House finalizes debate on new oil, gas bill

The House of Representatives has completed the debate on the country?s new oil and gas bill, according to Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

Purnomo said Tuesday that the House was expected to give its final approval at a plenary session sometime in the middle of next.

The new oil and gas bill will liberalize the industry and end the monopoly status of state-owned oil and gas firm Pertamina.

Under the new law, the government would set up an executive body which would take over the role of Pertamina in dealing with foreign oil and gas contractor.

The government would also set up a regulating body which would take over the role of Pertamina in supplying and distribution of fuel products throughout the country.

Purnomo said that the House and the government had also reached agreement on a transitional period to transform Pertamina into a limited liability company with profit orientation.

He said that the law gives Pertamina a two-year transitional period for the corporate transformation, and four years to release its regulating function.

Meanwhile, director general of oil and gas Rachmat Sudibyo said that under the new system, the so-called production sharing contract would still be maintained, but there would be a new contract system which would benefit more the state.

He pointed out as example that when a contract on certain oil block has been expired, the new contract must be based on the new system under which the foreign oil and gas contractor would only be given a certain amount of fee.(Godang)