Govt upbeat on foreign investment flow into downstream sector

The government is optimistic that many foreign investors will try to enter the country's oil and gas downstream sector after the government issues rulings to regulate that sector, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Thursday.

"Foreign players are awaiting the issuing of the regulations," Purnomo told reporters.

The government expects to complete by the end of this year the drafting of the regulations.

The regulations are meant to support the current oil and gas law, Law No. 22/2001, which allows foreign investments in the oil and gas downstream sector.

The oil and gas law also allows local players to enter the same sector which comprises four main areas: processing, transportation, storage and marketing.

Several foreign investors have planned to enter the downstream sector including Malaysia's state energy firm Petronas and China's PetroChina.

Petronas is now in intensive talks with its potential partners in Indonesia to build gas pipeline networks and fuel storages in the country. Meanwhile, PetroChina and Indonesia's oil and gas downstream authority BPH MIGAS have also met to discuss the former's plans.

The government had decided to allow private investors to do business in the country's oil and gas downstream sector beginning in 2006, and had anticipated foreign domination considering the huge capital required to enter the sector. (godang)