Government not transparent in oil and gas production split: Expert

The central government is still not transparent in the split of oil and gas production with producing areas although the autonomy law has clearly stated that the producing province receives 15 percent of the production, Kompas reported on Thursday.

?The central government?s attitude has often caused a controversy particularly among oil and gas producing provinces. It has also raised a question if the central government has a true commitment to empower the provincial economy,? said senior economist at the University of Indonesia, Made Astana, in his speech at the national meeting of the association of oil and gas producing provinces in Jakarta on Wednesday.

The controversy came into the spotlight because the producing province did not receive their share in the form of oil or gas but in the form of cash from the sales of the oil, he said. The controversy often got worsen because the oil and gas producing provinces were not informed about the formula in calculating the funds resulted from the sales of the gas or oil, he said.

He cited that Indramayu regency, one of major oil producing area in West Java received about Rp 12 billion from the share of the oil production 2001. After a strong protest, the central government raised the regency?s share to Rp 28 billion in the following year although there was no major change in the production level and oil prices, he added.

According to him, almost all oil and gas producing also shared the same experience but could do nothing due to the lack of the transparency in the part of the central government.

The autonomy law stipulates that 85 percent of net oil production (after being deducted from oil contractors? share of 15 percent from total production) goes to the central government and another 15 to the local government. (*)