The value of goods and service procurement by all Cooperation Contract Contractors (KKKS) oil and gas reached US$ 11, 81 billion or about Rp 106 trillion. Within the period 2007 – 2011, the expenditure increased. Based on the data of BPMIGAS, the expenditure in 2007 was still US$ 6, 6 billion, increased becoming US$ 7, 97 billion in 2008, in 2009 was US$ 8, 85 billion, and then in 2010 became US$ 10, 8 billion.

According to General Deputy BPMIGAS, J. Widjonarko, the next year’s procurement will increase remembering that there are mega projects such as Banyu Urip in Cepu Block, Indonesia Deep Water in Makassar Strait, the development of Abadi Gas Field in Masela Block, and also East Natuna gas project.

“Each project valued more than US$ 2 billion, even some are tens of billions dollar,” says Widjonarko when opening Working Meeting of Goods and Services Procurement Forum in Bandung, as accepted from BPMIGAS website.

He reminded that goods and services procurement is the end point in budget spending process of upstream oil and gas activity and also as the milestone to start a project.

“It determines the timeliness to finish the project because two-thirds of the operational costs are spent through procurement function,” he says.

Widjanarko hoped there is acceleration process of procurement by referring to applicable regulation and also increasing national capacity empowerment. That is why, he asked procurement function to take strategic steps to reach the blur print target of Domestic Component Level (TKDN) for 91 % by 2025.

This year, we targeted TKDN for 65 %. He admitted that TKDN commitment decrease from 63, 4 % in 2010 to 60, 6 % in 2011. The decrease is caused by the changing of TKDN calculation procedure from price basis to cost basis. (AK)