Oil, gas investors call on govt not to transfer all assets to Pertamina

Oil and gas investors called on the government not to transfer all of its downstream assets to the state-owned oil and gas firm Pertamina as such a move would make competition in the retail and distribution sector much harder.

PT Caltex Pacific Indonesia (CPI) senior vice president Wahyudin Yudiana was quoted by the Koran Tempo daily as saying Tuesday that private-owned oil and gas firms would face difficulties to compete in the downstream sector with Pertamina if ?all (assets) are controlled by Pertamina.?

According to the new oil and gas law No. 22/2001, Pertamina would no longer become a regulator, but a pure business player. Consequently, the government plans to transfer assets in the downstream activities which include processing facility, transportation, storage, and distribution. These assets are currently being managed by Pertamina.

The new oil and gas law is aimed at liberalizing the country?s oil and gas industry including opening up the retail or downstream sector to private investors.

Previously, vice chairman of the board of Chevron Texaco Corp. Peter J. Robertson said that Caltex had interest to enter the domestic downstream sector because the company had been running such business for a long time. Caltex has one such operation in Singapore.

But he was quick to say that Caltex would only make a move if the prospect is promising for the company.

Elsewhere, Wahyudin said that the domestic market obligation (DMO) stipulated in the oil and gas law was a burden to oil and gas investors. DMO required gas investors to market 25 percent of their gas find here in the domestic market.

He said that gas distribution in the domestic market was difficult because it means developing expensive infrastructure.(*)