Regents continue to oppose oil and gas law, creates uncertainty in industry

Regents continue to oppose oil and gas law, creates uncertainty in industry

Adianto P.Simamora, The Jakarta Post, Jakarta

Uncertainty continues to plague the oil and gas industry as
the country's regions persist in rejecting the new oil and gas
bill, which was recently approved by the House of
Representatives.

Meanwhile, the central government is determined to soon put
the new arrangements into effect.

East Lampung Regent Irfan Nuranda, who is also the secretary
of the Consultative Forum for Oil Producing Regencies, insisted
on Wednesday that the bill should be reviewed so as to better
accommodate the regencies' wishes before the government moved to
put it into effect.

Irfan said he had been informed that President Megawati
Soekarnoputri would sign the bill into law on Nov.23.

"We (the regency forum) have agreed to ask the President to
delay signing the law and to review it so as to accommodate the
regencies' demands," Irfan told The Jakarta Post on the sidelines
of a seminar on oil and gas organized by Petromindo.Com

But, Rachmat Soedibyo, the director general of oil and gas at
the Ministry of Energy and Mineral Resources, said there were no
indications that the government would delay signing the bill into
law.

"It's not necessary to review the bill because we had no
intention of enacting a "super" law that would be capable of
accommodating every demand."

"We (the government) are now at the stage of discussing the
executory government regulations (on the implementation of the
law). All parties, including the forum, are invited to provide
input," he said, adding that the government regulations were
expected to better accommodate the regencies' demands.

The new oil and gas bill, which will replaces the Oil and Gas
Law No. 44/1960 and Pertamina Law No.8/1971 upon receiving
presidential approval, is aimed at liberalizing the country's oil
and gas sector through the abolition of Pertamina's decades-long
monopoly over the industry.

Under the new bill, the government will establish an
independent agency to be called the Implementing Board, which
will comprise experts and professionals, to replace Pertamina in
regulating and managing the country's oil and gas industries.

The forum has been demanding that it have representatives on
the board, but this has been rejected by the House.

The forum has also complained about the distribution of oil
and gas revenue by the central government, which it said "lacked
transparency".

The provincial assembly of resource-rich Riau province on
Monday also rejected the oil and gas bill, saying that the bill
still gave a dominant role to the central government and provided
no justice for local people.

Also speaking at the seminar, John S.Karamoy, the chairman of
Medco Energi International, said oil and gas investors were no
longer interested in talking about the new bill as it had already
been approved by the House.

"For investors, the discussions about the oil and gas bill are
now over. We are now paying attention to the new government
regulations," he told the Post.

Karamoy said that the government had asked for input from
investors in drafting the government regulations, and investors
appreciated this move.

"We hope that under the new regulations, the government will
cease its excessive involvement in investors' day-to-day
operations," he said.