The Pertamina Boss Bluntly Explains Regarding The IDR 40 Trillion Lawsuit From The Mozambique Oil And Gas Company

President Director of Pertamina, Nicke Widyawati. (Photo: Doc. Pertamina)

JAKARTA - Pertamina President Director Nicke Widyawati finally opened her voice regarding the sale-purchase agreement (SPA) for liquefied natural gas or LNG from Mozambique. According to him, the gas import plan has been running since 2013, during the leadership of Karen Agustiawan.

Nicke explained the reason the company was looking for natural gas to foreign countries was because the Ministry of Energy and Mineral Resources released data that Indonesia would have a natural gas deficit in 2025. Meanwhile, Mozambique was chosen because it has a large natural gas source.

"This has actually been going on for a long time, we're negotiating since 2013. Of course, for this long term contract of LNG, we use the 2011 national gas balance (which states the natural gas deficit in 2025). So that begins the search for LNG sources from outside", she said, in a meeting with Commission VII House of Representatives, Tuesday, February 9.

In 2014, the two companies signed an initial agreement or HoA with a volume of 1 million tonnes per year (MTPA) for 20 years with the first shipments in 2025 in stages. The price is DES (delivered ex-ship) 13.5 percent of the Japan crude cocktail (JCC).

Then, in 2017, the two parties held another discussion regarding the addendum (additional article) to the sale-purchase agreement (SPA) due to changes in market conditions. A year later, they finalized the HoA.

In February 2019, Pertamina signed a sale and purchase agreement with Anadarko. The gas comes from Mozambique LNG1 Company Pte Ltd which is owned by Mozambique Area 1, a subsidiary of Anadarko.

Nicke explained that this long-term contract uses the 2018 gas balance calculation. However, Pertamina plans to review the LNG import contract negotiations from Mozambique because the current gas balance is different from last 2018.

"The basis for Pertamina's planning refers to the national gas balance because it is seen that there is a shortage in 2025 so corporate action is carried out. However, considering the post-COVID-19 situation, which we do not know for how long, we see that demand has decreased", she said.

Denying the lawsuit

Meanwhile, Nicke also denied that there was a lawsuit from Mozambique regarding the LNG import contract. According to her, the contract has not yet been implemented, so it can still be reviewed.

"The lawsuit does not exist because it will be implemented in 2025. Today we are reviewing the overall gas supply and demand due to the principle of caution. The gas supply planning balance is different after COVID-19", she explained.

Previously, Commission VII of the House of Representatives questioned the issues that had entangled PT Pertamina (Persero) until it was sued by the oil and gas company from Mozambique, Anadarko Petroleum Corporation. The estimated value of the lawsuit is USD 2.8 billion or around IDR 40 trillion.

Pertamina was sued by Anadarko for failing to realize the Sales Purchase Agreement (SPA) of liquefied natural gas or LNG from Mozambique. In fact, this SPA was signed by Pertamina and the Mozambique LNG1 Company, which is a subsidiary of Anadarko in February 2019.

A member of Commission VII House of Representatives from Gerindra faction, Kardaya Warnika said the government had to step in to settle this lawsuit because Pertamina signed the purchase of LNG from Mozambique based on the projected domestic demand for natural gas.

"So don't let them handle this alone, help them (Pertamina), please help Pertamina so that they don't get sued with a demand of IDR 39.5 trillion", he said, during a Commission VII working meeting with the Ministry of Energy and Mineral Resources, Arifin Tasrif, Tuesday, January 19.