Kardaya Warnika officially gets BP Migas top job
Kardaya Warnika officially gets BP Migas top job
Urip Hudiono, The Jakarta Post, Jakarta
Kardaya Warnika was inaugurated as the chairman of the Oil and
Gas Upstream Regulatory Agency (BP Migas) on Tuesday.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said on the sidelines of the inauguration ceremony that BP Migas
needed to be more careful in verifying the cost recovery
calculations submitted by oil and gas field operators.
"Cost recovery has a huge impact on government revenue," said
Purnomo.
Most production sharing contracts (PSCs) state that the
government will be entitled to 85 percent of the output and the
operator 15 percent.
However, such contracts become effective only after the
initial investment made by the operator prior to oil production
-- commonly known as cost recovery -- has been fully covered by
the output.
If cost recovery is factored in, the ratio could eventually
shrink to an even 50:50, Purnomo added.
The minister also expected the new leadership of BP Migas to
help push the country's oil and condensate output to reach 1.3
million barrels per day (bpd), compared to 1.1 million bpd at
present.
In his response, Kardaya said the agency had been studying the
possibility of introducing incentive packages to lure investors
and speed up the development of the sector.
"Later this month or early next month, we will announce our
incentive packages for marginal fields," he said, adding that
more than 30 small fields could start being developed after the
incentives were announced.
Starting 2002, Kardaya served as deputy chairman under his
predecessor Rachmat Sudibyo, who reached retirement age in the
middle of last year. Kardaya's appointment was unanimously
approved by the House of Representatives' mines and energy
commission after a selection hearing over two months ago.
The President then appointed the 53-year-old Kardaya by way of
presidential decree.
The other candidates for the top position were the ministry's
director general of oil and gas, Iin Arifin Takhyan, and BP Migas
operations director Trijana Kartoatmodjo.