Jakarta—Seven of Gas Sales Agreements (GSA) were signed at the closing of the 42nd IPA Convention and Exhibition on Friday, 4 May 2018 in Jakarta. These agreements potentially increase the state revenue by approximately Rp 1.49 trillion or US$ 111.08 million.

Chairman of SKK Migas, Amien Sunaryadi revealed that the total volume of gas channeled during the contract period of the seven GSA would reach 65.41 trillion British Thermal Units (TBTU).

“In line with the commitment of the upstream oil and gas industry to support the national energy supply, all gas in the seven GSA will be channeled to meet gas domestic demand,” he added.

The gas covered by the GSAs will be supplied for production of fertilizers, oil lifting, oil refineries, electricity, city gas networks and industries. The allocation is based on the Regulation of the Minister of Energy and Mineral Resources No. 06 of 2016 on Requirement and Procedures for Decreeing the Allocation and Utilization and Price of Natural Gas. 

In accordance with the regulation, the policy of allocation and utilization of natural gas is directed to ensure the efficiency and effectiveness of natural gas availability as fuel, raw materials or other necessities for domestic needs oriented towards optimal utilization of natural gas.

On average, gas supplies for domestic demand increased by 7.37 percent in the last 14 years. Data on the realization of gas distribution up to February 2018 showed that the domestic gas supply reached 3,860 Billion British Thermal Units per Day (BBTUD) or 58 percent, which is above the gas supply for export amounting to 2,738 BBTUD (42 percent).

Amien conveyed that domestic energy demand is predicted to increase both for natural gas and crude oil. Therefore, massive oil and gas explorations both onshore and offshore are needed so as to find new large oil and gas reserves. “We must all support massive explorations,” he said.

Amien added that one of the necessary forms of support is from the Indonesian financial industry by facilitating the mobilization of funds. In addition, all parties should support exploration activities by facilitating licensing, streamlining land acquisition procedures, minimizing levies, and facilitating the settlement of problems relating to social aspects when they arise.

“All of them serve as a joint step to advance the common welfare and to improve the life of the people,” Amien concluded.