Govt, House start deliberation of oil and gas bill
Tuesday, February 6 2001 - 04:30 AM WIB
Minister of Energy and Mineral Resources Purnomo Yusgiantoro officially presented the oil and gas bill to the House of Representatives in a plenary session on Monday.
The plenary session, which marked the start of the deliberation of the bill, was initially scheduled on Jan. 29 but it was delayed until Monday due to the House's busy schedule to debate other issues.
The plenary session was presided over legislator AM Fatwa.
Purnomo said in his speech during the plenary session that the bill was aimed at replacing the Oil and Gas Law No. 44/1960 and the Pertamina Law No. 8/1971, which were considered to have many weaknesses in addressing current and future challenges in the country's oil and gas industry.
For instance, he said, both laws have failed to encourage local firms to do business in overseas.
The laws have also created a monopolistic business environment, in which the state company controls the industry and is assigned with social mission.
The laws have also failed to promote Pertamina's independence, allow it to accumulate funds for its business and boost competitiveness in anticipation of the free market era.
Besides, he said, the laws set special rulings on tax and customs affairs, which are often difficult for the government to implement.
The laws also allow the government to strictly control the operation of oil and gas investors that the investors lacked freedom to manage their own operations, Purnomo added.
The new bill was trying to remove all the weaknesses and create a better environment in the country's oil and gas industry in anticipation of the free market competition, Purnomo said.
In the first place, Purnomo said, the bill stipulates the government will hold the mining right over the country's oil and gas reserve and will exercise the right through the so-called "Executive Body" for the maximum benefits of the Indonesian people.
The bill will lift all monopolistic practices in the oil and gas industry. All private companies may develop the country's oil and gas resources as contractors in cooperation with the Executive Body.
Private companies may do business in downstream sector, including crude refining, oil products transportation, storage and trading after receiving permits from the government.
The so-called "Regulating Body" will be established to regulate the sector.
The bill also specifies the shares to be accepted by the regions in the government's oil and gas revenue.
The bill also promotes the development of local oil and gas firms as well as the wider use of local service, goods and engineering products in the oil and gas industry.
The bill also set clearer rulings on the fuel subsidy and the guarantee of fuel supply to the public.
Next, the bill also seeks to promote investment in the oil and gas sector by among others promoting the availability of necessary data, professional human resources, research and development.
The bill also tries to guarantee legal certainties for oil and gas investment and to reduce the government's interference in the management of the oil and gas industry.
"This is expected to create a healthier and more competitive environment in the industry.
"For this purpose, the government will complete the governmental regulations on the implementation of the bill as soon as possible," Purnomo said in his speech.
He also said the bill seeks to prevent the increase in crimes in the oil and gas industry either in quality and quantity by proposing the formation of the body tasked with inspecting the oil and gas industry. (Godang/Epin)