SKK Migas, BI turns down Inpex proposal on Masela earnings
Tuesday, October 29 2013 - 02:01 PM WIB
Upstream authority SKK Migas and central bank Bank Indonesia (BI) have turned down a proposal from Japanese firm Inpex Corp. to be excluded from the obligation to transfer export earnings of Masela block to Indonesian banks.
The obligation for PSC holders to transfer their export earnings to local banks is stipulated in Bank Indonesia Regulations No14/17/2012 and 14/25/2012. The regulations aim among others to boost foreign exchange liquidity in Indonesian banks.
In a confidential report to the House of Representatives? Commission VII which was leaked to Petromindo.com, SKK Migas said it had held talks with BI to discuss Inpex?s proposal and both have finally agreed that Abadi LNG project in Masela block has to comply with the BI regulation like the Train 3 project in Tangguh LNG plant.
?The minister of finance has issued an approval for Transactional Banking Service (TBS) for the Masela project which is in line with the BI regulation,? SKK Migas said in the report.
Inpex and its partner Shell (with 65-35 percent share composition) plan to develop a floating LNG production facility at Abadi field.
The BI regulation has been universally rejected by PSC holders who argue that it is in conflict with the PSC which stipulates the contractors? production shares belong to the contractors and thus they have the full right to place the earnings wherever they want.
Editing by Johannes Simbolon