Upstream oil, gas industry boosts the role of national banks
Wednesday, February 26 2014 - 03:26 PM WIB
?If the transactions were conducted through national banks the impact on the national economy would be immense,? Deputy for Financial Control at the upstream oil and gas authority SKK Migas Budi Agustyono told a forum in Bandung on Wednesday held to promote the trustee services of domestic banks.
Also present in the event were oil and gas contractors? representatives and officials of Bank Indonesia and state banks.
Since 2008, SKK Migas (then BPMIGAS) has required oil and gas contractors to make payment transaction for procurement of goods and services via local banks.
Since its inception the policy has given a rise to transaction volume from $3.97 billion in 2009 to $6.348 billion in 2011 and $8 billion last year. Contractors are also required to deposit their abandonment and site restoration (ASR) funds in the national banks. As of Jan. 31, 2014 the ASR deposits reached $501 million.
SKK Migas is now promoting the trust services to support Bank Indonesia policy issued in 2012.
Budi said the policy was a response to contractors? doubt of the security of their money when deposited in the national banks.
The BI policy obliges oil and contractors to channel their dollar-based export revenues through local banks. Violation of the regulation will result in administrative punishment. So far BI has issued a letter for the suspension of export of three contractors for breaching the ruling.
Budi said the policy would enable the contractors to contribute to the national banking, particularly state banks, in the form of multiplier effects that will drive the national economy.
Darsono, a director at Bank Indonesia, said the upstream oil and gas industry played a pivotal role in stabilizing national economy, thanks to the huge cash flows involved in their business. He said the contractors would help rupiah withstand pressures.
Editing by Reiner Simanjuntak