Govt understands Japan's decision to cut down gas purchase

Director general of oil and gas Rachmat Sudibyo said on Tuesday that the plans by a Japanese firm to cut down its gas purchase from Indonesia from 500,000 tons per year to 150,000 tons per year starting 2004, and to shorten the contract from 20 years to between 5-10 years was a normal business phenomenon.

Rachmat pointed out the Japanese had said that the reason for the lower purchase was due to a decline in electricity demand in Japan.

He dismissed suggestions that Japan cut down the gas purchase from Indonesia because of increasing social and political instability in the country, and declining gas reserves in Arun.

He said that Indonesia still abundant gas reserves particularly in Bontang and Tangguh gas fields.

Meanwhile, a source at the state owned oil and gas firm said that the decision by Japan to lower its gas purchase from Indonesia because the current Pertamina president Martiono Hadianto had failed to develop good relations with the company's Japanese customers.(*)