Administration to seek share of oil revenue

JAKARTA (JP): A senior official and councilor has pushed the city administration to seek ways to obtain a share of the estimated billions of rupiah generated in massive ongoing oil exploration projects in the Thousand Islands area.

Deputy Governor for Economic and Financial Affairs Fauzie Alvi Yasin said on Tuesday the administration was studying the possibilities of obtaining shares in the multi-billion offshore exploration projects.

He said the newly enacted law on regional administration provided greater opportunities for Jakarta's administration to share the income.

"I have instructed the city's mines agency to study the possibilities in order to optimize the locally degenerated income for the city budget," he said after a plenary session on the enactment of a city bylaw on the 1998/1999 fiscal year for the budget.

The sole representative of the Indonesian Democratic Party (PDI) faction on the city council, Lukman Mokoginta, told the plenary session natural gas and oil were found in abundance in some 11,000 square kilometers of the Thousand Islands area.

He said the area surrounding Pabelokan Island, for example, had substantial oil and natural gas resources, projected at 400 million barrels.

"Since 1971, the natural resources have been explored by an offshore company, Maxus Southeast Sumatra Inc., with a production capacity of some 140,000 barrels per day," Lukman said.

He said he had no further details about the company's activities.

"The area has reserves of billions of cubic meters of natural gas, but only about 30 million of that has been used, and another 70 million cubic meters were burnt."

Lukman quoted several reliable sources as saying that large- scale natural gas exploration work would take place in the area beginning 2001.

He said the administration should anticipate opportunities for cooperative ventures with oil companies in order to obtain significant roles in the projects. Government participation would in return generate substantial funds for the city budget.

"The administration should give more attention to obtain its share in the projects to help finance development in the city."

Budget

Fauzie said the city administration had enjoyed a Rp 822 billion (US$122.7 million) surplus from the 1998/1999 budget.

About Rp 400 million of the surplus would be allocated for savings, while another part would be retained for the 1999/2000 city budget, he said.

"We need to save during the still fluctuating (social and political) situation."

He emphasized that savings would also be allocated to salaries of the administration's employees and for additional funds for the construction of the postponed Mass Rapid Transit project.

He said in the past such surpluses were usually used to finance all kinds of projects, many of which were wasteful and unnecessary, in order to balance the budget.

The 1998/1999 city budget figure for income generated was Rp 2.48 trillion, while its expenditure was recorded at Rp 1.65 trillion.(ind)