Oil and gas contractors still have to operate according to old law

Oil and gas contractors which had got new blocks under the old law on oil and gas will continue to operate according to it until the new law has come into full force, according to oil and gas director general Rachmat Sudibyo.

?The government will still use the old law when it deals with production sharing contractors which had already got, or had just got, new blocks which they will work on.

?At least, in the transition period the contractors still have to follow the old law, which means Pertamina will remain in charge,? Sudibyo told reporters at his office on Friday.

The old law, issued in 1971, gave Pertamina supervisory roles which it must relinquish after the new law has gone into effect.

Meanwhile, the President has yet to ratify the new oil and gas law which was approved by the House of Representatives (DPRD) on Tuesday. But, it remains unclear when it will happen.

The new law, aiming to liberalize Indonesia?s oil and gas sector from the monopoly of state oil and gas company Pertamina, stipulates the transition of that company into a limited liability company; the establishment of an executive body which will take over from Pertamina as supervisor of the country?s oil and gas industry; and the formation of an oil and gas regulatory body.

The two bodies must be established within one year after the enactment of the law, while Pertamina must become a limited liability company within two years, according to the law. (godang/Leo)