Upstream and Downstream Division Undermine Pertamina Role

Separation of the Implementing Agency and the Governing Body of Oil and Gas (Migas) in the upstream and downstream division results in state control over oil and gas Indonesia. Separation in the upstream and downstream in reality it weakens the role of Pertamina as a State Owned Enterprises (SOEs) that move and manage oil and gas. This is indicated by the size of private control of the upstream and downstream. "The fact is now, the management of oil and gas in Indonesia is controlled by foreigners, but Pertamina is able to manage it," said Jansen Sihaloho as the attorney of the judicial review petition of Law 22/2001 on Oil and Gas in a Constitutional Court (MK), Monday (16/702012) afternoon.

Preliminary trial to test the case number 65/PUU-X/2012 particulars of Article 1 number 19, number 23, number 24, Article 6, Article 9 paragraph (1), Article 10, Article 44, Article 46 and Article 63 letter c of Law Oil and Gas, was filed by Pertamina United Federation of Trade Unions (FSPPB) and Indonesia’s Oil Workers Confederation (KSPMI). According FSPPB and KSPMI, the provisions of article being tested is contrary to Article 33 paragraph (2) and (3) of the 1945 Constitution.

Oil and Gas Law Article 10 states: "(1) business entities or permanent establishments which conduct is prohibited Upstream Downstream business activities. (2) Business Entities which do not downstream business activities upstream can do. "

Jansen assesses the applicability of Article 10 oil and gas law has divided the business form the upstream and downstream oil and gas sector. Effect of Article 10 of Law of Oil and Gas, the state-owned Pertamina in the normal course of business must establish a subsidiary with different job specifications for managing upstream and downstream industries. There are about 21 (twenty one) a subsidiary of PT Pertamina Persero engaged in the upstream and downstream.

Pertamina to-21 children, namely: PT Pertamina EP, PT Pertamina EP Cepu, PT Pertamina Upstream Energy, PT Pertamina Geothermal Energy, PT Pertamina Drilling Services Indonesia, PT Pertagas, PT Usayana, Pertamina Energy Services Pte Limited, and Pertamina Energy Trading Limited , PT Patra Niaga, PT Pertamina Retail, Trans Continental PT Pertamina, PT Pelita Air Service, PT Patra Dok Dumai, PT Patra Jasa, PT Pertamina Training & Consulting, PT Tugu Pratama Indonesia, PT Pertamina Bina Medika, PT Pertamina Ventura Dana, Dana Retirement Pertamina, PT Elnusa, PT Nusantara Regas.

"Our insurance business is no longer 100% wholly owned by the state. Even from the info that develops in some media, some of Pertamina’s subsidiaries own in the near future will be privatized, "said Jansen.

Jansen Sihaloho further before a panel of constitutional justice Anwar Usman (chairman of the panel), Ahmad Fadlil Sumadi and Hamdan Zoelva, said the separation of upstream and downstream sectors as well as the formation of Pertamina’s subsidiaries in the global practice is very much opposed to the phenomenon of big is beautiful in the running industry oil which is actually high capital, high technology and high risk. Accounting for some of the companies engaged in oil and gas fields of the world are merging or merging companies to strengthen their domination of world oil and gas acquisition and management. For example, Exxon and Mobil which once stood on their own now merged into ExxonMobil, and Total Fina which merged with Elf Aquitaine became Total Fina Elf.

"Though, oil and gas companies are large corporations. That is, if for example Pertamina is disparted, it will be very difficult to compete with the world’s oil and gas companies that in fact strengthen the company’s own business entity," said Jansen.

In the petition, and KSPMI FSPPB through legal counsel asked the Court declared Article 1 number 19, number 23, number 24, Article 6, Article 9 paragraph (1), Article 10, Article 44, Article 46 and Article 63 letter c of the oil and gas conflict with 28D paragraph (1), Article 33 paragraph (2) and (3) of the 1945 Constitution, and has no binding legal force. (Rosihin Nur Ana / mh/

Monday, July 16, 2012 | 19:16 WIB 198