BP Migas asks oil companies to hire local ships

The regulatory body for oil and gas exploration and production BP Migas has urged oil and gas companies operating in Indonesia to hire national flagged ships in their exploration and production activities, Suara Karya reported on Friday.

Yogi Prayogi, the head of the shipping department at BP Migas said that oil and gas companies should abide by the government's regulation No 5/2005 which required them to prioritize the use of local ships in their offshore operation.

"This is important so that oil and gas companies can also support the operations of national flagged ships," he said in his speech at the inauguration of the Indonesian Offshore Shipping Association (IOSA).

According to him, about 500 ships are currently involved in oil and gas exploration and production activities. About 80 percent of them are national flagged ships, and the other 20 percent are foreign ships. However, national flagged ships could only share 20 percent of the contract value which was estimated to reach US$600 million a year. The other 80 percent were controlled by foreign ships. (*)