President Reaction Over Dissolution BP Migas

The government will comply with the decision of the Constitutional Court to declare the existence of the Executive Agency for Upstream Oil and Gas (BP Migas) contrary to the Constitution of 1945. Government should immediately take the necessary measures."Regulation to prevent a vacuum and provide assurance of the upstream oil and gas has been my issue," said President Susilo Bambang Yudhoyono in a press conference at the Presidential Office, Jakata, Wednesday, November 14, 2012.SBY confirms the dissolution transition BP Migas, the position of the former BP Migas is under the Minister of Energy and Mineral Resources. "The organization keeps going, functions and duties," said Yudhoyono, who was also announced the release of Presidential Decree No. 95 Year 2012 on the Transfer and Implementation of Duties and Functions Upstream Oil and Gas.In his speech, the President also ordered the Secretary of Energy to audit the performance of BP Migas. It was to provide an explanation and transparency regarding the current position of BP Migas.President also confirmed the contract and cooperation with investors and the business continues to run as it should. "No need to create any confusion or anxiety of uncertainty," he said.As for the former employees of BP Migas, the President said they remained in position and continued her task as usual and to form new organs.According to a decision of the Constitutional Court, many are worried about the rule of law in Indonesia. In fact, the rule of law was needed to keep the investment climate.Although currently exports declined, but investment up so that Indonesia's economic growth remains good. Moreover, revenues from oil and gas sector is very important, on average 300 billion per year. Therefore the investment climate there should be no shock in the oil and gas business practices. "Through this regulation, there should be no vacuum," he said.Yesterday, the Constitutional Court partially granted the petition Muslim leaders in the judicial review of Law No. 22 Year 2001 on Oil and Gas. In this decision, the Court stated that the existence of BP Migas contrary to the Constitution of 1945."To grant the applicant's request in part," the verdict read by the Chairman of the Constitutional Court, Mahfud MD, in a trial in the Court Building, Jalan Medan Merdeka Barat, Jakarta, Tuesday, November 13, 2012.In the decision, the Constitutional Court annulled Article 1 paragraph 23 and Article 4, paragraph, article 41 paragraph 2, article 44, article 45, article 48, article 59 and article 61 letter a and article 63 of the Law on Oil and Gas in violation of the Act of 1945. The Article states that the management of oil and gas left to BP Migas as a government representative."The whole thing is related to the Implementing Agency in Oil and Gas Company Act contrary to the 1945 Constitution," he said.Megawati ProductsIn a late afternoon news conference, President Yudhoyono said BP Migas is a product of the government of President Megawati. Watchdog upstream oil and gas is formed on the spirit of the mandate of Law Number 22 Year 2001 on Oil and Gas."I think this is a good opportunity to explain to the public about the existence of BP Migas," he said. "President Megawati's era that gives a mandate for the establishment of BP Migas."The rationale for the establishment of this institute is to refer to the current oil and gas law was recently passed. A year later, BP Migas officially formed.This institution was established to avoid conflicts of interest. First, the upstream oil and gas cooperation is handled under one element of PT Pertamina, Pertamina while oil and gas businesses. "It is feared that there is conflict of interest," he said.The second rationale, according to Yudhoyono, is independence. Because, at that time, the government wanted to separate the duties and authority of the government as regulator.Third, with the formation of BP Migas, the time, the government did not implement a direct contract with a business entity. Thus, according to Yudhoyono, there is a better position, to make sure the government does not involve itself directly in the oil and gas cooperation contract.BP Migas also formed as a watchdog operating costs, because oil and gas investment then Rp150-200 billion. "This is important work and the state should not be negligent," said SBY."So, oil and gas law on the administration of Megawati have basic and clear thinking," the president said.