Oil and Gas Regulatory Body has the right to impose sanction

The House of Representatives (DPR) have finally elected Tubagus Haryono, a member of the House?s Energy Commission as the chairman of the Oil and Gas Regulatory Body or Badan Pengatur which will act as an independent body to oversee the country?s oil and gas downstream operations including oil processing activities, transmission, distribution and retail sales of fuel in the country.

The election of Tubagus who defeated eight other candidates, however, still awaits the approval of the government.

The regulatory body which will soon start its activities as the follow-up of the new oil and gas law will have the right to impose a sanction to business players in the oil and gas downstream operations. But details of the agency?s job descriptions, however, remain unclear.

According to Director General of Oil and Gas at the Ministry of Energy and Mineral Resources, Iin Takhyan, said that the regulatory body will act as an independent commission to oversee the country?s oil and gas industries.

He said that the regulatory will have the right, for example, to issue "licenses" on the construction of pipelines and appoint companies which will responsible to manage and operation the pipelines. However, the right to issue "permits" to companies that will operate in the oil and gas downstream activities will be still held by the government through the Directorate General of Oil and gas.

"The right to determine whether or not a company is qualified or receive a permit to carry out business activities in the oil and gas downstream industry is still on the hand of the government not the regulatory body," he said.

Takhyan said that the detail job descriptions of the regulatory body will be explained in the government?s regulation which will formalize the operation of the agency. (*)