BPMIGAS facing budget problem

The ministry of finance has yet to approve the 2003 budget plan of upstream oil and gas authority BPMIGAS, which amounts to Rp600 billion (US$=Rp8,440), Kontan weekly reported.

The weekly said that the agency?s activities had so far been financed with loans from state oil and gas firm Pertamina.

BPMIGAS was formed last July based on the current oil and gas law that became effective in 2001.

Kontan said BPMIGAS chairman Rachmat Sudibyo had last week sent a letter to Minister of Finance Boediono and Minister of Energy and Mineral Resources Purnomo Yusgiantoro to convey their request.

Last October, BPMIGAS submitted to the ministry of finance its 2003 budget of Rp600 billion, but so far no response has been given, the agency said.

Kontan said that the Rp600 billion was to come from the state budget and the so-called retention fee, which is a special compensation for BPMIGAS handling production sharing contractors -- the work done by Pertamina in the past.

Pre-tax retention fee for Pertamina was five percent of state budget?s oil and gas revenues.

This year?s state budget sets oil and gas revenues at around Rp56 trillion. (*)