SKK Migas revises procurement guidelines in upstream activities

Petromindo|Dasir

Upstream authority SKK Migas has issued new guidelines for oil and gas contractors in carrying out procurement of goods and services for upstream activities, which among others aimed at increasing the use of domestic goods and services, and improving efficiency in the procurement process.

SKK Migas said in a statement on Thursday it has issued the latest revision of the Second Book of Work Procedure Guidelines No 007 (PTK007 Revision 04) on the guidelines for procurement of goods and services.

The upstream regulator said it has also issued implementing guidelines (or better known under its acronym of Juklak) on tender based on PTK 007 Revision 04.

?New tender process at production sharing contractors since July 28, 2017 must have already applied the PTK 007 Revision 04 and the Juklak,? said Deputy of Procurement Control at SKK Migas, Djoko Siswanto in the statement.

He said that the concept applied in the drafting of the new PTK 007 Book is different from the previous PTK 007. ?The Second Book is made more concise because it only governs main policies in the procurement plans of goods/services and contract management, while things related to details on tender implementation is regulated by the Juklak,? Djoko said.

The changes in the PTK 007 Revision 004 and the Juklak are aimed to help increase oil and gas reserves and production, increase efficiency and speed up business process, as well as to encourage investment at home in a bid to increase the use of local contents, SKK Migas said in the statement.

PTK 07 Revision 04 and the Juklak are a follow-up to the government?s program to increase reserves and production among others by accelerating tender timeline, support on enhanced oil recovery (full scale), development of e-catalogue, implementation of Centralized Integrated Vendor Database (CIVD) and Approved Manufacturer Lists (AML) together with the upstream oil and gas industry.

?Tender is limited to 60 working days at the latest for goods, and 120 working days for services. Meanwhile, issuance of contracts is limited at 30 working days at the latest,? said Erwin Suryadi, Head of Procurement of Goods and Services Management Division at SKK Migas in the statement.

Acceleration in the process of goods and services procurement is also made possible with the implementation of the Centralized Integrated Vendor Database (CIVD), an integrated system of data on the vendors of goods and services of all oil and gas contractors. The CIVD process will cut down time required to evaluate administrative requirements of vendors.

As per July 31, 2017 the number of vendors already registered with CIVD has reached 7,823, and the number of vendors which have passed the evaluation process and have obtained SPDA certification is 4,481.

The PTK 007 Revision 04 and the Juklak also stipulates the increased utilization of domestically produced goods and services. The use of domestic goods and services are now ?mandatory? in upstream oil and gas activities. In the previous PTK 007, the term used was not ?mandatory,? but ?prioritize.?

Greater preference is given to the use of domestic vessels and drilling rigs, the SKK Migas statement said.

Meanwhile, tender worth Rp 10 billion or less can only be participated by vendors domiciled in the region where the upstream operations are located.

According to SKK Migas data, as per the first semester of 2017, of the total procurement of goods and services worth $3.28 billion (Rp 44.25 trillion, the local content commitment reached 58.94 percent or around Rp 22.95 trillion.

Editing by Reiner Simanjuntak