Habibie backs Kuntoro on Pertamina

Habibie backs Kuntoro on Pertamina

JAKARTA (JP): President B.J. Habibie put his weight behind
Minister of Mines and Energy Kuntoro Mangkusubroto over the
weekend, and supported the minister's plan to take over contract-
awarding rights from state oil and gas company Pertamina.

Kuntoro said the President had turned down a proposal from
Pertamina, backed by legislators, that Pertamina, or a new state
company to be formed by the government, be responsible for the
awarding of contracts.

"The President has stated there is no need to form a new state
company to take over the government's (contract-awarding) right
from Pertamina.

"The right should be returned to the government. The
government has the infrastructure and budget needed to exercise
the right," he said after a meeting with the President.

Habibie summoned Kuntoro, Minister of Finance Bambang
Subianto, Minister of Industry and Trade Rahardi Ramelan, State
Minister of the Empowerment of State Enterprises Tanri Abeng and
Minister of Communications Giri Suseno Hadihardjono to discuss
the latest developments in the deliberation of the oil and gas
bill at the House of Representatives.

Pertamina president Martiono Hadianto was also present at the
meeting.

The oil and gas bill currently being debated at the House
would lift Pertamina's decades-old monopoly on the country's oil
and gas downstream sector.

Under the bill, the government would also take over
Pertamina's right to award contracts to oil and gas contractors,
as well as its right to manage and regulate the contractors.

The state delegated the mining rights to Pertamina under the
1971 law on Pertamina.

Under the bill, Pertamina would also be transformed into a
limited liability company two years after the enactment of the
law.

After weeks of debating and lobbying, the House's special team
for the deliberation of the bill has agreed with Kuntoro on most
items in the bill, except for the contract-awarding right
transfer.

Most of the special team's members supported Pertamina's
proposal that the contract-awarding right should not be held by
the government but Pertamina or a new state company.

The legislators said the government should not make business
deals with private companies, to avoid being sued by the
companies.

But Kuntoro insisted that the right be returned to the
government, saying he would not compromise on the matter.

"The President expressed his view to show the government has
one single perception on the issue. We hope the House could
listen to that and several factions who remain opposed (to the
bill's clause on the contract-awarding right) could understand,"
Kuntoro said.

Several analysts have predicted that the deliberation of the
bill will be deadlocked on the issue.

But Kuntoro said the deliberation would not be deadlocked.

"There is only one strategic issue that has yet to be agreed
upon, that is the contract-awarding right issue. God willing, we
will come to the end of the deliberation soon," he said.

Kuntoro also said that if the bill was passed into law,
Pertamina would be assigned to only finding and extracting oil,
while oil transportation would be handled by the Ministry of
Communications and the Ministry of Industry and Trade would
manage the oil and gas refining process. (prb/gis)