Megawati promises oil, gas firms better security

Moch. N. Kurniawan, The Jakarta Post, Jakarta

President Megawati Soekarnoputri vowed on Tuesday to improve the country's security situation in a bid to attract more investment in the country's oil and gas sector.

"I would like to state that it is my determination despite the constraints and limitations that my government is facing, to do my utmost to make Indonesia secure for investment," she told oil and gas firms at the opening ceremony of the 28th annual convention and exhibition of the Indonesian Petroleum Association (IPA).

The event was attended by several key ministers including Coordinating Minister for Political and Security Affairs Susilo Bambang Yudhoyono, Minister of Energy and Mineral Resources Purnomo Yusgiantoro and about 1,500 local and foreign participants.

Megawati said that a favorable security environment was important in order to maximize development in the country's oil and gas sector.

She noted that the oil and gas industry contributes greatly to the state budget and the development of the overall economy.

Over the past couple of years, Indonesia has been plagued by ethnic and religious conflicts as well as secessionist demands from certain provinces which have created jitters among investors. The launching of regional autonomy policy had also contributed to the deterioration in security conditions in various areas prompting local people in some cases to set up blockades of oil and gas facilities or steal company assets.

U.S. oil and gas giant ExxonMobil Corp., for instance, had to temporarily suspend its natural gas operations in Aceh last year amid intensifying conflict between the military and local rebels, who for many decades have been waging a low-level separatist war.

Fresh investment in the oil and gas sector reached US$1.64 billion between January and September of last year, far from the government's full year target of $5.4 billion.

Indonesia relies heavily on oil revenues to finance its state budget.

Megawati also called on investors to invest more in the oil and gas sector to take advantage of the country's new oil and gas law designed to liberalize the sector.

Vice chairman of ChevronTexaco Corporation Peter J. Robertson hailed the government's determination to restore the country's security conditions, saying it would create a more competitive investment climate in the country.

"It is encouraging to see that President Megawati and her Cabinet are determined to create the competitive investment climate that Indonesia so urgently needs," he said.