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Kartini L Makmur, Robert Sidauruk
The 2013 shaped up to be a landmark year for the Indonesian energy sector. The year saw several significant developments and changes including Government decisions regarding extensions to mining contracts that will have long term impacts on the sector.
One major development was the arrest of Rudi Rubiandini, the Head of the Special Work Units for Upstream Oil and Gas Activities (SKK Migas) by the Corruption Eradication Commission (KPK) on allegations of bribery.
Following Rudi’s arrest, the case further implicated several important people at SKK Migas including Gde Pradyana - Secretary of SKK Migas, Johannes Widhonarko - Acting Chairman of SKK Migas, Waryono Karno - Secretary to the Minister of Energy and Mineral Resources (ESDM), and the ESDM Minister himself, Jero Wacik.
Extensions to mining and oil and gas contracts also provided fertile ground for controversy. Over the last six months the Government has made several significant decisions to discontinue several mining and oil and gas contracts.
The first was the Government’s refusal to extend the contract of work (kontrak karya) of PT Koba Tin at Bangka Belitung.
Following this refusal, the Government also instructed PT Timah (Persero Tbk) to be placed under temporary management for their work area until the Government appoints a new contractor.
Second was the Government’s decision to discontinue the production sharing contract (kontrak bagi hasil) between the Government and Chevron over the Siak and Kampar blocks in late November. This was implemented by the Minister of ESDM with the Government refusing to extend Chevron’s contract over the Siak and Kampar blocks. Chevron was previously granted a 50 year exploitation contract.
One piece of unfinished homework for the Government is how to deal with the status of PT Total E&P Indonesie’s Contract for the Mahakam Blok, which will expire in March 2017. Despite many interested parties suggesting to the Government not to extend the contract on the basis of it being better to pass management to a State Owned Enterprise, the Government is yet to make its decision on this issue.
Other important event for Indonesia’s energy sector is the export ban on raw minerals schedule to commence on 12 January next year pursuant to Article 170 of Law No. 4 of 2009 on Minerals and Coal Mining. The House of Representative is insisting that the export ban be strictly enforced without exception despite the fact that to do so will burden many small mining companies.
Despite the clouds that the imminent mineral export ban is bringing, there was one positive development for the sector as the year came to a close. PT Inalum, the biggest Aluminium producer in Indonesia, became a State-Owned Enterprise on 19 December 2013 when the Government and Nippon Asahan Aluminium Hirsho Haruta’s (majority shareholders) signed a deed of transfer for the sale of their shares in the company.
(ds/kc)
The 2013 shaped up to be a landmark year for the Indonesian energy sector. The year saw several significant developments and changes including Government decisions regarding extensions to mining contracts that will have long term impacts on the sector.
One major development was the arrest of Rudi Rubiandini, the Head of the Special Work Units for Upstream Oil and Gas Activities (SKK Migas) by the Corruption Eradication Commission (KPK) on allegations of bribery.
Following Rudi’s arrest, the case further implicated several important people at SKK Migas including Gde Pradyana - Secretary of SKK Migas, Johannes Widhonarko - Acting Chairman of SKK Migas, Waryono Karno - Secretary to the Minister of Energy and Mineral Resources (ESDM), and the ESDM Minister himself, Jero Wacik.
Extensions to mining and oil and gas contracts also provided fertile ground for controversy. Over the last six months the Government has made several significant decisions to discontinue several mining and oil and gas contracts.
The first was the Government’s refusal to extend the contract of work (kontrak karya) of PT Koba Tin at Bangka Belitung.
Following this refusal, the Government also instructed PT Timah (Persero Tbk) to be placed under temporary management for their work area until the Government appoints a new contractor.
Second was the Government’s decision to discontinue the production sharing contract (kontrak bagi hasil) between the Government and Chevron over the Siak and Kampar blocks in late November. This was implemented by the Minister of ESDM with the Government refusing to extend Chevron’s contract over the Siak and Kampar blocks. Chevron was previously granted a 50 year exploitation contract.
One piece of unfinished homework for the Government is how to deal with the status of PT Total E&P Indonesie’s Contract for the Mahakam Blok, which will expire in March 2017. Despite many interested parties suggesting to the Government not to extend the contract on the basis of it being better to pass management to a State Owned Enterprise, the Government is yet to make its decision on this issue.
Other important event for Indonesia’s energy sector is the export ban on raw minerals schedule to commence on 12 January next year pursuant to Article 170 of Law No. 4 of 2009 on Minerals and Coal Mining. The House of Representative is insisting that the export ban be strictly enforced without exception despite the fact that to do so will burden many small mining companies.
Despite the clouds that the imminent mineral export ban is bringing, there was one positive development for the sector as the year came to a close. PT Inalum, the biggest Aluminium producer in Indonesia, became a State-Owned Enterprise on 19 December 2013 when the Government and Nippon Asahan Aluminium Hirsho Haruta’s (majority shareholders) signed a deed of transfer for the sale of their shares in the company.
