VP seeks to simplify permits in oil, gas sector

Vice President Boediono urged ministers and the upstream oil and gas authority SKK Migas to identify regulations which have hampered the development of the oil and gas sector in the country.

Speaking at the opening of the 38th Indonesia Petroleum Association (IPA) annual conference and exhibition on Wednesday, Boediono acknowledged that permitting issue has been a major problem hampering oil and gas development.

?This (regulation constraints) is the excess of democratization and decentralization. Even though there are only five months left (before the current administration?s term ends), I ask the ministers and SKK Migas to sit together to outline which regulations in the oil and gas sector that must be simplified,? he said.

The Vice President has also asked ministers, SKK Migas and regional leaders to consider and agree on service level agreement to help support the oil and gas sector development.

Meanwhile, Minister of Energy and Mineral Resources Jero Wacik said that given the remaining five months period, the priority now is reduce the 286 different permits required by oil and gas firms to conduct activities. ?We want to cut it down to 69 permits, which will be divided into nine clusters,? he said.

Oil and gas contractors in the country have long complained about the various obstacles including regulatory problems hampering efforts to find new oil and gas reserves and increase production.

Lukman Mahfoedz, chairman of IPA and president director of PT Medco Energi Internasional, said Indonesia will have to triple the exploration activities through 2025 in order to halve the supply-demand deficit, which is estimated to reach 2 million barrels of oil-equivalent.

Editing by Reiner Simanjuntak