Mon, 18 Feb 2008
JAKARTA (JP): With soaring oil prices, which translate into higher revenues for oil producing firms, the government said it would attempt to renegotiate contracts with oil and gas operators in the country.

Energy and Mineral Resources Minister Purnomo Yusgiantoro revealed on Monday his plan to change the terms and conditions in the existing production sharing contracts, as had been requested by the House of Representatives' Commission VII on energy and mineral resources.

The commission has urged the government to review existing oil and gas contracts to anticipate higher oil prices in the future -- a move which has been carried out by other oil producing countries, including Venezuela, Bolivia and Ecuador.

The House said the proposal was aimed at increasing the state's earnings from the oil and gas sector.

Purnomo said the government was studying a new mechanism which would apply a calculation on a production split scheme based on the change in productions and prices.

Should it be approved by the operators; the government will also propose a better price for deliveries of Liquefied Natural Gas (LNG) to buyers.

The government also aims to import 19 million kiloliters (kl) of fuel products this year, 11.2 percent lower than 2007's import figures due to the ongoing kerosene-liquefied petroleum gas (LPG) conversion program.

At present, the country has 10 operating refineries with a total capacity of 1.15 million barrels of oil per day.

Indonesia still needs to import about 400 million barrels of oil per year to meet a national demand of 1.4 million barrels.(ika/**)



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