The Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) stated 11 letters of agreement (LoA) to adjust industrial gas prices and electricity to the US $ 6 per million British thermal units / MMBTU re-signed.
SKK Migas recorded total gas volume according to the LoA of 231.18 billion British thermal units per day / BBTUD. Thus, the total volume of gas sold at US $ 6 per MMBTU according to government policy has now reached 564.63 BBTUD or 47.53% of the total volume of 1,188 BBTUD in the Minister of Energy and Mineral Resources Decree No. 89K / 2020 concerning Procedures for User Determination and Natural Gas Prices Certain in the Field of Industry.
The LoA was signed by six national gas producers, namely PT Pertamina EP, Kangean Energy Indonesia Ltd., PT Pertamina Hulu Energi (PHE) Jambi Merang, PT PHE Ogan Komering, PT PHE North Sumatra Offshore (NSO), and PT PHE West Madura Offshore (WMO) and partners.
Blogger Agus Purnomo in PHE-WMO
While buyers who signed this agreement were PT Pertamina Gas (Pertagas), PT Sumber Petrindo Perksana, PT Petrokimia Gresik, PT Bayu Buana Gemilang, PT Inti Alasindo Dwiguna, and PT PGN Tbk, PT Pertagas Niaga. Not only LoA, nine oil and gas producers have also signed a Side Letter of Production Sharing Contract (PSC).
These nine companies are PT Pertamina EP, PT PHE NSO, PT PHE Ogan Komering, PT PHE Jambi Merang, PT PHE Offshore South East Sumatra (OSES), EMP Bentu Limited, Kangean Energy Indonesia Ltd., PT Pertamina Hulu Mahakam, and Minarak Brantas Gas Inc.
"This signing was carried out in order to provide legal certainty and investment related to the adjustment of gas prices after the issuance of a number of regulations from the Ministry of Energy and Mineral Resources," Head of SKK Migas Dwi Soetjipto.
The Side Letter of PSC explains the profit-sharing adjustment between SKK Migas and oil and gas producers by using a provisional entitlement to the application of natural gas prices determined by the Minister of Energy and Mineral Resources. This calculation is carried out through a mechanism to reduce the share of the country on a monthly basis to maintain the revenue share of oil and gas companies.
Whereas the LoA is a continuation of a previously signed agreement between the seller and buyer of natural gas. The essence of the agreement stipulated in the LoA includes volume, initial gas price, gas price adjustment, and implementation period.
"By signing this side letter of PSC and LoA, we hope that oil and gas producers can continue to increase their investment in Indonesia and maintain the national gas production target," Dwi said.
Chalid Said Salim
PT Pertamina EP President Director Chalid Said Salim appreciated SKK Migas for providing investment certainty in the upstream oil and gas sector through the signing of the Side Letter of PSC and LoA.
"We certainly appreciate this step because it will encourage increased investment in upstream oil and gas in the future. In the short term, Pertamina EP and SKK Migas will optimize the program this year so that it is efficient as the capital stepped up in the following year, "Chalid said.
Investor Daily, Page-10, Friday, June 5, 2020
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