PSC wants to be involved in drafting regulations on oil and gas

Indonesia?s largest production sharing contractor (PSC) PT Caltex Pacific Indonesia has called on the government to involve PSCs in the drafting of government regulations to implement the new oil and gas law so that it would improve investment climate in the country.

?We hope that the government will provide a chance for PSCs to give its inputs before it drafts government regulations so that the new oil and gas law will improve investment climate in Indonesia,? Caltex Senior Vice President Wahyudin Yudiana Ardiwinata said after attending a public expose of the new oil and gas law at the Ministry of Energy and Mineral Resources.

He said Caltex was still studying the law and consider new investment with regards to the liberalization of the country?s oil and gas sector, including in the downstream level.

Nevertheless, for the time being, Caltex would continue to focus its investment in the upstream level.

He noted that the new oil and gas law would not influence the existing PSC contracts signed by state oil and gas firm Pertamina and the contractors. The existing contracts would remain valid until they expire. The new oil and gas law would only be imposed to the new PSC contracts.

Meanwhile, Director General of Oil and Gas Rachmat Sudibyo said that the government was optimistic that the new oil and gas law would give legal certainty, and therefore should encourage more investment.

He dispelled worries that a number of PSCs would ran away from Indonesia, contending that the country had experience in running the oil and gas business with various scheme, including with the establishment of a managing body, when Indonesia manages the Timor Gap together with Australia.

The new oil and gas law mandates the establishment of a managing body and a governing body to provide licensing and control over the upstream and downstream industries respectively.

(*)