(ds/kc)
Kartini L Makmur, Robert Sidauruk
The 2013 shaped up to be a landmark year for the Indonesian energy sector. The year saw several significant developments and changes including Government decisions regarding extensions to mining contracts that will have long term impacts on the sector.
One major development was the arrest of Rudi Rubiandini, the Head of the Special Work Units for Upstream Oil and Gas Activities (SKK Migas) by the Corruption Eradication Commission (KPK) on allegations of bribery.
Following Rudi’s arrest, the case further implicated several important people at SKK Migas including Gde Pradyana - Secretary of SKK Migas, Johannes Widhonarko - Acting Chairman of SKK Migas, Waryono Karno - Secretary to the Minister of Energy and Mineral Resources (ESDM), and the ESDM Minister himself, Jero Wacik.
Extensions to mining and oil and gas contracts also provided fertile ground for controversy. Over the last six months the Government has made several significant decisions to discontinue several mining and oil and gas contracts.
The first was the Government’s refusal to extend the contract of work (kontrak karya) of PT Koba Tin at Bangka Belitung.
Following this refusal, the Government also instructed PT Timah (Persero Tbk) to be placed under temporary management for their work area until the Government appoints a new contractor.
Second was the Government’s decision to discontinue the production sharing contract (kontrak bagi hasil) between the Government and Chevron over the Siak and Kampar blocks in late November. This was implemented by the Minister of ESDM with the Government refusing to extend Chevron’s contract over the Siak and Kampar blocks. Chevron was previously granted a 50 year exploitation contract.
One piece of unfinished homework for the Government is how to deal with the status of PT Total E&P Indonesie’s Contract for the Mahakam Blok, which will expire in March 2017. Despite many interested parties suggesting to the Government not to extend the contract on the basis of it being better to pass management to a State Owned Enterprise, the Government is yet to make its decision on this issue.
Other important event for Indonesia’s energy sector is the export ban on raw minerals schedule to commence on 12 January next year pursuant to Article 170 of Law No. 4 of 2009 on Minerals and Coal Mining. The House of Representative is insisting that the export ban be strictly enforced without exception despite the fact that to do so will burden many small mining companies.
Despite the clouds that the imminent mineral export ban is bringing, there was one positive development for the sector as the year came to a close. PT Inalum, the biggest Aluminium producer in Indonesia, became a State-Owned Enterprise on 19 December 2013 when the Government and Nippon Asahan Aluminium Hirsho Haruta’s (majority shareholders) signed a deed of transfer for the sale of their shares in the company.
(ds/kc)
The 2013 shaped up to be a landmark year for the Indonesian energy sector. The year saw several significant developments and changes including Government decisions regarding extensions to mining contracts that will have long term impacts on the sector.
One major development was the arrest of Rudi Rubiandini, the Head of the Special Work Units for Upstream Oil and Gas Activities (SKK Migas) by the Corruption Eradication Commission (KPK) on allegations of bribery.
Following Rudi’s arrest, the case further implicated several important people at SKK Migas including Gde Pradyana - Secretary of SKK Migas, Johannes Widhonarko - Acting Chairman of SKK Migas, Waryono Karno - Secretary to the Minister of Energy and Mineral Resources (ESDM), and the ESDM Minister himself, Jero Wacik.
Extensions to mining and oil and gas contracts also provided fertile ground for controversy. Over the last six months the Government has made several significant decisions to discontinue several mining and oil and gas contracts.
The first was the Government’s refusal to extend the contract of work (kontrak karya) of PT Koba Tin at Bangka Belitung.
Following this refusal, the Government also instructed PT Timah (Persero Tbk) to be placed under temporary management for their work area until the Government appoints a new contractor.
Second was the Government’s decision to discontinue the production sharing contract (kontrak bagi hasil) between the Government and Chevron over the Siak and Kampar blocks in late November. This was implemented by the Minister of ESDM with the Government refusing to extend Chevron’s contract over the Siak and Kampar blocks. Chevron was previously granted a 50 year exploitation contract.
One piece of unfinished homework for the Government is how to deal with the status of PT Total E&P Indonesie’s Contract for the Mahakam Blok, which will expire in March 2017. Despite many interested parties suggesting to the Government not to extend the contract on the basis of it being better to pass management to a State Owned Enterprise, the Government is yet to make its decision on this issue.
Other important event for Indonesia’s energy sector is the export ban on raw minerals schedule to commence on 12 January next year pursuant to Article 170 of Law No. 4 of 2009 on Minerals and Coal Mining. The House of Representative is insisting that the export ban be strictly enforced without exception despite the fact that to do so will burden many small mining companies.
Despite the clouds that the imminent mineral export ban is bringing, there was one positive development for the sector as the year came to a close. PT Inalum, the biggest Aluminium producer in Indonesia, became a State-Owned Enterprise on 19 December 2013 when the Government and Nippon Asahan Aluminium Hirsho Haruta’s (majority shareholders) signed a deed of transfer for the sale of their shares in the company.
(ds/kc)