Indonesian oil at $19.47 a barrel

JAKARTA (JP): Indonesian oil prices on the world market during the April to September period averaged US$19.47 per barrel, exceeding the $16.50 set by the government in its state budget during the current fiscal year, ending next March 31.

"Oil prices on the world market were very stable during the last five months," the president of state-owned oil company Pertamina, Faisal Abda'oe, said after a meeting to discuss the enforcement of a new labor regulation in the oil and gas sector with 42 firms operating under production sharing contracts with Pertamina.

He said that Indonesian oil prices exceeded $20 per barrel following the recent conflict between Iraq and the United States.

The price of Indonesia's benchmark oil, Sumatra Light Crude, increased to $21.02 per barrel in September from $19.49 in August, he said.

"I hope that the bullish condition will continue until the end of this year," he said.

On development of the Natuna gas fields, he confirmed that a number of foreign companies will be invited for a government tender in October.

Pertamina's Director of General Affairs Baharuddin said that negotiations are still underway with prospective buyers from Japan, Taiwan and Thailand, which plans to receive natural gas from Natuna through a pipeline.

According to Baharuddin, Thailand plans to buy one billion cubic feet of gas per day. "But we're competing with Oman to sell the gas to Thailand," he said, adding that Indonesia will offer Thailand the gas from Natuna at $3.10 per million British Thermal Units (BTU).

Minister of Manpower Abdul Latief used the occasion to formally hand over the text of a new labor regulation in the oil and gas sector that will affect the 42 companies that are Pertamina's partners in its production sharing contracts as well as the state-owned firm's foundation.

Abda'oe noted that the new regulation requires, among other things, that the companies operating under production sharing contracts with Pertamina improve the welfare of oil and gas workers, which, according to the latest data, total 21,529 people.

"This includes an increase in transportation, health and housing allowances and a requirement to set up pension funds," he said.

Abda'oe said that the regulation, which has been approved by the minister of manpower, was designed by a team of government officials and private company representatives involved in the oil and gas industry. (13)