REPUBLIKA.CO.ID, JAKARTA -- The Energy and Mineral Resources (ESDM) Ministry has decided to hand over the operation of the Rokan Oil and Gas Block to state-owned oil and gas company PT Pertamina, Deputy Minister of ESDM Arcandra Tahar said on Tuesday. The decision was taken merely on business and economic interest after evaluating Pertamina's proposal.

Pertamina will operate the Rokan Block in Riau, after its contract held by PT Chevron Pacific Indonesia expires in 2021. Pertamina has proposed a signature bonus of US$784 million or around Rp11.3 trillion for the government and a commitment value of US$500 million.

The value of the proposal also indicates the financial health of Pertamina.

The selection of Pertamina as the new operator would result in an increase in the firm's contribution to the country's oil and gas production.

Its contribution to the country's oil and gas production will increase from around 23 percent to 36 percent in 2018 and to 39 percent in 2019 when Pertamina takes over the operation of oil and gas blocks, the contracts of which are still held by foreign contractors.

Arcandra Tahar said the added value from the decision puts Pertamina in the ranks of world top oil companies that could control 60 percent of national oil and gas production in 2021.

The Rokan Block has a strategic value. The block accounts for 26 percent of the country's total oil and gas production. The block with a concession of 6,220 kilometers has 96 fields, three of which produce high quality oil Duri, Minas and Bekasap.

From the start of operation in 1971 until 31 December 2017, the Rokan Block produced 11.5 billion barrels of oil.

Through the decision, the government gives financial support for Pertamina, which is in charge of public service of guaranteeing energy supply in the country such as oil fuel (BBM) in the same price all over the archipelago.

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