Pertamina, Local Governments to Control 70% Stake in Indonesia's Biggest Gas Block

The Indonesian government has decided to allocate 70 percent stake in gas rich Mahakam block in East Kalimantan to Pertamina and local governments, reported Jakarta Post newspaper Friday.

According to Energy and Mineral Resources Minister Sudirman Total E&P Indonesie, the current operator, and Inpex would have a combined 30 percent stake in the country's biggest natural gas block.

"Pertamina's stake is greater as it will become the operator of the block. Local administrations will also have participating interests. Combined, they will have a 70 percent stake," Jakarta Post quoted the minister as saying.

Under a production-sharing contract set to expire in 2017, France's Total currently holds a 50 percent participating interest while Japan’s Inpex controls the other 50 percent.

The government has decided on a three-year transitional period before Pertamina entirely takes control of the block, which has been in operation since the 1970s, the newspaper said.