British Petroleum has agreed to participate in the development of geothermal energy in Indonesia, President Susilo Bambang Yudhoyono said here on Friday.
“BP in talks just now agreed to participate in the development of geothermal energy in Indonesia thus to increase our power capacity,” he said at a press conference.
President Yudhoyono said the agreement was the result of his talks with BP CEO Bob Dudley at Gedung Agung.
He said so far geothermal energy in the country has not yet been exploited well despite the fact that the country has the world’s biggest reserves.
He said that, despite incentives for the sector, the energy source has not yet been well developed due to investment challenges.
The oil subsidy had also made the price of geothermal energy not competitive yet, he added.
The President reiterated that geothermal energy is one of the future environmental friendly renewable energy sources.
President Yudhoyono also expressed appreciation to BP for agreeing to transfer 230 cubic feet of gas per day from its Tangguh field in Papua to domestic industries. The gas from the field had so far been exported.
President Yudhoyono said the agreement would support economic development, especially domestic industrial development.
He said the government in the future must make efforts to re-negotiate its working contracts so that the gas produced by fields in the country could be sold to the domestic market.
“In view of our economic challenges the government had actually conducted re-negotiations to [ensure the gas produced in Indonesia is all exported abroad], which is certainly not fair and correct,” he said.
He noted, however, the government would always respect the contracts that have been signed. “I honor the contracts but I also appeal to investors, business leaders in Indonesia to understand the situation in Indonesia. If the contracts are considered not right and not quite fair we, with a good will, wish to improve them and renew them,” he said.
