Indonesia to set new crude price formula Oct: Purnomo

Minister of Energy and Mieneral Resources Purnomo Yusgiantoro said on Thursday that Indonesia might change formula of Indonesian crude, better known as Indonesian Crude Price (ICP) starting next month.

Purnomo said the decision to change the formula was to better reflect international market price such as New York, London and other Asian market.

Purnomo said under the new ICP government will dilute the weighting of Asian Petroleum Price Index (APPI) in the formula to 5 percent from 20 percent, and increase the weighting for Platts, an oil-pricing service, and RIM Intelligence Co to 47.5 percent from 40 percent.

Ministry of Energy and Mineral Resources reviews the formula every six months.

Purnomo said that the change in ICP formula would not affect Indonesian LNG export prices. LNG export prices from Arun and Bontang is tied to ICP, but there?s another component in LNG pricing called alpha that can be adjusted to make LNG prices unaffected by ICP change, Purnomo said.

Indonesia, which faces decreasing oil production, exports 200,000-300,000 barrels of crude per month. (godang)