SKK Migas: regions seeking for higher revenue from oil, gas must talk with MoF

By Febry Silaban

Provincial and regency administrations requesting for greater revenue portion from oil and gas companies operating in their respective regions should talk with the Ministry of Finance (MoF), not with the Ministry of Energy and Mineral Resources (MEMR) nor the oil and gas production sharing contractors (PSCs)

Rudi Rubiandini, Chairman of SKK Migas, the upstream oil and gas regulator, said on Tuesday that the authority to determine the revenue sharing from oil and gas sector lies in the hands of the Ministry of Finance. ?If the regions feel that their revenue portion from oil and gas industries operating in their areas are very small, please sit down with the central government (ministry of finance) discuss it,? he said.

Rudi, however, believes that the regional governments should obtain greater revenue portion to help accelerate local economic development. For instance, the current 15 percent revenue portion from oil could be lifted to 30 percent so that the local people can really benefit from their oil resources, he added.

Under the current revenue split, producing regions get 15 percent revenue portion, while 85 percent goes to the central government. The 15 percent portion is then split again: 3 percent for the province, 6 percent for the producing regencies, and 6 percent for the non-producing regencies within the province. For gas, the revenue split is 30:70. The 30 percent portion is then distributed again to producing regencies (12 percent), province 12 percent), and non-producing regencies within the province (6 percent).

Editing by Reiner Simanjuntak