Foreign oil firm agrees to new revenue distribution policy

By A. Junaidi

JAKARTA (JP): An Argentina-based oil mining company operating on Pabelokan Island in the Pulau Seribu (Thousand Islands) marine resort area said it would support and comply with the city administration's policy on share distribution of oil revenue.

"We agree with the 1999 Law on Fiscal Balance between the central government and local administrations. We'll also comply with bylaws regulating the share distribution of our oil revenue," the logistics manager of YPF-Maxus, M. Syuhul, said at a recent meeting with city councilors at the island.

He said, however, that the company could not identify the oil wells located under the city administration's supervision, since Maxus currently operates 400 oil wells on 63 platforms in 11- hectares of offshore area stretching from the waters off Lampung, South Sumatra, to Jakarta.

According to Syuhul, the firm signed a 30-year production sharing contract with the government in 1968. The contract, which ended last year, was extended for another 20 years.

He said the firm, which started oil production in 1971, currently produced 120,000 barrels of crude oil a day, making it the second largest foreign oil firm in the country after U.S.- based PT Caltex Pacific Indonesia, which operates in Riau.

Maxus currently receives 15 percent of the company's net profit, while the remaining 85 percent is allocated to the Indonesian government, he said.

"I think the city administration should get a share from the government's portion of the profit," he said.

Head of Commission D for development and environmental affairs, Ali Wongso H. Sinaga, called on the government to issue a decree soon regulating the share distribution between the central government and regional administrations.

"It would be better if the central government could issue the decree this year or next at the latest," he said.

He said the Law on Fiscal Balance enacted last May between the central government and local administrations, rules that the local administration would receive 15 percent of oil revenue, while the central government receives the remaining 85 percent.

Sinaga suggested that the city administration should cooperate with the National Survey and Mapping Agency to establish a map of the oil wells.

He said the city administration had not paid serious attention to the matter since everything was handled by the central government.

"In the future, the city administration should also get involved in controlling oil production," he said.

Indonesian Democratic Party (PDI) councilor, Lukman F. Mokoginta, said the city could enjoy revenues from gas exploration since the area had a gas reserve of an estimated 300 billion metric cubic feet.

Lukman said a city bylaw regulated local administration would get 30 percent of the gas revenue.

"A share in gas revenue will significantly increase the city's income in the future," he said.

He said the city so far only charged Pabelokan Island with property tax, building permit tax and water well tax.

The 1998/1999 city budget for income generated was Rp 2.48 trillion with expenditures reaching Rp 1.65 trillion.