BP Migas commences tender to sell crude
The Jakarta Post, Jakarta
Oil and gas upstream regulatory agency BP Migas is selecting firms for a six-month contract to sell condensate and crude oil.
BP Migas deputy head of finance, economy and marketing Eddy Purwanto said on Tuesday that the agency was selecting, through open bidding, three firms to sell a total of 625,000 barrels of condensate and crude oil per month, including 100,000 barrels of Cinta crude, 250,000 barrels of Duri crude and 250,000 to 275,000 barrels of Senipah condensate.
Some 30 companies are participating in the tendering process, which commenced last week. Among them are European trade group Vitol, the trading units of Total and Unocal, Pertamina Energy Trading Ltd (Petral), Korean-Indonesian Petroleum company (Kipco), Japanese traders Itochu Corp. and Mitsui & Co..
One firm will be selected to sell Cinta crude and two others will be given rights to sell Duri crude and Senipah condensate respectively for six months, from August to January next year.
"We are evaluating the tender participants. The winners will be announced later this week," Eddy said.
Eddy did not elaborate on the expected revenue for the government, but said the crude and condensate would be sold above the price specified in the Indonesia Crude Price index (ICP).
The ICP is the average price of several crudes produced in Indonesia.
Under production-sharing contracts, the government takes 85 percent of oil contractors' crude oil and condensate output and leaves the rest to contractors.
In the past, Pertamina held the right to sell the government's oil and condensate take, for which the state firm received a commission. However, under Oil and Gas Law No. 22/2001, BP Migas takes over the selling rights.
According to Eddy, the current tender is the third held by BP Migas to select sellers of the government's oil and condensate.
Indonesia crude oil output has been declining in the past five years due to aging oil fields and faltering investment in the sector. It is the only country in East Asia to have joined the Organization of Petroleum Exporting Countries (OPEC). However, it now produces 1.075 million barrels a day of crude and condensate, far below the country's output quota of 1.27 million bpd set by OPEC.