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Negotiable Gas Price Sakakemang Difficult

 


The Special Task Force for Upstream Oil and Gas Implementation (SKK Migas) is still in talks with Repsol regarding the fixing of gas prices from the Sakakemang Block development project.

the Sakakemang Block

Deputy of Finance and Monetization of SKK Migas, Arief Setiawan Handoko, said that discussions related to gas prices have been carried out many times. 

    The calculation of the price according to the economy is carried out between the Repsol Cooperation Contract Contractor (KKKS) and the SKK Migas Deputy Planning team. 

    Arief is optimistic that an agreement can be reached in the near future or before the end of 2020 along with the Phase 1 development plan or plan of development (PoD) of the Sakakemang Block.

"The Sakakemang economic gas price will soon be met, in the near future," said Arief.

The difficulty of this negotiation is due to the government's decision to set a maximum industrial gas price of US $ 6 per MMBtu. So, Repsol as the Sakakemang Block operator has an objection to the gas price. This Spanish company wants a price above the US $ 7 per MMBtu which is considered still in accordance with the economic value of the project. 

    Unfortunately, Arief is reluctant to reveal how the progress and the amount of gas price discussed so far. What is clear, he hopes that Sakakemang gas price can be economical and in line with the gas price policy of US $ 6 per MMBtu which has been decided by the government.

"If we are from the commercial sector, we must look at the gas price policy of US $ 6 per MMBtu, so that the selling price is easier," said Arief.

As is known, industrial gas pricing is regulated in Presidential Regulation No. 4/2016 and Minister of Energy and Mineral Resources Regulation No. 8/2020. According to Arief, the regulation is correct and can encourage KKKS to optimize its production costs. Repsol Stakeholder Relations Manager, Amir Faisal Jindan, said that currently, his party is still conducting the POD 1 approval process with the government.

"It's still a process," said Amir.

Kontan, Page-10, Saturday, Sept 26, 2020

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