ID :
18376
Mon, 09/08/2008 - 09:55
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Shortlink :
https://www.oananews.org//node/18376
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KADIN ASKS GOVT TO RENEGOTIATE LNG CONTRACTS
Jakarta, Sept 7 (ANTARA) - The Indonesian Chamber of Commerce and Industry (Kadin) called on the government to renegotiate its LNG sales contracts with a number of countries in an effort to help strengthen its liquidity in the future.
"Kadin is calling on the government and the Upstream Oil and Gas Regulating Body (BPH Migas) to initiate a renegotiation of its LNG sales contract with a number of countries," Chairman of Kadin's Permanent Committee for Fiscal and Monetary Affairs, Bambang Soesatyo said here on Sunday.
He said that since 2000, the government had had some 70 LNG sales contracts with other countries. Of the 70 contracts, 50 had experienced the same fate as that of the Tangguh contract with Fujian province, China.
"It is only reasonable to renegotiate the LNG sales contracts because the market character today has turned to be that of the seller or seller market where prices are set by the seller due to the upward trend of oil prices in the world market," he said.
He said that the high price on the world market prompted many countries to shift to gas for their fuel oil use, including consumer countries which were Indonesia's LNG export destinations.
Bambang said that the renegotiations should be based on the assumption of future oil price. "Now, the oil price has dropped to US$107 per barrel. At what point the price will find its equilibrium should serve as a base for our renegotiations," he said.
He said that many analysis had forecast the price equilibrium point at US$70 per barrel.
LNG sales contracts made in the 2000s were generally based on a price between 23 and 30 dollars per barrel.
"But the formulation of price in the renegotiations should take into account the 2009 geopolitical considerations owing to the fact that the United States would be led by a new president," he added.
"Kadin is calling on the government and the Upstream Oil and Gas Regulating Body (BPH Migas) to initiate a renegotiation of its LNG sales contract with a number of countries," Chairman of Kadin's Permanent Committee for Fiscal and Monetary Affairs, Bambang Soesatyo said here on Sunday.
He said that since 2000, the government had had some 70 LNG sales contracts with other countries. Of the 70 contracts, 50 had experienced the same fate as that of the Tangguh contract with Fujian province, China.
"It is only reasonable to renegotiate the LNG sales contracts because the market character today has turned to be that of the seller or seller market where prices are set by the seller due to the upward trend of oil prices in the world market," he said.
He said that the high price on the world market prompted many countries to shift to gas for their fuel oil use, including consumer countries which were Indonesia's LNG export destinations.
Bambang said that the renegotiations should be based on the assumption of future oil price. "Now, the oil price has dropped to US$107 per barrel. At what point the price will find its equilibrium should serve as a base for our renegotiations," he said.
He said that many analysis had forecast the price equilibrium point at US$70 per barrel.
LNG sales contracts made in the 2000s were generally based on a price between 23 and 30 dollars per barrel.
"But the formulation of price in the renegotiations should take into account the 2009 geopolitical considerations owing to the fact that the United States would be led by a new president," he added.
