BPMIGAS submits list of gas contracts that need revision to DPR

The upstream oil and gas regulator BPMIGAS said it has submitted the list of gas purchase contracts that need to be revised to the House of Representatives (DPR). The revision is partly aimed at boosting state revenues.

Spokesperson of the BPMIGAS, Gde Pradnyana, said most of gas sales purchase contracts involve the state gas distributor PT Perusahaan Gas Negara Tbk (PGN) as buyer. ?We (BPMIGAS) have submitted to DPR the list of gas contracts that need to be revised,? Gde said.

He said the renegotiations of gas purchase price between gas producers and buyers being facilitated by BPMIGAS, are ongoing. Among gas purchase contracts that had been revised up recently were those between gas producers in East Java area, namely Santos (Madura Offshore) Pty Ltd, PC Madura Ltd and PT Petrogas Pantai Madura with PGN as buyer.

Gde said BPMIGAS aims to renegotiate and revise those gas sales purchase contracts whose prices are still below US$3 per MMBTU. ?We estimate that if gas purchase prices are revised up to at least US$5-6 per MMBTU, it (new price) could add state revenues by around $6 billion,? Gde said.

Gde said apart from raising state revenues, the revision of gas purchase would also encourage gas producers to increase gas exploration and exploitation activities. ?If gas purchase price is attractive, producers would invest more in drilling activities to find gas reserves,? said Gde. (godang)