BP exempted from L/C requirement

The Ministry of Trade has approved a request from energy giant BP Plc to be exempted from the obligation to use L/C payment system in making export, Kontan reported on Tuesday.

The paper quoted Director General of International Trade at the ministry Partogi Pangaribuan as saying that BP is the first company to be given dispensation. The approval was issued last week.

He said that other oil and gas companies that may soon obtain similar dispensation were Chevron and PT Badak LNG.

The Ministry of Trade issued a new regulation requiring the export of the country?s key commodities including coal, mineral, crude palm oil and oil and gas to use the L/C payment system starting April of this year.

But the ministry then relaxed the L/C requirement policy, with acting Director General of Oil and Gas IGN Wiratmaja telling the press last month that the export of oil and gas would be exempted from the L/C requirement based on a case-by-case basis.

The Ministry of Trade then issued a new Regulation No 26/2015, which allows exporters, not only oil and gas, to seek for exemption from the L/C requirement after first obtaining recommendation from the related technical ministries such as the Ministry of Energy and Mineral Resources.

Some mining companies have also protested the L/C requirement as their export has been based on long-term contracts using a different payment system. (*)