New regulation criticized as lengthening bureaucratic chain in upstream sector
Friday, October 13 2017 - 02:09 AM WIB
Petromindo
The recently introduced Minister of Energy and Mineral Resources Regulation No 51/2017 on governance and management of properties belonging to the state in upstream oil and gas activities has been complained by oil and gas contractors as it lengthens the bureaucratic chain, Bisnis Indonesia reported on Friday.
The paper quoted Executive Director of the Indonesia Petroleum Association (IPA) Marjolijn Wajong as saying that the ministry will revise a number of items in the new regulation, which was introduced on August 9.
?IPA will continue discussion with the government so that the regulation can make the national oil and gas (upstream) activity achieve optimum efficiency level, instead of extending the bureaucratic chain with the addition of new stakeholder involved,? Marjolijn said.
According to the ministry, the new regulation aims to help ensure effective, efficient and integrated management of properties belonging to the state to increase cost recovery efficiency of goods used in upstream activities.
The new regulation among others details the procedure for oil and gas contractors in procuring the properties (outside land and building) such as capital goods for upstream operations including through import; the management of those properties; storing and maintenance; transfer to other or new contractors including those applying or switching to the new gross split production sharing contract; and supervision aspect.
The regulation, for instance, requires oil and gas contractors to submit report on their requirements for state properties (BMN) to the Center for the Management of State Properties for approval. This include plan for the import of the goods. The contractors are required to prioritize the use of existing properties, and will be allowed to purchase them, either in the domestic market or via import if the required properties are not yet available. (*)