BPMIGAS sets new policy on LNG, gas and oil sales
Thursday, February 27 2003 - 10:53 AM WIB
In a prepared statement presented during the hearing with the House of Representatives?s Commission VIII for energy and mineral resources, environment and science and technology, on Thursday, BPMIGAS chairman Rachmat Sudibyo said that under the new policy, the agency could appoint state oil and gas company Pertamina as the single seller of Indonesian LNG for ?certain markets?.
Outside the ?certain markets?, BPMIGAS would apply the buyer-request principle, which means LNG producers can sell their products without the mediation of Pertamina if the scheme is in line with buyers? requests.
Rachmat did not identify the ?certain markets? but Pertamina has claimed that it has been appointed by BPMIGAS as the single seller for the Japanese market, which is the largest purchaser of Indonesian LNG.
Pertamina acted as the single seller of Indonesian LNG for decades until its monopoly on the country?s oil and gas industry was revoked under the 2001 Oil and Gas Law, which turned it into a common company like other production sharing contractors.
After losing its monopoly, the state company sought to persuade the government to allow it to keep its marketing role, citing its long experience.
However, many LNG producers do not feel happy with Pertamina still keeping the marketing role, citing a possible conflict of interest. They fear that the state company will prioritize its LNG project over other LNG projects, citing that Pertamina has planned to build an LNG plant in Donggi, Sulawesi, where it has found a huge natural gas reserves.
With regards the domestic gas, Rachmat said, BPMIGAS would allow any gas producers to directly negotiate with potential buyers, if the deal involves only one producer.
However, Rachmat said, BPMIGAS would appoint Pertamina as the single seller in case there are several gas producers seeking to sell their products to similar buyers.
In the past, when Pertamina still held the monopoly over the country?s oil and gas industry, all contractors sold their gas through Pertamina, which received a fee as a mediator.
Regarding the sales of the government?s oil shares, Rachmat said, BPMIGAS could appoint Pertamina or private companies as the seller of the oil shares after an open tendering process.
Under the standard production sharing contracts (PSC), the government is entitled to receive 85 percent of the oil produced by contractors, while the remaining 15 percent going to the contractors.
In the past, Pertamina handled the sale of the government?s oil shares. (Godang)