Govt discusses new upstream oil and gas regulation

The government is currently discussing the new draft regulation on the upstream oil and gas sector in order to allow for an effective control, Investor Daily reported Monday.

This new regulation will replace the existing Government Regulation No. 35/2004 regarding upstream oil and gas activities, which lacks details.

Director of upstream oil and gas business development at the Directorate General of Oil and Gas R. Priyono said several important aspects like the government?s control through the Ministry of Energy and Mineral Resources of the oil and gas production are now under discussion.

?So, the time limit for exploration will also be set (by the government). If nothing has been done on the area of work by the contractor during the time limit, there will be some kind of penalty,? he said.

Prior to the submission (of the draft bill) to President Susilo Bambang Yudhoyono, Priyono said, the new draft bill will be put forward for public scrutiny. The draft bill is expected to be submitted to the President in January.

Meanwhile, director general of oil and gas Luluk Sumiarso said that after the issuance of new regulation, the government will form a consortium for the purpose of issuing certificates regarding oil and gas reserves. Several agencies like the Oil and Gas Institute (Lemigas), Petroleum Experts Association (IATMI) and Indonesian Geological Experts Association (IAGI) will become members of the consortium.

This (consortium) will become a competent agency to issue certificates and so far the certification had been done by the Lemigas and otherwise, by the government itself,? Luluk said. (*)