Regencies demand role in oil executive body

Regencies demand role in oil executive body

JAKARTA (JP): Leaders of several oil rich regencies demanded
on Thursday that their representatives be included in the highest
oil and gas body that will be formed by the government under the
new oil and gas law.

Indramayu regent Irianto MS Syafiuddin and East Lampung regent
Irfan Djafar said the inclusion of representatives of oil-rich
regencies was necessary to secure the regencies' interests.

"We have the oil reserves. We want to be involved in
determining what is good and bad for our people," Irianto told
reporters on the sidelines of a meeting of the administrations of
oil-rich regencies and municipalities.

Under the oil and gas bill, an independent body called the
Executive Body will be formed to take over the supervision of the
country's oil and gas industry, a function that has been
exercised by Pertamina for the past three decades.

The bill, which is being deliberated by the House of
Representatives and is expected to be passed into law next month,
aims to liberalize the country's oil and gas sector, remove
Pertamina's decades-long monopoly on the sector and turn the
state company into a profit-making limited liability company.

The new law will replace Law No. 44/1960 on the oil and gas
industry and Law No. 8/1971 on Pertamina.

Irfan insisted that oil and gas producing regencies were fully
entitled to seek representation on the Executive Body.

"I think we have every right to be there," he said.

The oil-rich regencies planned to send a team to the House to
discuss the matter with legislators, he said.

Irianto said his Indramayu regency had about 143 oil wells,
and was also home to the giant Balongan refinery, which supplied
fuel to Jakarta and the northern part of West Java. The refinery
had a processing capacity of 125,000 barrels of crude oil per
day.

Meanwhile, Irfan said his East Lampung regency was home to
several oil fields, including the Widuri and Shinta offshore
fields, in the South East Sumatra block operated by Spanish-
Argentinean firm Repsol-YPF.

The regents also demanded that the central government be more
transparent about the oil and gas revenues shared between the
regencies and the central government.

So far, Irianto said, the regencies had yet to be properly
informed by the central government about the oil and gas revenue-
sharing formula, which created the suspicion that they weren't
receiving as big a share as they deserved.

He said, for example, that his regency would only receive
about Rp 12.9 billion (US$1.4 million) in oil and gas revenues
this year, as against the regency's own projection of Rp 21
billion.

He warned that any reduction in the regencies' revenue share
by the central government would amount to a violation of Law No
25/1999 on fiscal balance between the center and the regions,
which stipulated that the regional governments should receive 15
percent of oil revenues and 30 percent of gas revenues.(iwa)