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Indonesia Parliament to start discussing amended oil and gas law in January

JAKARTA (Rambu Energy) – The House of Representative (DPR) plans to start discussing the amended oil and gas draft law in January, 2015 that will replace the existing oil and gas law, enacted in 2001.

The head of Commission VII of DPR that oversees energy and mining industries Kardaya Warnika said that the amended law is crucial as it will provide uncertainty to oil and gas industry players. He said the Constitutional Court’s (MK) decision to dismantle the upstream oil and gas regulatory body, BP Migas, in late 2012 paves the way for drafting a new law.

He argues that the Special Task Force for Upstream Oil and Gas Business (SKK Migas) which was formed by the government to replace BP Migas is temporary in nature. This creates uncertainty to major oil and gas players.

“Large oil and gas players are hesitant to deal with a temporary agency. They only want to deal with a permanent agency,” Warnika, a former BP Migas chairman, said at a seminar on ‘Pertamina Energy Outlook 2015’ in Jakarta on Thursday.

He therefore urged all industry players to provide inputs to the Parliament before or during the deliberation of the draft oil and gas law.

Over the past few years, industry players and observers have been split over whether to amend the existing oil and gas law or keep it as it is. Oil and gas industry players have called on the government to create and improve legal certainty in the industry. The said the amended oil and gas law should be prepared in a spirit to improve investment in the industry, not discouraging the investment or create legal uncertainty.

Kardaya Warnika said apart from clarifying the position of the SKK Migas, the new law should also cover oil and gas working areas, permit issues, tender and so on. The amended oil and gas law should also cover downstream industries, which were not clearly regulated under the existing oil and gas law. (*)

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