House prepares discussion on oil and gas bill

The House of Representatives has made preparations for the deliberations of the oil and gas bill submitted by the government last year.

Irwan Prayitno, head of the House's Commission VIII, which oversees among others mines and energy affairs, told Petromindo that the deliberations would start on Jan. 29 with Minister of Energy and Mineral Resources Purnomo Yusgiantoro, on behalf of the government, officially presenting the bill in a plenary session attended by all factions of the House.

The House names the process as "deliberation stage I".

It will be followed by a plenary session on Feb. 5 to be attended by the minister, where all factions at the House would present their respective general opinions on the bill.

The minister would make official comments on the opinions of the House's factions in a plenary session attended by all House factions, scheduled for Feb. 12, Irwan said on Tuesday.

The process, where the House factions deliver their general opinions on the bill and the minister makes comments on the opinions, is called "deliberation stage II".

This will be followed by the so-called "deliberation stage III", during which the House's special team and the ministry's team will hold lengthy discussion on each clauses of the bill. This could last for several months.

The deliberation will end with the stage IV, in which all House factions will give conclusive statements whether they approve or reject the bill.

Observers anticipated a tough discussion for the bill given the fact that the previous government of former President BJ Habibie failed to gain the former House's approval for its proposed bill in 1999.

The observers said the new bill has a lot of similarities with the rejected one in its goal of deregulating the country's oil and gas industry and lifting the decades-long monopoly held state oil and gas company Pertamina.

The bill will replace the Pertamina Law No. 8, 1971, which gives Pertamina the authority to exercise the government's rights over the country's oil and industry.

Irwan said the House has accepted several comments from various parties, including Pertamina, the so-called Group of 20, comprising former Pertamina and governmental officials and local experts, foreign investors including PT Caltex Pacific Indonesia and Beyond Petroleum (BP).

The Group of 20 is one of the groups, which strongly lobbied against the bill proposed by the former BJ Habibie administration.

Irwan said Pertamina, supported by Group of 20, still wanted to hold its exclusive rights, while the government, backed up by foreign investors, wanted to impose a system which is transparent and follow the global standards on the country's oil and gas industry.

Deputy head of the House's Commission VIII Emir Moeis, who is tipped to head the House's special team for the deliberations of the oil and gas bill, told Petromindo on Thursday that there were several points in the bill, which the House was likely to seek to change.

But, he assured that the changes demanded by the legislators would not cause controversies.

"The House will seek to put some principal additions to the bill. But they (the additions) won't cause controversies," he said.

Several topics which will raise debates include those concerning the period of oil and gas contracts, the contract system and the formation of the so-called Executive Body, which will supervise the oil and gas industry on behalf of the government.

The legislators may also demand that the bill contain more detailed clauses.

"The bill is too general. We want to move one step ahead. We don't want the bill to contain only general principles with the details to be stipulated in the governmental regulations. You know that the House is not involved (in the making of) the governmental regulations. We want the future law to specify whether (we are going to implement) the production sharing contract (PSC) system or others," Emir said. (Epin)