Govt to follow up Court?s decision on BPMIGAS
Tuesday, November 13 2012 - 11:00 AM WIB
The government said it will comply with the decision by the Constitutional Court calling for the dissolution of upstream authority BPMIGAS, while vowing to protect a good investment climate in the oil and gas industry.
Minister of Energy and Mineral Resources Jero Wacik said the government would not immediately dissolve BPMIGAS as demanded by the Court. Instead, the government will take careful steps in implementing the Court?s ruling in order to maintain a good investment climate in the industry.
He noted that the oil and gas industry is a major source of revenue for the government.
When asked to comment on the suggestion of some people that BPMIGAS be merged with state owned oil and gas firm PT Pertamina, Jero said: ?All options will put into consideration in the best interest of the nation,? he was quoted by Kontan as saying.
The Constitutional Court ruled on Tuesday that all articles in Oil and Gas Law No. 22/2001 that call for the formation of BPMIGAS as the representative of the government in managing the national oil and gas industry have no binding legal basis as they run counter to the 1945 Constitution. The Constitution stipulates that earth and water with all the wealth therein are under the control of the government and should be utilized to create the maximum benefits to the Indonesian people.
The Court ruled that the formation of BPMIGAS has undermined the government?s authority over the oil and gas industry as the latter does not longer have a full freedom to regulate the industry and to award blocks to state owned companies due to the existence of BPMIGAS
The Court thus called on the dissolution of BPMIGAS and take over the functions of the agency on the temporary basis until after the government has finished the restructuring of the management of the national oil and gas industry.
Meanwhile, Coordinating Minister of the Economy Hatta Radjasa said the government is ready to implement the Court?s ruling.
He noted however that BPMIGAS was established 10 years ago in order to separate the function of operator and regulator in the oil and gas industry, both of which were held by PT Pertamina in the past. It was part of the effort to improve governance in the industry.
?The question now is who will supervise the industry (if BPMIGAS is dissolved). If Pertamina takes over the function, that means Pertamina will again function as regulator and operator,? he said.
Meanwhile, BPMIGAS? Chairman R. Priyono said the Court?s ruling will affect investment climate in the oil and gas industry as it is creating legal uncertainties.
?Investors need legal certainty. If BPMIGAS does no longer exist, who will handle the supervision?? Priyono said.
Separately, legislator Satya W. Yudha called on the Constitutional Court to explain about its controversial decision in order to bring call among the oil and gas investors.
?We don?t want the oil and gas contractors to be worried due to uncertainties because it will cause negative impacts on the national oil lifting,? he said.
Editing by Johannes Simbolon