41 oil and gas exploration work areas as the oil and gas cooperation contracts contractors (KKKS) do not perform drilling activities in accordance to the commitment.

Director of Upstream Oil and Gas Business for the Ministry of Energy and Mineral Resources Naryanto Wagimin said the contractors didn’t performed exploration commitments within the deadline of three years and six years.

"41 blocks are terminated because they didn’t perform " he said Monday (2/9/2015).

Based on Government Decree No.35/2004 on Upstream Oil and Gas Business within three years of exploration the contractor shall conduct work program with the estimated amount stipulated in the production sharing contract.

Contractors who do not find oil and gas reserves in the exploration for six years are required to return the entire working area.

Naryanto added from 41 working areas half of which had been recommended by the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) to be terminated and the rest were still waiting for verification. Based on the recommendation he added the Ministry would revoke the rights of the operation held by PSC contractors.

"This year will be revoked but not all ."

Head of Public Relations for SKK Migas Rudianto Rimbono explained from 11 out of 41 work areas have not completed the exploration but have been officially recommended to be terminated to the Ministry of Energy and Mineral Resources and just waiting for the government's decision.

In the 2014 achievement outlook and 2015 work plan owned by SKK Migas as of July 1 2014 there were 20 exploration work areas terminated. The process that started in 2014 were Billiton South CPP South Barito and Budong-budong Blocks. Read more…