Oil producing regions to boycott meeting with Finance Minister

Oil producing regions grouped in the Consultation Forum of Oil Producing Regions (FKDPM) will boycott an invitation from Ministry of Finance to jointly calculate oil dividend that must go to each of the group?s members, saying that the invitation is unrealistic, Kompas daily reported on Friday.

The chairman of the forum, Irianto, who is also the regent of Indramayu, accused that the meeting which would discuss the estimated oil dividend that must go to each producing areas for the first quarter of this year would only be intended to break the solidarity among the forum members.

"The meeting will be held in stages from June 24 to July 1. This indicates that the ministry wants to break the solidarity of the forum?s members," he said, adding that the group has also asked the minister to cancel the meeting until it holds its national meeting.

In addition, the forum would also demand the finance minister to revoke his decision on the amount of oil and gas dividend that must go to provincial or regency administrations issued early this year. The decision only benefits the central government.

According to the new oil and gas law, provincial administrations receive 15 percent from oil production and 30 percent from gas production in their territories .The portion given to provinces come from the government?s share from total oil and gas production in each area.

Most of the oil production activities in the country are carried out by private oil companies under a production-sharing contract. The government generally receives 85 percent from oil output, and 65 percent from gas production. (*)