Chevron, Conoco change gas-oil-barter contract into sales contract
Saturday, June 5 2010 - 03:05 AM WIB
The deals between the two companies were called Amended and Restated Gas Sales Exchanged Agreement (ARGSEA) and Amended and Restated Petroleum Transfer Exchanged Agreement (ARPTEA).
BPMIGAS' chairman R. Priyono said the deals were reached after three years of negotiation.
CPI previously recorded 50,000 bpd of the total 370,000 bpd of oil production from the firm's Rokan Block in Riau as "own use" rather than oil lifting because it delivered the amount to ConocoPhilips in return for gas, which is delivered from Conoco's gas fields in Corridor Block, South Sumatra. CPI uses the gas to extract more oil at the block.
?With the deals, since August 1, 2010, the 50,000 barrels of oil will be recorded as oil lifting. As a result of the deals, the government will get an additional revenue amounting to US$74 million per year depending on the price of Duri crude,? he said.
Priyono said aside from the deals with CPI, ConocoPhilips also signed three other gas agreements, which are supportive to the two main deals. The three include one agreement to supply gas to the industrial sector in the central part of Sumatra and another agreement to increase the production of liquefied petroleum gas (LPG) in South Sumatra.
?All of the contracts worth US$11.4 billion,? he said.
According to Priyono, the five contracts will add 514 trillion british thermal unit (TBTU) gas to the total gas sale of ConocoPhillips since 2012. ?The LPG production and gas supply to the industries will create a multiplier effect to the economy,? he said. (kanti)