Wednesday, 17 June 2009

Signing of Joint Account for Deposit of Abandonment and Site Restoration Budgets

BP MIGAS and 6 contractors signed a joint account to deposit their abandonment and site restoration funds with Bank BNI and Bank Mandiri. The total budgets deposits in the state banks totaled USD 38 millions.

In detail, the Joint Account Agreements signed were :

1. Between BP MIGAS, BP Berau Ltd and 2 banks, namely PT BNI (Persero) Tbk and PT Bank Mandiri Tbk;
2. Between BP MIGAS, BP Muturi Ltd and 2 banks, namely PT Bank BNI (Persero) Tbk and PT Bank Mandiri Tbk;
3. Between BP MIGAS, BP Wiriagar Ltd and 2 banks, namely PT Bank BNI (Persero) Tbk and PT Bank Mandiri Tbk;
4. Between BP MIGAS, ConocoPhilips Ltd, and PT Bank Mandiri (Persero) Tbk;
5. Between BP MIGAS, Chevron Makassar Ltd, and PT Bank Mandiri Tbk;
6. Between BP MIGAS, JOB Pertamina, Medco E&P, Tomori Sulawesi and PT Bank BNI (Persero) Tbk.

The signing of the joint account agreements is an attempt to comply with Government Regulation No. 35/2004 on Oil and Gas Upstream Business Activities and Regulation of Minister of Energy and Mineral Resources No. 22/2008 on Non-Cost-Recoverable Costs and as the implementation of Cooperation Contract.

Abandonment and site restoration budgets are amounts set aside by Cooperation Contract Contractors to uproot oil production facilities and restore environmental surroundings after they completed their operations.

The obligation to set aside abandonment and site restoration budgets applies to contracts signed since 1995 after Indonesia ratified the UN Convention on Law of the Sea (UCLOS) in 1985.

Head of BP MIGAS, R. Priyono, gladly welcome the signing ceremony since it indicates that oil and gas upstream industries have become a stimulator for other sectors, namely national banks. This was necessary in order to provide maximum benefits for the state.

Oil and gas upstream business activities significantly depend on non-renewable energy so this industry must give a multiplier effects on other sectors.
The formation of the joint account give a contribution to the development of national banking. Moreover, in future, there will be more banks to follow. If the previous signing ceremony was held in end of 2008 involving only 2 state banks, namely Bank Mandiri and Bank BNI. At present, there are 3 state banks involved in the signing of the joint account.

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