JAKARTA - West Java governor Ahmad Heryawan (Aher) welcomed the implementation of Minister Regulation of Energy and Mineral Resources (ESDM) Number 37/2016 about Participating Interest (PI) 10% in the working areas of oils and gases. According to Aher who was also as a chairman of the association of oil producing and gases (ADPM) BUMD sectors, this minister regulation was supposed give a fresh air to all of heads of regions that their ares had a potential of oils and gasses to invest in all of the activities of exploring oils and gases.
"We really appreciate ESDM Minister that has published this regulation" Governor Aher said in Introducing Event of Minister Regulation ESDM Number 37/2016 at the Central Office of SKK oil and gas, Jakarta, Wednesday (18/1/17).
According to him, this regulaion was a response towards the implementation of Participating Interest by BUMD especially upon the financing that had been the problem. Aher did not want West Java as the region that produced oil and gas become a problem and it did not give any benefits for citizens.
"We expect with this existence of exploration and operation oil and gas in our region, it would give many befits. The industry of oil and gas have to encourage the growth of the region including developement of surrouding citizens' he said.
Beside the appreciation, Aher also expressed some of ideas about this Minister Regulation implementation such as involving the region in the process of preparation of working area and providing business agencies, and also attending to signing a contracct of Contractor of Cooperation (K3S). The region needed to be involved actively in the discussion of working plan and budget (RKAB) that was informed in the monitoring activity of RKAB implementation and being involving actively in controlling and developing the enviromental aspect of citizens who live around K3S area.
"Specifically for oil and gas, the existance of region is very important due to its control if there is a problem related with the distribution of fuel and gas. So there should be synergy in central and region in the management," he said.
His parties also expected that the central government would open up the tap broader for BUMD in managing industry of oil and gas, not only in the location of earth gas, but also in delevoping the business and its use.
"The BUMD involvement is very strategic because it will encourage the bigger disrtibution benefits to other regions and citizens," he said.
The central government had been also expected to be more encouraging the acceleration of gas infrastructure in order to explore its benefits in many sectors in regions.
"We as the region goverment will also support the acceleration of that gas infrastructure," he said.
According to the data from SKK oil and gasm West Java province was in 10 areas of the largest oil production until 2016. It was Offshore North West Java (ONWJ) block that in the coast of Bekasi regency, Karawang, Subang, and Indramayu that were operated by Pertamina Upstream Energy (PHE) ONWJ with its production capacity reached 35,700 bph.
Head of Special working of business activity regarding upstream oil and gas (SKK Migas) Amien Sunaryadi said that Minister Regulation Number 37 was made to improve the regions and national's role in the ownership of PI about 10% in the business of upstream oil and gas. Besides giving the brief explanation towards the participation interest of 10% to all heads of regions and national were also meant to give the clear restriction that could be followed by all parties.
In the contract of oil and gas cooperation since there was an agreement of developing the first field and there was an extend of working area contract, so it was obligated to offer PI of 10% to local BUMD that was pointed by the governor.
"There are few things that we have faced in this time which are there are some misunderstandings between the central goverment, region goverment, contractors, citizens and the law enforcement about the implementation license in regions and the activities of upstream oil and gas business that is considered as private activities," he explained.
Introduction of the goverment administration aspect with the upstream oil and gas business was considered not being optimal and lacking of the synergy between central government, regions, contractors, citizens and law enforcers in making the priority of national and the state.
"Hopefully with this new Minister Regulation, it can fix that condition," he said.
During the introducing event of Minister Regulation Number 37 in 2016, it was also attended by the Chairman of Oil producing and Gas Association (ADPM) and also East Kalimantan Governor Awang Farouk Ishak, Bengkalis Mayor, Bontang Mayor, and other heads of regions that were joined ADPM.