Land problem hampers oil and gas operations

Difficulties in land acquisition have become a major non-technical problem hampering oil and gas exploration and production activities in the country, according to upstream authority BPMIGAS

BPMIGAS Chief R. Priyono said in Jakarta on Tuesday that the problems related to land acquisition should be resolved so that they would no longer affect the government?s efforts to increase oil and gas production target.

Under the Law on Oil and Gas No. 22/2001, land owners should allow their land to be used for oil and gas exploration and production activities. But the law, however, needs more detailed implementation rules because many land owners refuse to let their land be acquired.

?Many land owners also ask for unrealistic compensation for their land,? he added.

Priyono hoped that the newly approved Law No 2/2012 on land acquisition for development of public facilities would be able to solve the problems because the new law which was scheduled for implementation this year contained more details in many aspects of land acquisition.

Under the new law, landowners should allow their land be used for government-commissioned projects for public interests such as oil and gas exploration and production activities, which however has be through a democratic process.

Meanwhile, Deputy Chairman of BPMIGAS, Widjonarko, said the size of land which had been acquired for oil and gas operations reached 404,000 hectares worth Rp 2 trillion. The land is the government?s assets even if production sharing contractors failed to find oil and gas in the areas, he added.

Editing by Benget Besalicto Tnb.