Until January 2018, the revision process of Oil and Gas Law is still in the harmonization process in the Legislation Agency. It has taken time in the Legislation Agency for almost 10 months since the Oil and Gas Revision draft submitted by the Commission VII. While the regulation of the parliament only gives a maximum of 20 days. The Executive Director of Indonesian Parliamentary Center (IPC), Ahmad Hanafi said that one of the reasons behind the slow progress is because involved parties has not reached an understanding on the oil and gas institutions.
To accelerate the finalization of the revision, IPC and Publish What You Pay Indonesia coalition held serial discussion which involved experts and decision makers. Ahmad Redi, lecturer of Tarumanegara University said that the mandate of Constitutional Court no 36/PUU-X/2012 is to establish State Owned Enterprise (SOE) in the oil and gas sector. While the Commission VII suggested to establish Special Business Entity (BUK) in the oil and gas sector which is the merge of all SOEs in the oil and gas sector and implementing body of upstream and downstream activity.
In another hand, the government is now establishing the holding company, which consolidates three SOEs, including Pertamina, PGN, and Pertagas. Pertamina will serve as a holding parent and PGN as the subsidiary.
Seeing the current update, Hanafi said that the finalization of Oil and Gas Law Revision may not be completed in the near future. According to him, the slow progress is contradictory with the need for the parliament’s response to the implementation of the gross split scheme on the new blocks, which replaces the former scheme, Production Sharing Contract (PSC). Because gross split should be regulated by the Law, not the Ministry Regulation.