The revenue potential reaches US$2.3 billion.
Nusa Dua, Bali (ANTARA) - Some 28 commercial agreements on oil and gas were signed during the 2022 International Convention III for the Upstream Oil and Gas Industry (IOG) in Nusa Dua, Bali, with the potential to generate US$2.3-billion revenue.

"The revenue potential reaches US$2.3 billion," Head of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) Dwi Soetjipto stated on the sidelines of the 2022 IOG here on Friday.

The agreement includes 10 documents regarding the Election Not To Take in Kind (ENTIK) procedure.

ENTIK is an agreement that regulates the duties and responsibilities of SKK Migas and the Cooperation Contract Contractors (KKKS) as sellers of the state's share of crude oil and condensate production.

In addition, there are 18 documents of natural gas sales and purchase agreement (PJBG), amendments to the PJBG, heads of agreement (HoA), memorandum of understanding (MoU) for pipeline gas, LNG and LPG.

From the 28 agreements, the potential of oil and condensate lifting is expected to reach 265 thousand barrels of oil per day and natural gas lifting of 390 billion British thermal units (TBTU), with a contract duration span of two to 11 years.

Soetjipto stated that the inking of the contract would translate to not only income generation but also support national economic growth.

He remarked that all crude oil and condensate would be supplied for domestic needs.

Part of the gas would be delivered to fertilizer and petrochemical factories in South Sumatra and Central Sulawesi for industrial development in West Java, Central Java, East Java, and Central Sulawesi and to meet the demand for state-run electricity firm PT PLN.

LPG from South Sumatra is planned to be entirely supplied for domestic needs.

"This shows the upstream oil and gas industry's commitment in maintaining national energy security," he remarked.

Commercialization of oil and gas, especially natural gas, has become one of the strategic pillars in supporting the achievement of SKK Migas' long-term vision, with a production target of one million barrels of oil per day and natural gas of 12 billion cubic feet per day (BSCFD) in 2030. This production will be prioritized for domestic buyers.

However, the industry has faced stagnancy in terms of domestic natural gas absorption. SKK Migas noted that since 2012, average growth in the use of natural gas by domestic buyers has reached one percent per year.

The growth is lower than the national economic growth that reaches five percent per year.

"Therefore, there needs to be a breakthrough from all parties to increase the need for domestic natural gas purchases," he noted.

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Translator: Dewa KS Wiguna, Sri Haryati
Editor: Rahmad Nasution
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