BPMIGAS continues to encourage increasing local contents

Upstream authority BPMIGAS says that the use of local components in the procurement of goods and services for upstream oil and gas operations continued to increase in recent years as a result of the agency?s strong support to local contractors.

?The total value of the procurement of goods and services by production sharing contractors reached US$11.81 billion in 2011. The local components accounted for 60.63 percent of the total procurement value,? BPMIGAS chairman R. Priyono said in his address at the annual congress of the association of contractors in the upstream oil and gas industries in Jakarta on Thursday.

Priyono said that the use of local components had continued to show a significant increase since 2007. ?I hope the local components will continue to increase in the future,? he added.

As part of its strong commitment to encourage the involvement of the local companies in upstream oil and gas industries, BPMIGAS has required contractors to increase the local components in procurement of goods and services for upstream oil and gas operations to 55 percent.

BPMIGAS has also for several times revised the procedures in the procurement of goods and services in order to be able to involve more local companies. For example, a national company should become a leader of a consortium taking part on a tender for upstream oil and gas operations. A foreign company is only allowed to become a member in the consortium.

Priyono said that the involvement of local companies was not only limited to construction activities but also in banking and insurance services.

Editing by Roffie Kurniawan