Oil, gas bill will slash govt revenue: Pertamina<\/p>\n
JAKARTA (JP): State oil and gas company Pertamina warned on
\nThursday that the government-proposed oil and gas bill currently
\nbeing debated by the House of Representatives, if passed, would
\npotentially reduce the government's revenue from the oil and gas
\nsector.<\/p>\n
Pertamina president Martiono Hadianto also expressed concerns
\nover what he saw as a lack of the bill's commitment to support
\nnational oil and gas companies amid domination by foreign
\ncontractors.<\/p>\n
"The bill's objective of securing the government's revenue and
\ndevelop national oil and gas companies will be hardly
\nattainable," he said in a statement.<\/p>\n
Martiono noted that the fact that the bill gives freedom to
\noil and gas contractors to choose types of cooperation contracts
\nother than the currently applied production sharing contract
\n(PSC) system would be a "setback" to the country's oil and gas
\nsector.<\/p>\n
He said the PSC system was introduced by Pertamina, and is
\ncurrently being imitated by dozens of developing countries to
\nobtain maximum benefits from their oil and gas resources.<\/p>\n
Pertamina's founding fathers, he said, took pains to make the
\nPSC acceptable to multinational oil and gas companies, which
\nbasically prefer the royalty system to the PSC.<\/p>\n
Although the bill does not specify the cooperation contracts
\nthat foreign contractors can choose, Martiono believed the
\ncontract of work (COW) system currently applied in the country's
\nmining sector would be one of the alternatives.<\/p>\n
Under the COW system, Martiono said, mining contractors pay
\ntaxes and royalties only to the government, both of which are
\nlower than the profit share received by the government from oil
\nand gas contractors under the PSC system.<\/p>\n
Under the PSC system, Pertamina holds the management of the
\noil and gas contractors to control the expenditures, while under
\nthe COW system, the contractors manage their spending themselves.<\/p>\n
Minister of Mines and Energy Kuntoro Mangkusubroto said on
\nThursday that for the moment, the government had no intention of
\nchanging the PSC system but might allow oil and gas contractors
\nto choose other types of contracts in the future.<\/p>\n
"The cooperation contract is a generic term. It can be PSC,
\nCOW or some other," he said on the sidelines of a hearing with
\nthe House task force on the bill.<\/p>\n
Martiono noted that the bill would mostly be beneficial to
\nforeign oil and gas companies. As such, it did not support the
\nconstitutional doctrine that "the natural resources should be
\nutilized for the maximum benefit of the people."<\/p>\n
He also said the bill was in conflict with the national
\nconstitution, which says that the country's natural resources are
\ncontrolled by the state not the government, arguing that the
\nstate is different from the government.<\/p>\n
The bill aims at turning Pertamina into a limited liability
\ncompany and lifting the decade-long monopoly held by the company
\non the country's oil and gas downstream sector.<\/p>\n
Under the bill, the government will also take over the
\ncompany's right to award contracts and regulate and manage
\nforeign oil and gas contractors.<\/p>\n
Martiono was pessimistic that the government would be able to
\nmanage and regulate oil and gas contractors.<\/p>\n
"The bureaucratic pace of work is less suitable to business,"
\nhe said.<\/p>\n
Martiono said Pertamina could accept the bill's objective of
\nrevoking its monopoly on the downstream sector but he said it
\nshould be done gradually.<\/p>\n
He said Pertamina was ready to meet the government's request
\nto focus on its core business of exploration and production.<\/p>\n
But the government should give it enough freedom to do so,
\nMartiono said, noting that the government had thus far taken over
\nmost of the company revenue and provided it with a limited budget
\nfor exploration and production.<\/p>\n
Meanwhile, the House task force on the bill has agreed with
\nKuntoro on the schedule and rules of the deliberations on the
\nbill.<\/p>\n
Kuntoro said he was optimistic that the bill could be passed
\ninto law before the general election in June. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/oil-gas-bill-will-slash-govt-revenue-pertamina-1447893297",
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