Habibie supports Pertamina privileges

JAKARTA (JP): President B.J. Habibie has agreed with the House of Representatives to maintain the decades-long privileges of state oil and gas company Pertamina in the oil and gas sector, a legislator said on Monday.

Ashlam Asyari of the United Development Party (PPP) faction said the President and the House's board of leaders forged the agreement in a meeting held last Thursday at the President's residence. The meeting was held in an effort to break a stalemate in the four-month deliberation of the oil and gas bill.

Ashlam said the meeting was attended by Minister of Mines and Energy Kuntoro Mangkusubroto, Pertamina president Martiono Hadianto, Indonesian Military (TNI) chief Gen. Wiranto and Minister/State Secretary Muladi.

"If Kuntoro does not follow the agreement, he can be accused of being disloyal to his superior," Ashlam warned.

However, Kuntoro denied Habibie had agreed with the House to maintain Pertamina's oil and gas privileges.

"No agreement was reached during the meeting. We only heard the President's perception on the oil and gas bill.

"The House may have its own interpretation (of the President's perception), but I have a different interpretation," Kuntoro said after meeting with representatives of the House's four factions.

Kuntoro and the legislators held the meeting to see if they were ready to resume debates on the oil and gas bill after months of deadlock.

Kuntoro however declined to clarify his interpretation of the President's perception.

According to the statement which summarized the results of the meeting at Habibie's house, copies of which were distributed by Ashlam to reporters, both the President and House leaders agreed that Pertamina must maintain its right to award oil and gas contracts and Pertamina must be developed into a strong state company.

They also agreed to maintain the current production sharing contract (PSC) system in the country's oil and gas industry.

"We, the Republic of Indonesia, should not take a wrong step in introducing a policy, because if the step is wrong, the multinational companies will directly access the downstream and upstream sector," the meeting's concluding statement read.

The statement outlining the conclusion of the meeting was only signed by head of the Indonesian Democratic Party (PDI) faction Budi Hardjono.

The meeting's conclusion was in substantial conflict with principles outlined in the bill proposed by Kuntoro.

Kuntoro had urged that Pertamina should be comprehensively stripped of its decade-long exclusive rights, including the contract-awarding right, to allow it to compete with multinational companies on a level playing field.

Kuntoro had also demanded that foreign oil and gas contractors be allowed to operate under contract systems other than the current PSC system.

After months of deadlock, the PPP faction sent last Monday an official letter to Kuntoro, saying it was impossible to continue debates on the bill given the wide gap between the perceptions of the government and House members.

However, emboldened by Habibie's alleged support, the legislators asked on Monday for Kuntoro to continue the debate.

But Kuntoro said he would not continue the debate unless the PPP faction revoked its letter.

"PPP should first revoke its letter, because it could become a thorn in future debates," he said.

Ashlam insisted PPP would not revoke the letter.

Kuntoro and House members planned to meet today (Tuesday) to decide if they would resume the debate.

Sitting House members will end their term at the end of this month. (jsk)