Oil and gas contractors’ 25 percent obligation to domestic market must be reviewed: Rini

The government regulation requiring oil and gas production sharing contractors to allocate a maximum 25 percent of their oil or gas output to domestic market is not appropriate because demand for oil or gas is constantly on the rise, the Investor Daily Indonesia newspaper reported in its Tuesday edition.

This was the view expressed by out-going Minister of Trade and Industry Rini MS Soewandi on Monday in Jakarta.

“I've already suggested to President that there is a need to change the term maximum of 25 percent to minimum of 25 percent through an amendment of the Oil and Gas Law,” Rini said.

The contractor’s obligation was mentioned in the Law No. 22/2001 regarding oil and gas and the government regulation No. PP No.35/2004 regarding oil and gas upstream activities.

The main purpose of the law amendment is that there will be a more secured fuel stock in the domestic market, which in turn will help strengthen the country's industrial sector.

Meanwhile, former director of development of the state-owned oil and gas firm PT Pertamina Effendi Situmorang said that the clause regarding maximum of 25 percent is mentioned under clause 3 of the Article 46 in the government regulation.

According to Effendi, the clause is creating confusion. (*)