BANDUNG-West Java Provincial Government, together with DKI Jakarta Provincial Government, signed a Joint Agreement on Participaing Interesest Taking and Participation Division, or PI 10% Offshore North West Java (ONWJ) Working Area.
The agreement was signed directly by West Java Governor Ahmad Heryawan (Aher), and Jakarta Governor Djarot Saiful Hidayat, in West Hall Gedung Sate Bandung, (10/07/2017).
West Java Governor Ahmad Heryawan said the demands of the region to be involved in this oil and gas project have long been proposed. The cooperation of two provinces also refers to the letter of the Minister of Energy and Mineral Resources No. 5975/13 / MEM.M / 2015 dated August 19, 2015 about the participation of enterprises in the Management of Oil and Gas at Work area (WK) NorthWest Offshore Java (ONWJ) .
Meanwhile, the scope of the Agreement is the division of the amount of PI 10% on WK ONWJ with the provisions of the city government gets a share of 20.29%, while Jabar accounted for 62.13% and subdivided by four districts in which each portion, among others, West Java Provincial Government 79.91%, Indramayu 4.71%, Subang 2.93%, Karawang 8.24% and Bekasi 1.70%.
The objective of this Joint Agreement is to enhance the regional participation in upstream oil and gas business activities in accordance with legislation.
"We are involved in managing offshore with the central government, which is very positive because before this, we become an area in our region, but we are not directly involved," said Aher.
In this agreement, the two provinces agreed to take and divide the rights of PI 10% in WK ONWJ, where later management will be done further by regional owned enterprises(BUMD) PT. Migas Hulu West Java which has been appointed by the West Java Provincial Government and BUMD PT. Jakarta Propertindo which has been appointed by the Provincial Government of DKI Jakarta through an deal or agreement inter-BUMD.
Meanwhile, Jakarta Governor Djarot Saiful Hidayat revealed that the process of this agreement did take time. But because this agreement is a "bussines to bussines", it must be done follow-up efforts.
Djarot also said that the cooperation between the two provinces in oil and gas is a new cooperation between two provinces in a short time.
Djarot also said that the joint project is an attitude that shows that the two provinces, can lower their respective ego on the wealth of natural resources.
"Do not we agree there is no ego in a region rich in natural resources? If indeed ego is raised what about our relatives who have no natural resources?" He said.
As a result of the agreement, he hopes to add the locally-generated revenue(PAD) from Participating Interest 10% WK ONWJ for the two provinces and districts of West Java province concerned.
Head of SKK Migas Amien Sunaryadi, explained that based on Article 34 PP. 35 of 2004 concerning Upstream Oil and Gas Business Activities, Minister of Energy and Mineral Resources Regulation no. 15 of 2015 on the Management of Oil and Gas Working Areas to End Their Contract of Work, and Regulation of the Minister of Energy and Mineral Resources no. 37 of 2016 concerning the Terms of Participating Interest 10% (Ten Percent) Actions in the Oil and Gas Working Area, it is necessary to stipulate that local BUMD can become partner holders of at most 10% based on business practice in oil and gas blocks management.
The Offshore North West Java Offshore Production Sharing Contract has been signed on January 18, 2017 between the Government represented by SKK Migas and PT Pertamina Hulu Energi ONWJ (PHE ONWJ) with a Gross Split Production Sharing Contract.
"At the signing, the ownership composition of Participating Interest 100% is owned by PT Pertamina Hulu Energi ONWJ," he explained.
The 2017 production target, PHE ONWJ targets around 36,000 barrels of oil per day and natural gas production of 144 MMSCFD. Oil and gas production is channeled entirely to national strategic needs such as fuel, power plants and raw materials for fertilizer production.
"Amid the condition of world oil prices that experienced a significant price reduction, did not cause PHE ONWJ to reduce the production rate," continued Amien.