Governors criticize new oil, gas bill

The governors of oil and gas-rich provinces strongly criticized the new government-proposed oil and gas bill as being too insensitive to the regions' aspiration.

In a working meeting with the House of Representatives commission VIII on mining and energy in Jakarta on Tuesday, Riau Governor Saleh Djasit said that the bill would only provide the central government with excessive control over the regions' oil and gas resources.

Saleh also said that the draft law did not specify any revenue sharing mechanism between the central and regional government, which according to the new Autonomy Law, the region was entitled to 15 percent revenue from its oil resources, and 30 percent revenue from gas resources. "But the bill did not say any at all about this revenue sharing mechanism."

He further said, "According to the 1998 decision of the People's Consultative Assembly (or MPR, which is the country's highest legislative body) the region is entitled to manage its natural resources. We therefore demand that the bill to provide regions authority over the management and supervision of oil and gas sector, including in the area of licensing and contract."

Djasit and East Kalimantan Governor Suwarna Abdul Fatah also demand that oil and gas companies pay a 5 percent royalty from gross production to compensate for damages caused by industry's operation.

They also demanded that the regions be given exclusive rights 15 to 20 percent interest in every oil, gas venture in the region. (alex/godang)