"I cannot understand how the production costs can go up when the results are down," Jonan said.Jakarta (ANTARA News) - Minister of Energy and Mineral Resources (ESDM) Ignatius Jonan has said that he was surprised to see the rise in domestic gas production cost, which is higher than that abroad.
"I cannot understand how the production costs can go up when the results are down," Jonan stated, while speaking at a National Gas Forum in a Jakarta hotel, on Wednesday.
He called on all production processes to be more efficient, no matter which system is being used. "No matter whether its gross split or cost recovery system, the important thing is that serious efforts must be made from time to time to create efficiency," he stated.
Jonan also explained this to the president, but he was sure that the president could not understand the reason behind the high cost. He also appealed for the improvement in quality of domestic production.
In other words, if the price is high, then the level of quality and quantity of gas must also be high.
"This business should be done in a professional manner and not like those done in a workshop, where the production cost is higher than the price. There is no business like that," Jonan explained.
He also compared the cost of oil and gas production in developed countries and those of Indonesia. The former transportation minister found that in a more developed country, about 70 percent of the value of employees goes into a variable count.
Since it cannot be done in Indonesia, many fixed costs cannot be reduced. If it cannot be reduced, then the production must go down.
"I have already discussed this matter with Upstream Oil and gas Regulator SKK Migas, but I still cannot understand it. If it takes too long, either it can be replaced or SKK Migas officials can be replaced. Hence, in essence, I want the quality and efficiency to be increased," Jonan revealed.(*)
Editor: Heru Purwanto
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