Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, July 20 -- Chevron Pacific Indonesia and ConocoPhillips have agreed to establish a new trade contract to replace an earlier swap agreement between them for oil and natural gas.
Under their former agreement, 50,000 b/d of oil from Chevron's Duri field in Riau were exchanged for 400 MMscfd of gas from ConocoPhillips’s Corridor gas field in Southern Sumatra.
Chevron needed the gas to inject into the Duri field to enhance oil recovery, but the swapped oil was never classified as part of Indonesia’s oil and gas production, reducing income to the government.
However, Indonesia lawmakers pressured state oil and gas regulator BPMigas to encourage the companies to scrap the swap agreement and replace it with a new agreement.
“With the contract changes, the mandate from legislators has been fulfilled,” said BPMigas Chairman R. Priyono, who added that the government could now earn $200-300 million/year from the new contract between the two majors.
Contact Eric Watkins at [email protected].
