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Threatened National Oil and Gas Production Down

Jakarta, Kompas - The implementation of Law Number 32 Year 2009 on the Protection and Management of Environment in April is feared will lead to the criminalization of the contractor or KKKS cooperation contract oil and natural gas.

Rules could also be contributed to the decline of national oil and gas production. According to Public Relations Manager of PT Pertamina EP Mohamad Harun, last weekend in Jakarta, it was not ready to follow the rules contained in the Act on the Environment.

Therefore, Aaron said, the institute asked for postponement of the implementation of new rules that in order to improve and add facilities based on existing rules.

"We communicate the stages that we will do to comply with Environmental Law. Currently we are still improving and adding facilities, "he said.

To conform with new rules that exist, the investment needs are expected to increase, which in turn burden the cost recovery.

So far, details of Aaron, it's still in running the oil and gas operations. However, if you will be warned it is ready to temporarily suspend operations.

If you stop operating, the potential decline in oil company PT Pertamina EP production reached 61,000 barrels per day.

On that basis, the Executing Agency for Upstream Oil and Gas (BP Migas) requested that the oil and gas KKKS not criminalized. This is related to the implementation of Law Number 32 Year 2009.

Burden the upstream sector
According to the Head of BP Migas Priyono, one of the constraints of oil and gas production targets for the future of Act No 32 of 2009, especially provisions related to licensing, quality standard, guarantee the recovery environment, the threat of revocation of business permit oil and gas operations, and criminal charges for violators.

"This would be very burdensome to the upstream oil and gas sector because of potentially could result in a significant decrease in the national oil and gas production and increased operating costs that can be billed to the state or cost recovery is high enough," said Priyono added.

Therefore, Priyono said it plans to improve coordination with law enforcement officials in the region. "Do not be subject to criminal action. Coordination with the prosecutors and police carried out to avoid law enforcement actions in the area delayed the production of petroleum, "he said.

So, if quality standards in accordance with established yet, it is necessary preparations to hold the supporting equipment.

"Oil and gas industry needed time to prepare in order to follow the rules. We have requested postponement of the implementation rules, and is currently in the process, "he said.

Priyono explained, although affected by the global economic crisis, Indonesia's upstream oil and gas sector exceeds state revenue targets specified in the budget year 2009, which produced 19.646 billion U.S. dollars. This means about 105 percent of the target state budget amounted to 18.815 billion U.S. dollars.
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