Oil and gas bill not siding to PSC: Gulf executive

It is not true that the oil and gas bill, currently being debated at the House of Representatives, is siding with foreign production sharing contractors (PSC), according to Gulf Indonesia Resources Senior Vice President Supramu Santosa.

According to Supramo there is no much different in the new oil and gas bill with the existing law No. 8/1971 on Pertamina except that the supervision of PSC will be transferred from Pertamina to a new institution to be established by the government.

"There is a developing discourse that the oil and gas bill is putting foreign investors at a special position. I personally don't think so. I think the bill will allow Pertamina to move around more freely than now," he said.

"Thus, Pertamina's position will not be shaken, it will remain a big company. I'm sure of that."

When asked about the contract system, Supramu said that he would prefer royalty system or contract of works system to PSC system.

In the royalty system, he said, contractors would be given freedom to pursue an efficient operation, without much intervention, and the government just collected royalties and other taxes. While in the PSC system, where PSC is treated just as a contractor to Pertamina or the government, there is too much intervention from the ruler over PSCs. (*)