Sudirman Said

JAKARTA, KOMPAS – Every oil and gas working area whose contract period will expire will be handed over to PT Pertamina (Persero) to resume operations. The assignment for Pertamina is being proposed by the government in the revision of Law Number 22 the Year 2001 concerning Oil and Gas. The specialty for Pertamina is to support national energy security.

According to the Minister of Energy and Mineral Resources (ESDM) Sudirman Said, national oil companies such as Pertamina must become a national mainstay in terms of energy security. Specifically, in the upstream oil business sector, Pertamina will be encouraged to become a highly competitive company.

“The government’s thought is that the completed block is handed over to Pertamina. This was stated in the law and later on, their derivatives were reaffirmed by their management rights. This is not necessarily agreed upon, we will see the process ahead, “said Sudirman, Friday (3/13), in Jakarta.

Sudirman added, Pertamina must also be allowed to become a major player in the domestic oil and gas sector. Moreover, in the future, oil demand will be even greater along with the rate of population growth.

In addition, continued Sudirman, the perspective of domestic oil and gas management must be changed. All this time, oil and gas management is seen as a source of state revenue. That view must be changed that oil and gas must be a driver of long-term economic growth.

“We hope that the discussion on the revision of the law can be completed this year. I think the government and the DPR have the same desire, “he said.

Sudirman said, the spirit of revising the law is to improve the oil and gas investment climate in Indonesia. In addition, the revision also discussed the status of the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas).

“So far, in some discussions on the revision, SKK Migas will be a special SOE which is authorized by the mining authority,” he said.

Energy observer from Trisakti University, Jakarta, Pri Agung Rakhmanto said the government’s intention to give Pertamina a privilege could have a positive impact on national energy security. However, the position and authority of SKK Migas need to be clarified.

“The granting of privileges to Pertamina to continue the operation of the oil and gas working area cannot be separated from what the status of SKK Migas will be. This needs to be studied further, “said Pri Agung.

Strategic Reserve

Maryati Abdullah, National Coordinator of Publish What You Pay Indonesia, a coalition of civil society for transparency and accountability in the governance of oil and gas extractive resources, said it had proposed several things in the revision of Law No. 22/2001 to the Oil and Gas Governance Reform Team led by Faisal Basri. One of the proposals is oil and gas management planning.

“Oil and gas management planning must include aspects of national energy security. One of them is the transfer of energy needs from oil and natural gas to renewable energy, “said Maryati.

In the bill, continued Maryati, also emphasized the importance of national oil strategic reserves. At present, Indonesia does not yet have strategic oil reserves in case of emergencies, such as war. Indonesia relies on sufficient fuel oil reserves for only 18 days.

“It is necessary to raise funds from the sale of non-renewable natural resources for the development of clean and renewable energy, including to fund activities related to the search for new oil and gas reserves,” said Maryati. (APO)

The printed version of this article appeared in the Kompas newspaper March 14, 2015, on page 18 under the title “The Government Provides Privileges to Pertamina”.