BALIKPAPAN: The Government of East Borneo continues to demand a fairer yield sharing on the exploitation and exploration of natural resources, particularly oil and gas that is now only 15% from the revenue in the sector.
The local government and Majelis Rakyat Kaltim Bersatu (MRKTB) as the local representative are proposing judicial review against the 2004 Law No. 33 about the financial balance of local and central government.
Such review is conducted to achieve a fair profit sharing on natural resources, including oil and gas, East Borneo Governor Awang Faroek Ishak said.
“The current profit sharing is not enough to finance the overall development in East Borneo. Therefore, MRKTB is conducting judicial review against the law,” he said over the weekend.
MRKTB criticizes the 2004 Law No. 33 in which the profit sharing portion between local and central government from oil and gas revenue regulated. “The revision on Law No. 32 may leads to Law No.33 revision. We demand it.”
Kurtubi, the energy and petroleum practitioner said the existing profit sharing for areas producing oil and gas has no clear basis. The 15% yield on such income is assumed to be similar with the existing oil drilling contractor in Indonesia.
“Such perspective [equating producing areas and contractors] needs to be changed,” he added.
Moreover, he added, the state revenue in managing oil and gas continues to decrease. The declining production and the increasing cost recovery reduce the yield, thus narrowing profit sharing between local and central government.
He said the cost recovery management should be under an institution that has surveillance structure like Board of Commissioner and not under the Executive Agency for Upstream Oil and Gas (BP Migas) which has no such structure.
The cost recovery continues to decline since the drilling infrastructure has been paid earlier. Therefore, a more detailed explanation is needed when such cost is reported to keep increasing.
“I support the efforts of oil and gas producing areas such as East Borneo to get an equivalent yield, which can be used for local management so that the juice of development can be spread more evenly,” he said.
Awang Faroek said many Jakarta businessmen grabbed huge profits from Borneo timber in the new order era when timber is popular, but nothing is left for East Borneo now except the flood and the sedimented river. (22/t06/ags)