Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Kartini Laras Makmur, Andin Aditya Rahman
The Indonesian Institute of Resource Studies (IRESS) has recommended that the Government include detailed provisions on production sharing contracts in its revision of Law No. 22 of 2001 on Oil and Gas. These provisions, according to IRESS, should prioritize the exploitation of oil and gas blocks by domestic oil and gas companies.
“This is important to maintain Indonesia’s energy security. As of today, numerous oil and gas contracts are held by foreigners because there are no provision on this issue,” stated Marwan Batubara, Executive Director of IRESS.
Marwan explained that Indonesia has an abundance of oil and gas reserves. However, the Government seems unconcerned in taking advantage of these circumstances. This is evident in the statistical data, showing that the contribution of state-owned enterprises to total national oil and gas production is only 17 percent, and only 10 percent of alternative energy.
“There is a chance to increase this, but the Government instead chooses to extend contracts like the Mahakam block, Siak block and other blocks will soon follow,” he added.
On the other hand, Satya W. Yudha, member of Commission VII at the House of Representatives, asserts that the revision of the Oil and Gas Law will incorporate provisions on oil and gas contracts.
The revision will incorporate a deadline for the Government to determine the future of oil and gas blocks under contracts with a limited period remaining. The current oil and gas legal framework, explained Yudha, is yet to provide such timeframes which has resulted in a management stalemate in oil and gas areas under soon-to-expire contracts.
“The limit for a response from the Government is 6 months to 1 year after the filing of an application for an extension,” he explained.
Yudha added that the revision will prioritize Pertamina to acquire management rights over oil and gas blocks under contracts that will soon expire. However, if Pertamina is denied a permit to manage an oil and gas block, the Government must immediately initiate a bidding process.
“The first offer will be given to Pertamina so as to avoid direct negotiations which will possibly cause unwanted prejudice,” explained Yudha.
As a side note, the contract of Siak block in Riau will end on 27 November 2013. However, the Government is yet to decide the future of this contract and is currently evaluating a possible extension based on legal, technical and economic considerations.
(hot/kc)
Kartini Laras Makmur, Andin Aditya Rahman
The Indonesian Institute of Resource Studies (IRESS) has recommended that the Government include detailed provisions on production sharing contracts in its revision of Law No. 22 of 2001 on Oil and Gas. These provisions, according to IRESS, should prioritize the exploitation of oil and gas blocks by domestic oil and gas companies.
“This is important to maintain Indonesia’s energy security. As of today, numerous oil and gas contracts are held by foreigners because there are no provision on this issue,” stated Marwan Batubara, Executive Director of IRESS.
Marwan explained that Indonesia has an abundance of oil and gas reserves. However, the Government seems unconcerned in taking advantage of these circumstances. This is evident in the statistical data, showing that the contribution of state-owned enterprises to total national oil and gas production is only 17 percent, and only 10 percent of alternative energy.
“There is a chance to increase this, but the Government instead chooses to extend contracts like the Mahakam block, Siak block and other blocks will soon follow,” he added.
On the other hand, Satya W. Yudha, member of Commission VII at the House of Representatives, asserts that the revision of the Oil and Gas Law will incorporate provisions on oil and gas contracts.
The revision will incorporate a deadline for the Government to determine the future of oil and gas blocks under contracts with a limited period remaining. The current oil and gas legal framework, explained Yudha, is yet to provide such timeframes which has resulted in a management stalemate in oil and gas areas under soon-to-expire contracts.
“The limit for a response from the Government is 6 months to 1 year after the filing of an application for an extension,” he explained.
Yudha added that the revision will prioritize Pertamina to acquire management rights over oil and gas blocks under contracts that will soon expire. However, if Pertamina is denied a permit to manage an oil and gas block, the Government must immediately initiate a bidding process.
“The first offer will be given to Pertamina so as to avoid direct negotiations which will possibly cause unwanted prejudice,” explained Yudha.
As a side note, the contract of Siak block in Riau will end on 27 November 2013. However, the Government is yet to decide the future of this contract and is currently evaluating a possible extension based on legal, technical and economic considerations.
(hot/kc)