Muba waits for result of ITB study on oil production

The Musi Banyuasin (Muba) regency in Palembang is waiting for the result of the Bandung Institute of Technology (ITB) study on the level of oil and gas production in the regency before making any new proposal to the central government.

Although many regencies had openly demanded for at least 80 percent of the oil production in their respective areas, the Muba regency would prefer to settle the difference through negotiation table, according to Bupati regent Alex Nurdin.

"The most important thing is that the operation of oil companies such as Pertamina, Gulf and Exspan will not cause losses to the local people," he was quoted as saying by Sumatera Ekspres.

Under the existing regulation, a province receives 15 percent of its oil production, and the other 85 percent go to the central government. Of the 15 percent, six percent are given to a regency where the oil production is made, the other six percent to other regencies in the province. The remaining three percent go to the provincial administration.

Based on such production-split arrangement, Muba receives about Rp 272 billion from oil production a year.

According to the Muba regent, the share from the oil production should have been higher. "That?s why, we have invited ITB to assess the actual oil production so that we will have concrete data on oil split," he added.(*)