Total, BNI signs deal on Mahakam gas sales

JAKARTA. France-based Total E&P Indonesie has appointed state-owned Bank Negara Indonesia (BNI) as the former’s trustee and paying agent for gas sales from the Mahakam block in East Kalimantan.

Total E&P Indonesie president director Elisabeth Proust said on the sidelines of the signing of the agreement on Monday that the BNI appointment was part of the 2010 agreement among the Mahakam stakeholders to use the state-owned bank as the trustee for the gas sales.

“Our firm would like to acknowledge that the Indonesian banking industry has the capability and professionalism to move forward and expand their knowledge in handling international banking transactions such as the trustee business originating from the oil and gas industry,” she said.

Total E&P Indonesie has a 50 percent participating interest in the Mahakam block as well as being the offshore block’s operator, while Inpex owns the remainder.

Under the agreement, all payments for gas sales from the Mahakam block will be transferred to the seller’s bank account in BNI at the publicly listed bank’s branch in Singapore.

Prior to the agreement, the trustee and paying agent for the Mahakam gas sales was the New York branch of London-based HSBC.

The proceeds from the gas sales are estimated to be US$18 billion over 10 years.

The selection came amid a recent spat between Bank Indonesia (BI) and major oil firms after the central bank insisted that contractors deposit their dollar-based export proceeds in domestic banks.

Proust, however, declined to comment on whether Monday’s agreement would pave the way for Total to comply with the rule. Along with other giants such as US-based Chevron and ExxonMobil, Total has been reluctant to comply with the rule.

The upstream oil and gas regulatory special force SKKMigas head Rudi Rubiandini said prior to the agreement that all transactions related to LNG sales were through foreign banks instead of local ones. “The situation at this time is that Indonesian banks have not been trustees and paying agents in the oil and gas industry. With this agreement, we hope we can change that,” he said. (Amahl S. Azwar/The Jakarta Post)