Pertamina Obliged to Purchase Oil from National Contractors

Minister of Energy and Mineral Resources, Ignasius Jonan.

The Government ordered Pertamina, a state-owned oil and gas company, to purchase crude oil produced by the national oil and gas Cooperation Contract Contractors (KKKS). This policy is a direct order from President Joko “Jokowi” Widodo during a Limited Cabinet Meeting as part of a program to increase foreign exchange in energy and mineral resources sector.

“Pertamina must purchase oil produced by the KKKS at market prices. I don’t want what’s produced here to be exported out and at the same time Pertamina have to import them again,” Minister of Energy and Mineral Resources Ignasius Jonan told the press after the launching of “Energy and Mineral Resources Contact Center 136” in Jakarta, Wednesday (15/8).

Jonan ensures that Pertamina would buy in accordance with the prevailing world oil prices, whereas crude oil purchasing mechanism from the KKKS will be prepared by the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas). “Pertamina is certainly obliged to pay in accordance with market prices, and SKK Migas will draw up the purchasing mechanism” Jonan said.

The policy that obliges Pertamina to purchase national oil production, according to Jonan, will apply permanently.

Along with this policy, Pertamina is expected not only to reduce crude oil imports, but also reduce the cost of transporting crude oil.

“The President’s order is to get oil from local contractors in order to save transportation costs,” Jonan concluded. (Humas Kementerian ESDM/ES) (GWH/MMB/Naster)