TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Oil, gas governance in spotlight
Faisal Basri
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Faisal Basri. Antara
The Energy and Mineral Resources Ministry announced on Sunday the establishment of a team to solve rampant governance problems that have been gnawing at the country's oil and gas potential, including the existence of a so-called oil and gas mafia.
The team is to be led by Faisal Basri, an economist and University of Indonesia lecturer who is also known as an outspoken critic of the government.
Under the supervision of the ministry, the team will be responsible for producing recommendations regarding several crucial issues in the oil and gas sector for stakeholders as well as for the President, according to Energy and Mineral Resources Minister Sudirman Said.
Sudirman claimed that the recommendations would be useful in addressing systemic problems that had so far prevented optimum outcomes in the sector, including the existence of the oil and gas mafia.
'Improvement and higher transparency in oil and gas governance will limit the movement of the mafia and the space in which it operates,' Sudirman told a press briefing, without providing details on the so-called mafia that he was addressing.
Among the systemic problems are the low recovery rate, underperforming oil production and lifting, aging and inefficient oil refineries, as well as a lack of strategic reserves. The team is also expected to seek ways to simplify business- licensing procedures in the oil and gas sector.
'The team is an ad hoc team and is under the supervision of the ministry. It will report to me as the minister and I expect to receive recommendations at least within the next six months,' Sudirman said.
Data from the ministry showed that the oil-recovery rate now stands at below 60 percent and that aging refineries have cost an average Rp 50 trillion (US$4.1 billion) per year in losses over the past five years.
With growing demand, poor refinery facilities have pushed down the country's energy security as it is only able to support consumption of 18 days, far below a capacity of 30 days recorded 10 years ago.
The new team is also assigned to produce recommendations on the future existence of several institutions ' such as the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas) ' and to accelerate revisions of the 2001 Oil and Gas Law.
State-Owned Enterprises Minister Rini Soemarno, who also attended the press briefing, said that input from the team would help her ministry to determine the fate of Pertamina Energy Trading Ltd. (Petral), a subsidiary of state-owned energy company PT Pertamina.
Singapore-based Petral handles imports of crude oil and petroleum-based fuels for Pertamina. It has been accused of being an instrument of cartel-like operations in the oil and gas sector.
'We are waiting for the team's analysis and review of Pertamina's upstream and downstream businesses, including Petral,' she said.
ReforMiner Institute executive director Pri Agung Rakhmanto applauded the team's creation, but insisted that concrete follow-ups would be more important to solve existing problems. 'Some issues are already widely known, such as on tax and investment, but nothing has been done so far,' he said.
Marwan Batubara, director of Indonesian Resources Studies (IRESS), argued that such a team would be more effective and would have more clout if it were headed by a higher figure, such as the Vice President. He questioned Faisal's background as a ministry outsider, saying that ministry staff members might not comply with his team's recommendations.
Profile of Faisal Basri ' chairman of the country's first ever oil and gas governance reform team
Place/date of birth:
Bandung/Nov. 6, 1959
Education:
* Bachelor of Economics, University of Indonesia(FEUI), Jakarta (1985)
* Master of Arts (MA) in Economics, Vanderbilt University, USA (1988)
Notable achievements:
* Lecturer of University of Indonesia's School of Economics (1988 ' present)
*
Founder of the National Mandate Party (PAN). The Batak descendant, who
is also one of the nephews of former Indonesian vice president Adam
Malik, is one of the founding fathers of the Council for People's
Mandate (MARA) which has developed into PAN, for which Faisal was
entrusted to become the party's first secretary-general.
* In 2011, Faisal and Biem Benyamin, the son of late Betawi comedian Benyamin Sueb, took the independent path in the race for Jakarta governor and deputy governor without any support from any political party
* Established political organization Indonesia Movement (PI)Notable achievements:
* In 2000, appointed as the president's economic team assistant
* Founder of political organization Indonesia Movement (PI) and other non-profit organizations such as Yayasan Harkat Bangsa, Global Rescue Network and Yayasan Pencerahan Indonesia. Also a member of the American Economic Association (AEA) and Society for International Development (SID)
Graphic: JP/Lody Andrian
