Government to submit new bill on oil and gas
Government to submit new bill on oil and gas
JAKARTA (JP): The government is preparing a new bill on oil and natural gas to anticipate global competition and privatization in the petroleum sector, Minister of Mines and Energy I.B. Sudjana said yesterday.
"The bill will be submitted to the state secretary later this year, before it is proposed to the House of Representatives," Sudjana told reporters after opening the seminar on oil held by Trisakti University in connection with its 30th anniversary.
Sudjana said the bill, which will replace Law No.8/1971 on Pertamina, the state-owned oil company, will allow for more private investment in the oil sector, especially in oil refining, currently the monopoly of Pertamina.
"The government has no funds to develop new oil refineries, which require big investments. One refinery with a daily capacity of 125,000 barrels could require an investment of up to about US$2 billion," he said.
Indonesia must now depend partly on imported fuel oil, he added, because Pertamina's refining capacity of 998,000 barrels a day is equal to the country's rapidly growing demand.
Therefore, Sudjana added, the government has been inviting private investors to participate in the refinery sector.
The government has so far licensed seven private companies to operate oil refineries: PT Indo-Xo, which will build a refinery with an investment of $2 billion in Sorong, Irian Jaya; PT Sabang Oil Refinery Corporation in Sabang, Aceh, with an investment of $1.58 billion; PT Tanjung Uban Refinery in Riau, with an investment of $1.5 billion; PT Asia Pasific Petroleum Indonesia in Situbondo, East Java, with an investment of $1.09 billion; PT Buana Ganda Perkasa in Probolinggo, East Java, with an investment of $3.5 billion; PT Indo Moody Oil Comp. in Pare-Pare, South Sulawesi, with an investment of $1.32 billion; and PT Norco Internusa in Gresik, East Java, with an investment of $1.8 billion.
"Although the Cilacap refinery damage will not affect the domestic fuel oil supply, new refineries are needed," the minister said.
Sudjana said that, under the new bill, private investors will be allowed to sell their products domestically.
Asked about crude oil supplies for new refineries, Sudjana said that Saudi Arabia has made a commitment to supply Indonesia with one million barrels of crude oil per day. (04)