Many issues on oil bill still unsettled: Legislator

JAKARTA (JP): The House of Representatives could miss a Sept. 6 deadline in giving its final endorsement on a controversial oil and gas bill, a legislator has said.

Bahtiar Hamzah, a member of a special team assigned to hammer out the draft law, said here on Saturday that he was pessimistic that the bill could be tabled for final approval on Sept. 6 as scheduled because many thorny issues have not been settled.

"We have agreed on some important issues of the bill. But, due to the complexity of other substances, I really can't predict that the bill will be ready for the scheduled plenary session on Sept. 6," he told a seminar on the new oil and gas bill.

He said the bill was so complicated that controversies on certain issues still lingered over a highly publicized deliberation process that has been gone on for over three and a half months.

The government-sponsored bill, which will, among other things, remove the monopoly held by the state-owned oil and gas company, Pertamina, in managing the country's oil and gas sector, has attracted wide coverage from the local press.

Under the new bill, Pertamina's role to award contracts to oil and gas contractors will be lifted and transferred to the government. Pertamina's special status will be also removed and it will operate as any other limited-liability company.

Legislators are often charged with siding with Pertamina as they oppose most of the articles, which are not in favor of the state company.

Hamzah dismissed an allegation about legislators being bribed that they had strongly opposed some details of the liberalization program on the gas and oil sector proposed by the government through the bill, causing delays in the deliberation process.

He said the House and the government were close to reaching an agreement on the details of the particular clauses dealing with lifting Pertamina's monopoly in the downstream sector.

But they were still divided about the transition period to be given to Pertamina to fully comply with the new legislation.

"We ask the government to give Pertamina an up to five-year transition period not two years as proposed. It is important to enable Pertamina to improve its performance prior to the removal of its privileges," he said.

Minister of Mines and Energy Kuntoro Mangkusubroto said on Friday that legislators and the government had agreed to give Pertamina two years to become an independent company.

Kuntoro said that after two years becoming an independent company, the government would give preference to Pertamina to handle a certain working zone for a maximum of five years as a transition period.

If Pertamina failed to manage the zone, the license to operate the zone would be tendered by the government, he said.

Bahtiar said that the legislators also still opposed the clause which would allow fuel producers to set their own prices.

"We strongly opposed the government's proposal to liberalize the price mechanism. We're afraid the price will be totally out of control if we allowed producers to set their own prices," he said. (cst)