Improve oil, gas industry governance, BP Migas Chief says
Monday, October 3 2011 - 09:11 AM WIB
Priyono said Monday the reform was needed to build the institution and ascertain jobs and responsibilities of each stakeholder.
Priyono said investors had often complained about overlapping jobs among government institutions and uncertainty in oil and gas governance.
"The improvement is unevitable so that we can generate better output," Priyono told a hearing with the House of Representatives.
Chairman of the oil and gas downstream regulator (BPH) Migas Tubagus Haryono supported the argument. ?Make clear division of labor between the Oil and Gas Directorate General and BPH Migas," Haryono said.
Priyono proposed that the authority to determine oil and gas working fields be given to the President so that all government institutions under the President would support realization of activities at the working fields.
BPMIGAS can prepare terms and conditions for cooperation contracts and offer upstream business activities within working fields, given BPMigas role as contract signatory. He added that revision should increase revenue and regional participation. One of the revision plan is to authorize regions the right to first tranche Petroleum or signature bonus in accordance with the law.
?The effort is meant to avoid misunderstanding and operational hassles, particularly in regions," said Priyono.
Other proposals include priority for state oil and gas companies to explore and exploit new working fields or expired concessions. New forms of special rights should also include first right in the tender for working fields and priority to manage soon to expire working fields, and privilege as partner of SOEs in awarding participating interest.
The final proposal is meant to protect the regions' right so that all opportunities would not go to the private sector only due to lack of capital. (bernard)