Mandiri provides banking service to ConocoPhillips

State owned Bank Mandiri has agreed to provide banking services for three subsidiaries of American energy giant ConocoPhillips Ltd in Indonesia.

The agreement was signed by Mandiri's corporate banking director Fransisca Nelwan Mok and ConocoPhillips's vice president for financial affairs Steve Western on Wednesday in Jakarta

Under the agreement, Mandiri will provide funds management service that will support transactions by ConocoPhillips (Grissik) Ltd., ConocoPhillips (South Jambi) Ltd., and ConocoPhillips Indonesia Inc. Ltd, according to a statement from Mandiri.

The government through oil and gas upstream sector regulator BPMIGAS encouraged foreign oil and gas contractors that operate in Indonesia to use the service of local banks in making transactions so that the local banks could benefit from their operations. Previously, most of them parked their funds in banks overseas, particularly Singapore -- a situation that sparked criticism that their operations in the country did not bring benefits to the local financial sector.

According to the press statement, transactions by production sharing contractors through national banks from April 2009 through April 2010 totalled US$4.69 billion, including $3.23 billion through Mandiri. Meanwhile, transactions through Bank Syariah Mandiri reached $291.30 million during the period. (Bodega)