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Indonesia to Take on China in Gas Talks
Ririn Radiawati Kusuma | September 15, 2011

Indonesia is seeking to raise the price paid by China National Offshore Oil Corporation for gas from a plant in Tangguh, West Papua, by 400 percent, officials said on Thursday. (Antara Photo) Indonesia is seeking to raise the price paid by China National Offshore Oil Corporation for gas from a plant in Tangguh, West Papua, by 400 percent, officials said on Thursday. (Antara Photo)
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DrDez
7:16pm Oct 11, 2011

Just in case the KPK are brave enough:

A court in Ukraine has sentenced Yulia Tymoshenko, the country's former prime minister, to seven years in jail after finding her guilty of abusing her authority when she ordered state energy firm Naftogaz to sign a gas deal with Russia in 2009.............

Link http://english.aljazeera.net/news/europe/2011/10/2011101161634757360.html


DrDez
12:50pm Sep 16, 2011

Roland

The recent trade deal does not include any more give away on minerals except coal

This deal was a deal in isolation as far as I can see - I must say I can't even recall it being announced which is surprising since we announce all the good trade news ...and then again perhaps its no surprise and Yes its a disgrace that a decade is passed before its investigated - that may have even been part of the deal who knows.

Val - yup some oddities


Serigala-Berbulu-Domba
11:53am Sep 16, 2011

Valkyrie

..and what is she doing in North Korea?

I would hazard a guess that she's visiting North Korea to get started on the internationally renown and very effective North Korean diet plan.

Valkyrie
11:32am Sep 16, 2011

Roland:

Trust you read my previous post? Have a go at googling "Mega's Cabinet" Study the personalities that were sitting in her cabinet. A few names may surprise you.

ps

just contributing a theory.

Roland
11:16am Sep 16, 2011

DrDez - I am aware that it was discussed but nothing else happened. It was so far only words about re-negotiations. Ok, they seem to have found common ground with Petronas, but somehow the new rate seems to be still far under the current global value (or the Japanese deal for gas is far overprized). I am also not sure if there are additional deal with China and Malaysia (probably in regards of imports / exports) in connection with this ridiculous deals. Who is going to take the responsibility for these incredible state losses.

Ok, SBY ordered a review, but did he also "demanded" or "ordered" or whatever he likes to ensure that it is ensured that the Indonesian parties responsible for these losses have to face judgement? I mean, everybody makes once in a while a bad deal, but that this went on for years (almost a decade) before a review is even ordered borders on insanity, except there have been other deal favorable for Indonesia as a whole (and not just some individuals) connected with this farce.

After successfully renegotiating the gas price with Malaysia’s Petronas two months ago, the government is now stepping up its efforts to talk with another buyer — China’s largest producer of offshore crude oil and natural gas.

Indonesia is seeking to raise the price paid by China National Offshore Oil Corporation for gas from a plant in Tangguh, West Papua, by 400 percent, said Hatta Rajasa, the coordinating minister for economic affairs.

“We have prepared a team for this,” Hatta said on Thursday, adding that the team included officials from the energy and finance ministries.

Hatta said the team would seek a new price formula to reflect the existing global price. The team was seeking payments “as high as the international price” for liquefied natural gas, Hatta said, without elaborating.

The government wants to raise the gas price to $12 per million British thermal units, from the current $2.40 per mmbtu. The first gas contract was signed in 2002 during Megawati Sukarnoputri’s presidency.

By comparison, the price of natural gas exported to Japan from plants at Arun in Aceh and Bontang in East Kalimantan is between $13 and $18 per mmbtu, Hatta said.

Hatta said the upstream oil and gas regulator, BP Migas, was ready to discuss the new rate with CNOOC. The contract is reevaluated every four years.

CNOOC account manager Ivis Tsang was not available for comment.

BP Migas head Raden Priyono said the government was also talking to state-owned company Perusahaan Gas Negara about raising the price it paid for LNG. “I have sent a letter to Minister of State Enterprises [Mustafa Abubakar], but he is in hospital now,” Priyono said.

BP Migas proposed PGN pay $5.50 per mmbtu, up from the current $1.80 per mmbtu.

The pair of negotiations have enormous financial implications for Indonesia. Earlier this month, Priyono forecast that the benefit to the government could amount to $6 billion a year.

Industry analyst Kurtubi, from the Center for Petroleum and Energy Economic Studies, had previously called for the government to prosecute those responsible for the low price in the initial contract.

In July, BP Migas and Petronas Carigali, a subsidiary of Malaysia’s state-owned energy giant Petronas, agreed to a new rate at close to $6 per mmbtu, more than double the previous price of $2.80 per mmbtu.

BP Migas has been working to renegotiate prices in a bid to boost revenue in line with the rising global price for natural gas.

LNG producers in Indonesia include ConocoPhillips, Total E&P Indonesie and state-run Pertamina.

The price paid for exported gas is usually higher than that charged to Indonesian utilities and companies.