Drilling companies demand adjustment in drilling tariffs

The association of Indonesian drilling companies (APMI) has asked oil and gas production sharing contractors (PSCs) to adjust the drilling tariff in a bid to help them cope with a surge in the operational cost resulting from the increase in the fuel prices, Bisnis Indonesia reported on Tuesday.

The chairman of the association, Bambang Priyohadi, said in Jakarta on Monday that the higher fuel prices had caused an increase in their operational cost by between 20 percent to 25 percent.

The government raised the price of the diesel oil to about Rp 5,000 per litter from about Rp 2,200 recently.

According to Bambang, the oil and gas companies which hired the association's members have refused to pay the compensation for the surge in the fuel price on fears that the government would not pay for the additional cost.

"Generally the government will only cover the operational cost based on the contract, while our contract for July has not included the impact of the fuel price increase," he added.

He hoped the government and the oil and gas companies would understand the situation and pay the additional cost the drilling companies had to bear due to the increase in the fuel prices.

At present the association's members operate 86 offshore rigs at the concession areas of major oil and gas companies including Caltex Pacific Indonesia. (*)