Rulings on upstream and down stream operations need revision

The State secretary has asked the Ministry of Energy and Mineral Resources to review the proposed governmental regulations on the upstream and downstream operations due the lack of clarity over several issues, the government agency in charge of upstream operations, Bisnis Indonesia reported on Monday.

With regards the regulation on upstream operations, the State Secretary demanded the regulation clarify the authority of BP Migas, which was established last year to oversee oil and gas exploration and production activities, a source told the daily.

"BP Migas wants a legal authority to sign oil contracts, while at the same time, it also wants to manage assets," the source cited an example of the lack of the clarity of the regulations.

With regards the regulation on the downstream sector, the State Secretary opines that regulation still needs to clarify several "non-technical" issues, which are basically not essential.

The rulings on upstream and downstream operations are being proposed as the implementation regulations of the articles related to upstream and downstream oil and gas operations stipulated in the new oil and gas law.

Director General of Oil and Gas Iin Arifin Takhyan confirmed that the State Secretary had asked the ministry to review the proposed rulings.

According to him, one thing that the State Secretary wants the regulation on the upstream operations to clarify was related to the status of operational facilities, including rig, after contractors ended their operations.

Meanwhile Minister of Energy and Mineral Resources Purnomo Yusgiantoro acknowledged that certain clauses in the proposed rulings needed clarification, but the change would not be insignificant.

He said the ministry had yet to receive the drafts from the State Secretary. (*)