BP gas contract must be reviewed, says minister<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said
\non Tuesday that the government planned to review gas supply
\ncontracts with BP Indonesia for the Pagerungan gas field in
\nMadura Island, reported Antara.<\/p>\n
"There will be a review...because the contract seems
\nmonopolistic and gives privileges to the operator," he said,
\nreferring to BP Indonesia, which belongs to Anglo-American energy
\ngiant BP Plc.<\/p>\n
Purnomo claimed that when the contract was made, the structure
\nof the gas market was still monopolistic and gave gas producers a
\nstronger bargaining position against consumers.<\/p>\n
At the time, he claimed, the government was forced into
\nsigning the contract because East Java province badly needed the
\ngas from the Pagerungan gas field to run its booming industry.<\/p>\n
Under the contract, BP Indonesia is required to supply about
\n600,000 million cubic meters of gas per day. The contract also
\nstipulated that other gas operators were not allowed to invest in
\nthe province unless its gas demands exceeded 600,000 million
\ncubic feet of gas daily.<\/p>\n
Purnomo said that BP Indonesia could only supply about 180,000
\nmillion cubic feet of gas per day, which caused East Java to fall
\nshort by over Rp 400,000 million cubic feet of gas.<\/p>\n
Purnomo said that gas market today was no longer monopolistic,
\nbut competitive, which enabled consumers to take control.<\/p>\n
In the meantime, BP Indonesia could not be reached for
\ncomment.<\/p>\n
Recent gas leaks have forced BP to shut down five gas fields
\nin the Pagerungan contract area, which has also reduced gas
\nsupplies to only 100,000 million cubic feet per day.<\/p>\n
State-owned oil and gas company Pertamina president Baihaki
\nHakim has blamed BP for the incident, saying that it was caused
\npartly by BP's negligence in maintaining the gas pipeline.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bp-gas-contract-must-be-reviewed-says-minister-1447893297",
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"sponsor": "Okusi Associates",
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