REPUBLIKA.CO.ID, JAKARTA -- Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan said that the offer of PT Pertamina (Persero) in Rokan Block, Riau province, is higher than that of Chevron, which has been managing the oil and gas block since 1971. He confirmed the statement of the Minister of Energy and Mineral Resources Ignasius Jonan as being related to the transfer of Rokan Block management to Pertamina starting from 2021.

"The offer of Chevron is small when compared to that of Pertamina. If it is a business relation, let them negotiate," Pandjaitan stated at the afternoon tea event with reporters here on Wednesday.

According to him, if Pertamina's bid is better than Chevron, of course, there is no reason to not give the oil and gas block to the state-owned company.

Moreover, the Rokan Block still holds large potential for oil and gas reserves for the national economy in the future.

"Rokan has 1.2 billion barrels of oil. It could be more if added with the existing technology for the next 25 years, and that is a huge asset," he noted.

Earlier, Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar revealed that the government had decided to choose PT Pertamina (Persero) as the manager of the Rokan Block in Riau starting from 2021.

There are four basic considerations taken after evaluating proposals submitted by the state-owned enterprises, namely signature bonuses, definite work commitments, state revenue pairs, and the discretion of the Energy and Mineral Resources (EMR) Minister.

First, Pertamina, in its proposal, has submitted a signature bonus of US$784 million, or about Rp11.3 trillion. This signature bonus will go to the state coffers.

Secondly, the amount of the exact working commitment value for the investment provided by Pertamina for the initial 5 years is worth $500 million, or about Rp7.2 trillion.

Third, the potential increase in state revenues over 20 years of the country, after earning a potential revenue of $57 billion, is about Rp825 trillion.

"God willing, this revenue potential can be an income for Indonesia," Tahar noted.

The fourth is the discretion of the Minister of EMR. This discretionary decision is based on a change in fiscal system from Cost Recovery to Gross Split.

"Because of this Gross Split, Pertamina has requested a discretion of eight percent, and the government has agreed to the proposal," Tahar revealed.

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