House acts for Pertamina, not people: Expert

JAKARTA (JP): Many members of the House of Representatives (DPR) who foiled the passage of the government-sponsored oil and gas bill this week were acting on behalf of state oil company Pertamina, a noted oil and gas analyst said on Friday.

"They did not speak on behalf of the people but of Pertamina," Sumarno Dipodisastro, a former aide to Pertamina's chief executive officer, told reporters.

Sumarno said there were strong indications that House members were bent on slowing down the deliberation or on preventing the passage of the bill so that Pertamina could retain its privileges in awarding lucrative oil and gas contracts.

After going through a lengthy and heated deliberation, House Commission V for industry, mines and energy approved the draft of the bill.

The House was originally expected to endorse the bill on Monday, but some legislators foiled the plan by demanding a new deliberation on six items in the bill. The House is now scheduled to give a final reading of the bill on Sept. 6.

Fresh objections were raised particularly about the way oil and gas contracts would be awarded in the future and the seven- year transition period given to Pertamina before it loses its monopoly privileges and will have to compete with multinationals.

The Ministry of Mines and Energy, which drafted the bill, has faced strong opposition from Pertamina over its proposal that the right to award contracts be taken over from the state oil monopoly to the ministry.

Pertamina, which awards production-sharing contracts to foreign oil companies, will in the future have to compete for bids against giant multinationals.

Some legislators have strongly argued that Pertamina's privileges must be retained.

Minister Kuntoro Mangkusubroto told Antara that the government would not change its position on the present draft in spite of the new deliberation.

Sumarno, now an aide to Kuntoro in the latter's position as Pertamina's chief commissioner, noted that legislators were not as rigorous in pursuing the report of US$6.1 billion graft in the oil company as they were with the $80 million scandal at Bank Bali.

"They (legislators) did not follow up the PricewaterhouseCoopers' report (of graft at Pertamina). But with Bank Bali, which involves a much lesser amount, they are pursuing the matter. What is going on?" he said.

Sumarno said that for Pertamina to become a world-class company, it must be run on strict business practices. It must cease its role as a milch cow for the ruling elite. (02)