Government: Separation of Upstream and Downstream Optimize Oil and Gas Sector Enterprises
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Separation of exploitation activities in the upstream and downstream activities of oil and gas (Migas) is aimed at optimizing the utilization, both in upstream and downstream activities. With this concept, expected in the upstream business can focus on the goal to search for oil and gas exploration activities and to optimize for the search for oil and gas reserves. While the characteristics of the downstream business activities, rather the nature of the business and do not know of any in the way of operating. So in the downstream business activities may be possible to provide the widest opportunities to businesses both large, medium, or small, namely SOEs, enterprises, cooperatives, and other small businesses to be able to conduct business activities downstream.

BP Migas as the implementing and controlling business activities upstream have the right management in terms of cooperation contracts (KKS) to be able to carry out the tasks mandated by KKS. "While the government is the holder of mining rights to be setting policy and deciding on the use of oil and gas produced from the upstream business activities."

The statement was made Director General of Oil and Mineral Resources Ministry Evita H. Legowo when delivering the Government's statement in the trial in the Constitutional Court (MK), Thursday (09/08/2012) afternoon. Session times for the third test case 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, Government Statement to listen, the House and Witness / Expert from the Petitioner and the Government.

In front of the plenary constitutional judge Achmad Sodiki (chairman of the plenary), Ahmad Fadlil Sumadi, Muhammad Alim, Maria Farida Indrati, and Anwar Usman, Director General of Oil and Gas further states that the parties designated as executor and controlling business activities upstream oil and gas are not shape-Owned Enterprises (SOEs), but the form of State-Owned Legal Entity (BHMN). "With such status, BP Migas could focus on Business Activities carry out the purpose of controlling the upstream oil and gas without the burden of liability for profit for themselves, but rather focus on the interests of the country and avoiding the imposition of state finances by the State Budget," continued Evita.

According to the Government, the formation of BP Migas is not intended to accept the transfer of mining rights, but to carry out tasks assigned by the Government as the holder of mining rights in the control of upstream oil and gas business activities through the KKS. Thus, the purpose of formation of BP Migas is intended for the government as the holder of mining rights are not directly contracting with business entities and / or a permanent establishment, so there is no equivalent position between the contractor and the government. 

In addition to the establishment of BP Migas it is intended that the government should not be exposed and not directly in the event of any dispute arising from the implementation of the KKS by the contractor. While the characteristics of the downstream business activities in order to provide the widest opportunities to businesses both large, medium, or small, state-owned enterprises, enterprises, cooperatives, and other small businesses to conduct business activities downstream, it is necessary to perform the role of government guidance and supervision through the mechanism of an operating license by the government.

In addition, the government has an obligation to ensure the availability and smooth distribution of fuel oil (BBM) in the entire territory of the Republic of Indonesia that could be done by both large enterprises, medium and small. Government is obliged to make arrangements and supervision of the implementation of the downstream business activities in certain things done by the downstream regulatory agencies, including the distribution of fuel oil, natural gas transportation business activities through the pipe. It is intended that the implementation of the guidance and supervision of the downstream business activities can be run more effectively and efficiently.

"So the assumption of the applicant stating that there has been sectored state control over oil and gas properties resulting no right to control effectively the state is incorrect and contrary to the facts," said Evita responded to the Petitioner.

Government in such petition asking the Court stated that the applicant has no legal status (legal standing). Receive a statement of the Government as a whole. To declare that Article 1 number 19 and number 23 of Article 9, Article 10, Article 44, Article 46 and Article 63 letter c of Law Number 22 Year 2001 on Oil and Gas is not contradictory to Article 28D and Article 33 paragraph (2) and subsection (3) of the Constitution of the Republic of Indonesia Year 1945, "pleaded Evita.

Meanwhile Revrisond Baswir applicant in his capacity as experts claim, the conduct of oil and gas sector should give priority to Pertamina as a state-owned enterprises. "Unable to Pertamina as the existence of state-owned enterprises is comparable to private enterprise," said Revrisond.

Alluding to the difference between upstream and downstream, the upstream sector is considered to have different characteristics from downstream because downstream is considered something that is more emphasis on business. "If the downstream is considered a business, if upstream is not a business? Where the business is upstream?" said Revrisond.

According to him, both upstream and downstream of both its business. Constitutional Court ruling in 2004, it canceled the nature of the downstream business, which is the rejection of Oil and Gas Law wishes to submit a retail price of gasoline to the market mechanism. "The Constitutional Court has determined that fuel prices must still be controlled by the state," said Revrisond.

To note, the test 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 the Oil and Gas Oil and Gas Law, was filed by the Federation of Trade Unions Pertamina Unity (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. "

According to the applicant, the applicability of Article 10 oil and gas law has divided the business form the upstream and downstream oil and gas sector. It is effect of Article 10 of Law of Oil and Gas Limited. Limited as 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. 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 petroleum industry which is actually running the high capital, high technology and high risk. (Rosihin Nur Ana / mh/Yazid.tr) 


Friday, August 10, 2012 | 08:12 WIB 115