House members to give oil and gas bill hard look
House members to give oil and gas bill hard look
JAKARTA (JP): A leading legislator expressed optimism on Thursday that the House of Representatives would be able to pass the controversial oil and gas bill before the end of their terms in August.
"In my opinion, the debates will run smoothly, given that there is no big difference in opinions of House factions regarding the bill," the head of the House's special team for the deliberation of the bill, Erie Sukardja, said after a meeting with Minister of Mines and Energy Kuntoro Mangkusubroto.
Erie said House factions had discussed the bill for more than one month and would resume the debate from June 15 to July 29, after a long recess for the general election.
Current legislators will end their terms on August 31 after a long recess from August 2.
"In fact, we have enough time to debate the bill from June to July, but if we can't pass it into law on July 29 as scheduled, we can extend the debate through the recess period in August," Erie said, promising that legislators would seriously examine the bill "from dawn to dusk".
Several analysts have called on the House to cancel the debate of the bill to allow the new House members, to be elected during the June 7 general election, to do the job.
Observers said that debating the bill in extremely tight schedules will prompt legislators to overlook limitations in the bill, which has drawn public controversy especially regarding the proposed liberalization in the domestic fuel market.
Changes
In the meeting between the House special team and Kuntoro on Thursday, all House factions proposed changes in main clauses of the bill, including those regarding the right to award contracts, contract types and liberalization of the downstream sector.
Under the bill, the government will take over state oil and gas company Pertamina's rights to award oil and gas exploration and exploitation contracts to companies, and their right to manage and regulate oil and gas contractors.
All House factions said the government should focus on its role as a regulator and appoint a state company to represent it in dealing with contractors.
Currently, besides awarding contracts, Pertamina also operates as a partner of the oil and gas operator.
Regarding types of contract, all factions want the government to maintain the production sharing contract (PSC) system which is currently obligatory, arguing that the PSC system is beneficial to the country.
Under the PSC system -- introduced by Pertamina in the 1960s and subsequently copied by many developing countries -- Pertamina, on behalf of the government, has the right to manage oil and gas contractors and check the companies' cash flow.
The bill indicates that in the future oil and gas contractors may have types of contracts other than the PSC system.
Golkar spokesman Oedyanto Hadisoedarmo said, "Golkar is inclined to maintain the PSC system ... given that under the system the government controls the management.
"This is in line with the constitution and is not in conflict with a United Nations resolution which says natural resource exploitation by foreign contractors should be supervised by the host government."
The United Development Party (PPP) faction, through its spokesman Aslam Asyhari, said, "The PSC system ... must be maintained and must be explicitly stated in the oil and gas law".
Under the bill, the government will lift the decade-long monopoly held by state oil and gas Pertamina on the downstream sector, opening the sector to private companies.
The majority of factions had no reservations with liberalization of the downstream sector, but they said to quell public concern over a possible sharp increase in fuel prices, the bill should explicitly state that the government will maintain the fuel subsidy for a stipulated time. (jsk)