Indonesian watchdog urges LNG contracts review

Indonesia Corruption Watch has urged Indonesia to review contracts on Tangguh as well as Senoro LNG sales and expose the price formulas transparently, according to a press report.

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 23 -- Indonesia Corruption Watch (ICW) has urged Indonesia to review contracts on Tangguh as well as Senoro LNG sales and expose the price formulas transparently, according to a press report.

Bisnis Indonesia said a review by ICW shows that the state received 440.44 trillion rupiahs ($37.4 billion) from LNG sales in 2000-08, while ICW calculates the amount should have reached 515.04 trillion rupiahs, a 17% difference.

The state has incurred the losses due to the lack of transparency and accountability in the management of the extractive industries, especially the oil and gas industry, according to Firdaus Ilyas, coordinator of ICW's data and analysis division.

"The government has never been transparent in explaining their formulas to calculate prices in the closed sales contracts," Firdaus told reporters in Jakarta.

"The prices have also been below the market prices. Contracts on LNG sales from Tangguh and Senoro really incur losses to the state. This should be reported to the public," Firdaus said.

He said the profit split is 65% for the state and 35% for the partner contractors, some 5% lower for the state than "the usual" 70%.

Contact Eric Watkins at hippalus@yahoo.com.

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