Kuntoro about to throw in towel over oil bill

JAKARTA (JP): Minister of Mines and Energy Kuntoro Mangkusubroto said on Friday he was on the verge of giving up his four-month fight with the House of Representatives over the oil and gas bill.

"My hope for the bill to be enacted is fading," Kuntoro said after eleventh hour lobbying with the House's special team handling the bill.

"The deliberation seems to be going in circles."

The House and the government, which sponsored the bill, previously set a Monday deadline for approval by legislators.

"I am going home now uncertain whether there will be a meeting to discuss the bill. I will just wait for the House to extend an invitation." He said the chance of the bill being endorsed was slim.

Legislators have until Sept. 20 or Sept. 21 to decide on the fate of the bill, he said.

The sitting House completes its term later this month to make way for legislators elected in the June general election.

The government and the special team have been at loggerheads over who will hold the right to grant lucrative oil exploration contracts, currently held by state oil and gas company Pertamina.

The government said the right, in the form of extending business licenses, should be handed over to the Ministry of Mines and Energy. The House insisted that it should be retained by Pertamina.

Another moot point has been the fate of existing production sharing contracts held by foreign oil companies in the event the government took over the right.

Accusing House members of protecting the interests of Pertamina, Kuntoro said the deliberation was not likely to reach consensus.

"There can be no further negotiation. Only the government has the right to grant business licenses," Kuntoro said, adding that his offer was final.

In arguing for the right of Pertamina to grant contracts, the House said the government should not conduct business deals with oil and gas multinationals.

The government proposed converting contracts into business licenses to regulate oil exploration and exploitation activities, including the government's entitlements, taxes and compliance with environmental rules.

Kuntoro and legislators appeared to have reached an agreement last month when the bill was sent to the House's board of leaders for discussion after reaching a stalemate in the discussion between the ministry and the special team.

The board of leaders agreed with Kuntoro that the government should revoke Pertamina's right to grant contracts, which would be replaced by government-awarded business licenses.

Most members of the special team objected to the agreement, insisting the government should give Pertamina the right to award the oil and gas business licenses. (02)