New minister to repropose oil and gas bill

JAKARTA (JP): New Minister of Mines and Energy Susilo Bambang Yudhoyono promised on Friday to renew his predecessor's bid of introducing a new oil and gas law to revamp the country's oil and gas industry.

"One of the critical issues that should be handled is the repositioning of the oil and gas bill with the new House of Representatives after the bill was rejected by the former House," Yudhoyono told reporters after the ceremony to officially take over from former Minister of Mines and Energy Kuntoro Mangkusubroto.

The three-star general said he would put forward the bill, that had been proposed by Kuntoro but rejected by the former House, to the new House after making consultations with concerned parties, including the state oil and gas company Pertamina, over the clauses that remained debatable.

"We shall ask all parties to talk, including Pertamina," Yudhoyono was quoted by Antara as saying.

Kuntoro proposed a law that aimed at lifting the monopoly held by Pertamina in the downstream sector and strip the state company of its rights of awarding contracts to oil and gas investors and supervising and regulating the industry.

The government has granted the privileges to Pertamina under the law No. 8/1971 on Pertamina.

The bill was praised by foreign investors but met opposition from Pertamina, who gained supports from most of the members of the special committee formed by the House.

The House insisted Pertamina should be allowed to retain its privileges for a long transition period that it may develop into a strong oil and gas company.

After seven months of unfruitful lobbying, the House's members rejected the bill -- the first government-proposed bill rejected by the House at least over the 32-year rule of former President Soeharto.

The ministry and Pertamina accused each other of bribing the House's members.

Kuntoro and legislator Anthony Rahail said on Friday they welcome Yudhoyono's plan to press ahead with the new oil and gas bill.

Yudhoyono said he would press ahead with an anti-corruption campaign at the ministry, including in Pertamina, but he said he would not hastily judge that Pertamina's operation riddled with corruption.

"We have to make a careful study before making a judgment that this environment is riddled with KKN," said Yudhoyono.

KKN is a local acronym for corruption, collusion and nepotism.

Yudhoyono, who is the former chief of the Indonesian military (TNI) for territorial affairs, said he would also concentrate on solving the problems in the power sector and the rampant illegal mining activities.

Illegal mining activities have been on the rise over the past two years amid the economic crisis, causing concerns among foreign mining investors.

He noted that illegal mining activities were connected with the poverty around a mining operation. As such, any efforts to stop illegal mining activities should be coupled with programs to increase the local people's welfare.

Yudhoyono said he supported the membership of Indonesia in the Organization of Petroleum Exporting Countries, citing the effective role of the organization in influencing the oil prices. (jsk)