Part of Pertamina?s downstream businesses to be offered to investors

The government will soon offer part of Pertamina?s oil and gas processing and distribution facilities to investors as part of the implementation of the new oil and gas law which, among others, opens up the country?s oil and gas downstream industry to new business players, Koran Tempo reported on Monday.

Tubagus Haryono, the chairman of the newly established regulatory body on oil and gas downstream activities or Badan Pengatur Kegitan Bisnis Hilir Migas, said in Jakarta last week that the opening of the oil and gas downstream industry would, for the initial stage, be limited on the offering of Pertamina?s under-capacity oil and gas processing and distribution facilities to new players.

He said that his office was still preparing the mechanism on how the new investors can take the advantage of this opportunity. ?Basically, Pertamina should be willing to offer its low capacity facilities to new business players event if they would become its competitors,? he added.

He did not unveil what kinds of facilities, which would be offered to investors. But he said that the entry of new business players in the operation of such facilities should be based on normal business principles. ?Pertamina, for example, can receive fee from this business,? he said.

The government introduced last year a new oil and gas law which among others open up the oil and gas processing and fuel retails to new investors. Up to now, Pertamina still holds the monopoly in the distribution and sales of fuel in the domestic market.

Tubagus said that the drafting of the new policy should be completed this year so that its implementation could be begun beginning 2004.

He said that his office would also issue a regulation on the distribution of fuel in the country. According to him, the regulation would oblige companies involved in the distribution of fuel in the country not only to focus their activities on areas which have high economic potentials but also to rural or isolated areas.

Besides those related to fuel, his office would also issue a regulation on the entry of new business players in the gas pipelining activities.

Separately, Pertamina?s public relations manager Ridwan Nyak Baik questioned the government?s plan to offer Pertamina?s facilities to new players. ?New players should build their own facilities if they want to enter the country?s oil and gas downstream industry. They cannot just take the advantage of Pertamina?s assets thanks to the government?s policy,? he said. (*)