Local administrations demand 19% stake in Mahakam

BALIKPAPAN. East Kalimantan Governor Awang Faroek and Kutai Kartanegara Regent Rita Widyasari insisted on Friday that their administrations be jointly given a 19 percent participating interest in the Mahakam block, the country's biggest source of gas, once the contract on the block expires in 2017.

“This is our stance. Take it or leave it," said Awang in response to the central government's recent decision to award local governments only a 10 percent stake, while state oil and gas company Pertamina will have 60 percent and France's Total and Japan's Inpex will jointly control the remaining 30 percent.

The block, which is located in East Kalimantan province, is currently controlled equally by Total and Inpex.

“This is for the sake of development in the province. We previously demanded 30 percent. But we're being realistic and have lowered our demand. But 10 percent is just too small," said Awang.

Energy and Mineral Resources Minister Sudirman Said stated that the 10 percent allocation was given in good faith by the central government, which had no legal requirement to allocate participating interest in the block to the local administrations. (N.Adri)