Oil and Gas Draft Bill to Enter Harmonization Process Soon

The House of Representatives of the Republic of Indonesia (“DPR RI”) plans to continue deliberations on the Draft Bill on the amendment to Law No. 22 of 2001 (“Law 22/2001”) on Oil and Gas. During this legislative session, the Oil and Gas Draft Bill is the primary focus of Commission XII as it moves into the harmonization phase.

“We want to finalize the Oil and Gas Draft Bill; the plan is to complete at least the harmonization process in the Legislation Body (Baleg) during this session or by the end of this year,” said Bambang Heriyadi, Deputy Chair of Commission XII of the DPR RI, to Hukumonline.

Bambang explained that there are a number of updates in the Oil and Gas Draft Bill currently being prepared; the main one, according to him, is an adjustment to several Constitutional Court (“MK”) Decisions that require the control and exploitation of energy resources to be entrusted to State-Owned Enterprises (“BUMN”). In addition, the Draft Bill will also provide institutional certainty for the upstream oil and gas sector and establish a new funding agency for upstream oil and gas activities through the Petroleum Fund.

Echoing Bambang’s remarks, Bob Hasan, Chair of the Baleg of DPR, stated that the harmonization process will be implemented in the near future so that the bill can be promptly adopted as a DPR-initiated proposal. According to Bob, Baleg’s view on the Oil and Gas Draft Bill is that a specialized agency, managed professionally, is needed to oversee the upstream oil and gas sector and coordinate directly with the President.

“We will soon harmonize the Oil and Gas Draft Bill; Baleg’s view, in essence, is that management must be professional, and we need a separate agency to coordinate directly with the President,” he added.