PSC to save $250m in costs as part of efficiency
Friday, December 4 2015 - 12:49 AM WIB
Upstream authority SKK Migas has completed negotiations with the country?s Production Sharing Contract (PSC) holders on efficiency measures to cope with the decline in oil prices that will result in saving of costs amounting to US$250 million.
?We did the negotiation because in view of the current oil price situation, there are a lot of activities that should be considered uneconomical,? SKK Migas's Business Support Deputy Rudianto Rimbono told Petromindo.com.
Rudianto explained that there are several ways to carry out efficiency. ?For example, there is a PSC holder which initially planned to drill 70 wells. Because of the oil price drop, the company considered there were only seven wells which were economical to be drilled. After negotiation, the contractor finally agreed to drill 35 wells, which is a win-win solution for the contractor and SKK Migas,? he said.
There are also cases in which the contractors managed to renegotiate their contracts on ships, EPCI, OCTG, drilling, turbomachinery etc., in which the values of the contracts are unchanged but the contract period has been extended, he said.
"The negotiations started in April and May of this year," Rudianto added.
Editing by Johannes Simbolon