Ada Pertanyaan? Hubungi Kami 
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Ada Pertanyaan? Hubungi Kami Robert Sidauruk, Kartini L Makmur
In anticipation of the number of oil and gas contracts of work that will mature in the near future, the government is currently preparing a new regulation on participating interests (PI). This regulation will boost the involvement of regional governments through their regional-owned enterprises (BUMD).Sudirman Said, Minister of Energy and Mineral Resources (ESDM), has said that this new regulation aims to ensure regional governments receive income from oil and activities in their area. As a consequence, regional governments will be prohibited from using their participating interest as collateral.
“The government aims to ensure the minority ownership of regional governments through their participating interest. For onshore oil and gas blocks, the regional government is entitled to a 10% of participating interest. For offshore block, the central government will determine the appropriate amount for the participating interest,” explained Mr. Said last Thursday
Mr. Said also informed the new regulation will also eliminate rent-seeking practices that take advantage of the financial inability of regional governments to take their participating interests. Mr. Said indicated that the central government expects regional government to protect their rights from rent-seeking.
“The people want to have minority participation in oil and gas production. This must be protected and used for the greater good of the people,” said Mr. Said.
Further explaining the new regulation, I Gusti Nyoman Wiratmadja Puja, Acting Director General of Oil and Gas, said that it will cover eight main points and is expected to be issued by next week.
According to Mr. Wiratmadja, the government will establish criteria for BUMD that are entitled to a participating interest. The regulation will ensure the authority of regional governments to manage offshore resources that are located 0 – 12 nautical miles from the coastline.
“Meanwhile for resources located beyond 12 nautical miles, they will be managed by the central government,” said Mr. Wiratmadja.
In addition, the new regulation will also set out requirements for BUMD to take their 10% participating interest. For instance, the respective BUMD must have the financial ability to manage their participation interest and other operational activities. This can be achieved by cooperating with state-owned enterprises (BUMN) or the Indonesia Investment Agency (Pusat Investasi Pemerintah)
Moreover, the new regulation will include a deadline for BUMD to submit an expression of interest and statement of capability to take their participating interest. These documents, as Mr. Wiratmadja explained, must be submitted within 60 days of the first offer for a participating interest being announced by an oil and gas company.
If no BUMNs are interested, oil and gas companies must offer the participating interest to certain BUMN determined by the Minister of ESDM. The transfer of the participating interest will be finalized through approval from the Minister of ESDM and Special Works Unit for Upstream Oil and Gas Activities (SKK Migas).
(hot/kc)
Robert Sidauruk, Kartini L Makmur
In anticipation of the number of oil and gas contracts of work that will mature in the near future, the government is currently preparing a new regulation on participating interests (PI). This regulation will boost the involvement of regional governments through their regional-owned enterprises (BUMD).Sudirman Said, Minister of Energy and Mineral Resources (ESDM), has said that this new regulation aims to ensure regional governments receive income from oil and activities in their area. As a consequence, regional governments will be prohibited from using their participating interest as collateral.
“The government aims to ensure the minority ownership of regional governments through their participating interest. For onshore oil and gas blocks, the regional government is entitled to a 10% of participating interest. For offshore block, the central government will determine the appropriate amount for the participating interest,” explained Mr. Said last Thursday
Mr. Said also informed the new regulation will also eliminate rent-seeking practices that take advantage of the financial inability of regional governments to take their participating interests. Mr. Said indicated that the central government expects regional government to protect their rights from rent-seeking.
“The people want to have minority participation in oil and gas production. This must be protected and used for the greater good of the people,” said Mr. Said.
Further explaining the new regulation, I Gusti Nyoman Wiratmadja Puja, Acting Director General of Oil and Gas, said that it will cover eight main points and is expected to be issued by next week.
According to Mr. Wiratmadja, the government will establish criteria for BUMD that are entitled to a participating interest. The regulation will ensure the authority of regional governments to manage offshore resources that are located 0 – 12 nautical miles from the coastline.
“Meanwhile for resources located beyond 12 nautical miles, they will be managed by the central government,” said Mr. Wiratmadja.
In addition, the new regulation will also set out requirements for BUMD to take their 10% participating interest. For instance, the respective BUMD must have the financial ability to manage their participation interest and other operational activities. This can be achieved by cooperating with state-owned enterprises (BUMN) or the Indonesia Investment Agency (Pusat Investasi Pemerintah)
Moreover, the new regulation will include a deadline for BUMD to submit an expression of interest and statement of capability to take their participating interest. These documents, as Mr. Wiratmadja explained, must be submitted within 60 days of the first offer for a participating interest being announced by an oil and gas company.
If no BUMNs are interested, oil and gas companies must offer the participating interest to certain BUMN determined by the Minister of ESDM. The transfer of the participating interest will be finalized through approval from the Minister of ESDM and Special Works Unit for Upstream Oil and Gas Activities (SKK Migas).
(hot/kc)