Indonesia asked to limit IOC contract lengths

Indonesian firms have asked the government to restrict oil and gas contracts with international companies to a maximum of 1 year, according to the head of the National Oil & Gas Caucus.

July 31, 2006

Eric Watkins
Senior Correspondent

LOS ANGELES, July 31 -- Indonesian firms have asked the government to restrict oil and gas contracts with international companies to a maximum of 1 year, according to the head of the National Oil & Gas Caucus.

"If such contracts are to be extended, then the relevant foreign companies have to be required to involve private local firms," said Effendi Siradjuddin, chairman of NOGC and the Association of Indonesian Oil & Gas Companies.

Siradjuddin said the proposal will be submitted to the government in a document entitled "2020 Indonesia Incorporated in Oil and Gas," which lists efforts needed to develop local oil and gas companies.

Siradjuddin did not say when the document would be submitted, but he observed that private Indonesian oil and gas companies' participation currently is limited despite Indonesian firms' relative mastery of the necessary technology and quality human resources.

Siradjuddin said involvement of local firms that understand the country's environmental conditions will generate confidence that they can realize sustainable development in Indonesia.

Contact Eric Watkins at [email protected].