Concerns about cooperation contracts (Kontrak Kerja Sama - KKS) has taken the center stage in the process for amendments to Law No. 22 of 2001 on Oil and Gas (Oil and Gas Law). As the core of oil and gas cooperation arrangements, the cooperation contract cannot be alienated from the Oil and Gas Law.
Satya Widya Yudha, Deputy Chairman of Commission VII at the House of Representatives, sees the issue of the nexus between the cooperation contract and the Oil and Gas Law as an impediment tonational sovereignty.
"The cooperation contract is not a lex specialist and it has to be drafted in line with national sovereignty as required by the Constitutional Court," Mr. Yudha said on Tuesday.
Offering a solution, Mr. Satya suggests a stabilization clause to allow necessary modifications to oil and gas contracts. He believes such a clause could bridge the interests of both the government and investors if new policy on the oil and gas sector is issued. Moreover, it could also prevent disputes in the long run.
In addition to the issue of the contract itself, the change on the status of the Special Work Unit on Upstream Oil and Gas Business (SKK Migas) also raises another issue. Ramson Siagian, lawmaker from Commission VII, says that this change has affected domestic oil lifting which has declined from 1.4 million to be 780,000 barrels per day. This decrease has forced the government to import fuel to satisfy domestic demand and directly impacts on the rupiah’s exchange rate.
Pri Agung Rahmanto, Executive Director of the ReforMiner Institute, supports the notion that SKK Migas’s function and position must fit constitutional requirments.
"We need the upstream oil and gas institution as an independent authority to run oil and gas production so our energy industry is not so fragile," he commented.
Concerns about cooperation contracts (Kontrak Kerja Sama - KKS) has taken the center stage in the process for amendments to Law No. 22 of 2001 on Oil and Gas (Oil and Gas Law). As the core of oil and gas cooperation arrangements, the cooperation contract cannot be alienated from the Oil and Gas Law.
Satya Widya Yudha, Deputy Chairman of Commission VII at the House of Representatives, sees the issue of the nexus between the cooperation contract and the Oil and Gas Law as an impediment tonational sovereignty.
"The cooperation contract is not a lex specialist and it has to be drafted in line with national sovereignty as required by the Constitutional Court," Mr. Yudha said on Tuesday.
Offering a solution, Mr. Satya suggests a stabilization clause to allow necessary modifications to oil and gas contracts. He believes such a clause could bridge the interests of both the government and investors if new policy on the oil and gas sector is issued. Moreover, it could also prevent disputes in the long run.
In addition to the issue of the contract itself, the change on the status of the Special Work Unit on Upstream Oil and Gas Business (SKK Migas) also raises another issue. Ramson Siagian, lawmaker from Commission VII, says that this change has affected domestic oil lifting which has declined from 1.4 million to be 780,000 barrels per day. This decrease has forced the government to import fuel to satisfy domestic demand and directly impacts on the rupiah’s exchange rate.
Pri Agung Rahmanto, Executive Director of the ReforMiner Institute, supports the notion that SKK Migas’s function and position must fit constitutional requirments.
"We need the upstream oil and gas institution as an independent authority to run oil and gas production so our energy industry is not so fragile," he commented.