Head Of SKK Migas Reveals Reasons For Termination Of Contract 49 Oil And Gas Working Areas

Head of SKK Migas Dwi Soetjipto. (Photo: Doc. ANTARA)

JAKARTA - Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto revealed that the government has terminated the contracts for 49 oil and gas exploration working areas (WK) in 2020-2023.

With the termination of the contract, all WKs return to state property. The reason for the termination of the contract is because the contractor did not develop the WK in accordance with the contract that was agreed upon when the contract was signed.

"And we see that efforts to find a solution so as not to be nominated no longer exist and both parties agree that this is no other way," said Dwi, quoted on Saturday, October 14.

After being nominated, the WK was returned to the state and then auctioned off so that other operators who had adequate technology and financial capacity could develop the potential in the WK.

"Most of them are stuck because of their financial ability," added Dwi.

To attract other operators in the auction, Dwi ensured that the Ministry of Energy and Mineral Resources (ESDM) would provide several reliefs such as reducing the amount of the signature bonus, besides that the WK split would also be improved so that it could attract interest.

He also ensured that the Ministry of Energy and Mineral Resources would pay close attention to the financial capabilities of operator companies participating in the auction so that contract termination incidents would not occur in the future.

"So a review is carried out, especially those who will participate in the auction to study potential like this and they will pay great attention to the long-term determination, we also examine their financial capacity as well as possible," concluded Dwi.