RI, Britain sign oil and gas cooperation

Minister of Energy and Mineral Resources Purnomo Yusgiantoro and visiting British Trade Minister Richard Caborn signed the memorandum of understanding on Thursday on the cooperation to develop of Indonesian oil and gas resources.

Both parties have formed a joint working group to further formulate the details of the cooperation.

Purnomo said in a statement distributed to the press that British companies have been active in the Indonesian oil and gas sector for many years and they had a leading role in the projects such as the planned Tangguh Liquefied natural gas (LNG) project in Irian Jaya and the West Natuna gas project in South China Sea.

British companies were also active in the oil and gas related engineering and service sector.

"There is potential for substantial additional investment in the Indonesian oil and gas sector from these and other British companies.

"This is likely to materialize once new legislation is passed, clarifying the future operating environment investment," Purnomo said.

The continued competitiveness of the production sharing contract terms for exploration and production will also be a key factor in the face of intensifying competition from the other resource rich countries, Purnomo added.

Britain had gathered a great deal of experience over the past 30 years from the development of its offshore oil and gas reserves and from pioneering the restructuring of its gas industries.

"This experience is relevance to the Indonesian government's current agenda for its oil and gas sector, " he said.

The British experience in the oil and gas service sector can provide some useful pointers for Indonesia as it seeks to expand local capability in this area. Added to this, it is clear that many British companies have developed skills and technologies which Indonesia now has a need for, Purnomo said.

"A plan of action has been drawn to facilitate the collaboration between Indonesian and British small and medium enterprises focusing on targeted skills areas and technologies," he said.

Purnomo added Britain has experience in privatization, the dismantling of monopolies in the public utilities sector, and the establishment of regulatory bodies.

Britain has also pioneered combined private sector and government supported cost cutting programs in the offshore oil and gas sector.

"The knowledge gained from these initiatives area seen as being highly relevant to Indonesia as it implements its own oil and sector restructuring program, and as Indonesia seeks ways to increase the competitiveness of the sector in the fact of the ever-increasing international competition,

"An action program has been developed to provide Indonesia with access to this experience," Purnomo said.

This Indonesian and British cooperative initiative in the oil and gas sector will help to ensure that the potential for investment, trade and technological interchange between Britain and Indonesia is fully developed and the benefits from this area jointly shared, Purnomo said. (godang)