Govt asks PSCs to sell their production shares domestically

By Febry Silaban

Ministry of Energy and Mineral Resources has asked production sharing contractors (PSC) to sell their crude and condensate production shares in the country, rather than export them, in order to meet the domestic needs.

Director General of Oil and Mineral Resources at the ministry, I Gusti Nyoman Wiratmaja said exports of crude oil and condensate during the year could reach 400,000 barrels per day.

"If half of the exports can be used domestically, then the government can save up to US$3.8 billion in foreign exchange reserves per year," said Wiratmaja.

To date, the government through state owned oil and gas firm PT Pertamina (Persero) has continued to import crude oil and oil products in large volume to meet the domestic needs, spending huge amount of the US dollar in the process, eroding the country's foreign exchange reserves, according to Wiratmaja.

"The study for the purpose is already done. There are potentially 200,000 barrels of crude and condensate that can be processed in the domestic refineries. This will automatically reduce Pertamina?s purchasing of US dollar," he said.

However, he added, the challenge is indeed great and upstream authority SKK Migas needs to coordinate with PSCs to realize this.

Meanwhile, Chairman of SKK Migas Amien Sunaryadi explained, the plan has been communicated to the PSCs and received a positive response.

Editing by Johannes Simbolon