Pertamina plans more deregulation in oil mart

Pertamina plans more deregulation in oil mart

JAKARTA (JP): The president of state-owned oil company Pertamina, Faisal Abda'oe, proposed yesterday that the government issue a new deregulatory measure in the oil and gas sector.

"The planned deregulation would include a revision of Law No. 8/1971 about Pertamina and new incentives for oil and gas investors," Abda'oe said after speaking at a seminar on oil and gas.

The current law gives Pertamina a monopoly on the processing, distribution and marketing of oil and gas in the country.

He said the deregulation would allow private investors, both foreign and domestic, to conduct certain businesses in the oil and gas sector, which are currently handled only by Pertamina.

Abda'oe said any measure would likely include tax guidelines on the consolidation of exploration and production activities undertaken by oil companies.

"The government is now discussing such tax consolidation," he said.

Meanwhile, Pertamina's director of processing, G.J. Atihuta, proposed that the government establish a new legal and regulatory framework to allow private sector companies to invest in the refining industry and marketing of oil products.

Abda'oe said that such deregulation is a must for Indonesia in view of increasing competition, especially in the Asia-Pacific region, to attract foreign investments.

However, Director General of Oil and Gas Suyitno Patmosukismo said recently that the government was against the tax consolidation idea, which, it believes, would reduce the government's earnings from the oil and gas sector.

Suyitno added that he was not sure if tax consolidation would help promote investment in oil exploration. "I'm not sure if even the biggest oil producer in the country would boost its investment in oil exploration," he said in reference to Caltex.

Minister of Mines and Energy I.B. Sudjana also said recently that the government would not give more incentives to invest in the oil and gas sector.(04)