Kuntoro upbeat petroleum law approved by July 29
Kuntoro upbeat petroleum law approved by July 29
JAKARTA (JP): Mines and Energy Minister Kuntoro Mangkusubroto
and a chief legislator said on Tuesday they were optimistic the
House of Representatives would approve a controversial oil and
gas bill by July 29.
Kuntoro acknowledged that disagreements remained between the
House and the government on several issues, but said most of the
factions in the House supported the bill's objective of reforming
the country's oil and gas industry.
"The most important thing is that most of the factions in the
House agree with the government that we have to totally reform
the oil and gas industry," Kuntoro said on the sidelines of a
meeting to deliberate the bill.
The House resumed deliberations on the bill on Tuesday after
several weeks of recess for political campaigns and the general
election.
The head of the House's special team for the deliberation of
the bill, Erie Soekardja of the ruling Golkar Party, also
expressed optimism that the House would keep to schedule and
approve the bill on July 29.
"All factions are close to each other in their views on the
bill," Erie said, noting, however, that the team was ready to
extend the timeframe for deliberating the bill to early August in
case of a deadlock.
Some observers have called on the House to delay the
deliberation of the bill until new legislators elected in the
recent elections are installed.
They said the current legislators, who will end their terms in
August, could not carefully examine the bill due to time
constraints.
The bill seeks, among other things, to lift state oil and gas
company Pertamina's decades-old monopoly on the country's
downstream sector and open it up to foreign investment.
Under the bill, the government would also take over
Pertamina's rights to award contracts and regulate and manage the
country's oil and gas industry.
The bill also says oil and gas contractors would be able to
choose contracts other than the production sharing contract (PSC)
system.
All factions agree that the downstream sector should be
liberalized, but some legislators have demanded that the law
contain clauses that will secure the supplies of fuel to the
public at affordable prices.
Soekardja said the Golkar faction rejected the government's
plan to take over Pertamina's rights to award contracts and
regulate contractors.
He said Golkar believed the responsibility should remain with
a state company -- either Pertamina or another company to be
formed by the government -- rather than the government.
"The government should not sign any contracts because it's too
risky. Instead, the contracts should be made between two
companies," Erie said.
Kuntoro said the government would not soften its stance
regarding its intentions to end Pertamina's monopoly and take
over the company's rights to award contracts and regulate and
manage the country's oil and gas industry.
"There are no compromise as far these two things are
concerned. Pertamina should return the government's rights to the
government," Kuntoro said. (jsk)