Govt appeases oil contractors over oil, gas law implementation

Oil and gas contractors will face no troubles due to the amendment of their contracts following the implementation of the new Oil and Gas Law, oil and gas director general Rachmat Soedibjo said on Thursday as reported by Bisnis Indonesia daily.

The contract amendment only changes the name of the signatory which represents the government, from Pertamina to the newly formed Implementing Body, said Rachmat. The body is better known by the acronym Balak.

?Their contracts with Pertamina will continue normally. What has been changed is only the role of Pertamina as regulator,? Rachmat told Bisnis Indonesia.

President Megawati Sukarnoputri this week signed a government decree on the formation of Balak which takes over from Pertamina the tasks of managing and controlling upstream activities that include exploration and production. The body has authority to sign oil and gas contracts, and is directly accountable to the President.

The President has decided to appoint Rachmat Balak chief, but his appointment requires approval from the House of Representatives as demanded by the oil and gas law.

There are currently 160 contracts either in the form of Oil Production Sharing Contract (PSC), Technical Assistance Contract (TAC) and Joint Operation Body (JOB).

Meanwhile, general chairman of TAC Communication Forum, Effendi Siradjuddin, said the government should also facilitate the development of Indonesian private oil and gas companies, and not only Pertamina. The company will operate as a limited liability company firm as stipulated by the new oil and gas law.

?The government, through the Implementing Body and Pertamina should keep its commitment to develop national private oil and gas firms,? Effendi told Bisnis Indonesia. (*)