OIL & GAS BILL: House's Commission VIII uninformed about govt's takeover of oil and gas tendering

Although the government has announced the tendering of a number of oil fields to the public through the media and the tendering itself has been closed, the House of Representatives' Commission VIII chairman Irwan Prayitno claimed that he was not informed about the matter, Kompas daily reported on Thursday.

If the oil and gas block tendering by the government turned out to be true, Irwan said, the commission that deals with energy and mining would summons government officials to explain the tendering, that actually should remain the responsibility and authority of state oil and gas company Pertamina.

Irwan expressed his concerns that the government had taken over the authority to tender oil and gas fields from Pertamina, while the oil and gas bill that would govern the matter was still being deliberated in the House.

He explained there was no agreement yet between the government and the House over the authority to tender oil and gas fields and license contractors. The government wanted that the authority should lie with the central government, and the House basically did not object it, but wanted that the licenses should be issued after getting recommendation from local administrations.

Earlier, oil and gas expert Kurtubi and oil businessman Ramses O Hutapea blamed the government for violating Law No. 8/1971 by taking over the tendering and licensing of oil and gas fields from Pertamina, while the new oil and gas bill that would replace Law No. 8/1971 was still being deliberated in the House.

As long as the bill had not been passed into law, the government should stick to implement Law No. 8/1971 that grants Pertamina an exclusive rights over the tendering and licensing of oil and gas fields.

Therefore, Kurtubi and Ramses claimed that the recent tendering of nine oil and gas blocks had violated the prevailing regulations, especially Law No. 8/1971 on Pertamina.

The nine oil and gas blocks on offer to investors comprise of six deep water oil and gas blocks in Makassar Straits (Popodi, Donggala, Papalang, Taritip, Jangeru, and Tanjung Aru), two blocks in Java Sea (Bawean I and Bawean II), and one block in Natuna sea (Nila).

The tender was opened for investors on March 1, 2001 and was closed in June 2001. To supports the tendering, the government also sold geological data of the blocks through PT Patra Nusa Data to prospective bidders. Earlier any purchase of geological data should have been pursued through Pertamina and not PT Patra Nusa Data. It is not clear yet who owns Patra Nusa Data.

Soon, the government would announce the winners for the nine oil and gas blocks. Then the winners or the contractors would sign a draft agreement with Pertamina, that would later be submitted to the President for approval. After securing the President's approval, the actual contracts would be signed by the contractors, Pertamina and the minister of energy and mineral resources on behalf of the Indonesian government. (*)