Nine governors to join seminar on oil-gas revenue sharing

Nine governors from provinces in Sumatra will attend a seminar on the distribution of revenues between the central government and provincial administration from the country?s oil and gas production, Sriwijaya Pos reported on Monday.

Minister of Finance Budiono and Pertamina?s president director Baihaki Hakim will also take part in the seminar which will be held by the PALM environmental and society advisory agency in cooperation with Jambi administration at Novotel Hotel, Jambi on September 16.

The seminar which will among others discuss controversies related the amount of revenue from oil and gas production activities that must be paid to the local government will also joined by the head of the newly established Oil and Gas Implementation Agency, Rachmat Sudibjo.

According to the new oil and gas law, provincial administrations receive 15 percent from oil production and 30 percent from gas production in their territories .The portion given to provinces come from the government?s share from total oil and gas production in each area.

But oil and gas producing provinces said the distribution of the oil and gas revenues was not fair. Most of their oil and gas funds paid to them were much lower than that stipulated in the law.

Most of the oil production activities in the country are carried out by private oil companies under a production-sharing contract. The government, in most cases, receives 85 percent from the net oil production, and 65 percent from gas production. (*)