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Marcell Sihombing, Kartini L. Makmur
Ministry of ESDM Office. Photo by: RES
Capital-intensive and high-risk, but able to make a substantial contribution to the national economy, the energy sector is never far from the political spotlight.
2015 has proved to be a particularly controversial year for the sector and has been marked by a cabinet reshuffle, the appointment of Maroef Sjamsoeddin (former Vice-Chair of State Intelligence Agency/BIN) to the position of President Director of Freeport Indonesia, as well as the recent scandal involving Setya Novanto (the former Speaker of the House of Representatives).
Hukumonlinehas compiled a list of the ten most important events that hit the energy-sector headlines during 2015.
1. Dismissal of the Vice-Chair of the Oil and Gas Specialized Working Unit (SKK Migas)
The start of 2015 was marked by the issuance of Minister of Energy and Mineral Resources (ESDM) Decree No. 0041K/73/MEM/2015. This decree resulted in Johannes Widjonarko being dismissed from his position as the Vice-Chair of SKK Migas.
Prior to the Decree, Mr. Widjonarko had been appointed as the Acting Chair of SKK Migas, replacing Rudi Rubiandini, who was under investigation by the Corruption Eradication Commission (KPK) in a bribery case.
2. Former BIN Executive Appointed Freeport Head
Maroef Sjamsoeddin, former Vice-Chair of BIN, was appointed Freeport’s President Director, replacing Rozik B. Soetjipto, who has now retired. The appointment has proved controversial however, as many believe that the installation of Mr. Sjamsoeddin will lead to major losses for Indonesia.
3. Establishment of the Gas-Policy Roadmap
There was good news too though when the government officially launched the gas-policy roadmap,which sets out a series of objectives that stretch all the way to 2030. Under the roadmap, the government laid out several major gas projects, such as the construction of a number of liquid natural-gas (LNG) and compressed natural-gas (CNG) refineries and their distribution networks. The government is also aiming to increase the total length of the country’s gas-pipeline network, as well as build an LNG regasification terminal, a number of gas-fueling stations, and several residential gas networks.
4. Freeport and Newmont Licensed to Export Concentrate
The government has granted concentrate export licenses to a total of eight mining companies: Freeport, PT Newmont Nusa Tenggara, PT Sebuku Iron Electric Ores, PT Lumbung Mineral Sentosa, PT Smelting, PT Sumber Baja Prima, PT Kapuas Prima Coal, and PT Megatop Inti Selaras.
Many have been critical of this decision however, as it contradicts Law No. 4 of 2009on Minerals and Coal (Minerals Law). Arief Puyuono, the Coordinator of the People’s Coalition to Defend the Three Competencies (Trisakti) and the Nine Agenda (Nawacita), asserted that the Mineral Law had prohibited the export of concentrate since 12 January 2014.
5. Exemptions to the Mandatory Letter of Credit (L/C) Policy
At the beginning of April, the Ministry of Trade agreed to exempt oil and gas export activities from the mandatory use of L/C. This move was a response to the Ministry of ESDM’s request that the oil and gas sector be waived from the L/C obligation set out under Minister of Trade Regulation No. 4 of 2015,which came into force on 1 April 2015.
6. Mahakam Block Shares Divided Up
As we headed towards the middle of the year, the long debate over the Mahakam Block shares finally drew to a conclusion with the government officially announcing how the Mahakam Block shares were to be divvied out. In the event, 70% of the block was granted to Pertamina, while the remaining 30% was granted to Total E&P Indonesia and Inpex Corp.
7. Leniency Regarding the Mandatory Utilization of Rupiah
The issuance of Bank Indonesia (BI) Regulation No. 17/3/PBI/2015,which mandates for the use of the rupiah in all transactions, was met with an exemption request by the Ministry of ESDM. The Ministry of ESDM was eventually granted permission from BI to continue to use foreign currency for the construction of infrastructure for oil and gas, electrical power, renewable energy and energy-conservation (energi baru, terbarukan, dan konservasi energi - EBTKE).
BI eventually granted the request after taking the readiness of businesses, as well as the continuity of their business operations into account. BI stated at the time that the immediate implementation of the mandatory-utilization-of-rupiah policy without a sufficient transition period would have a severe negative effect on businesses.
8. Ministry of ESDM Office Shot at
An unknown assailant opened fire on the office of the Ministry of ESDM’s Directorate General of Electricity during 2015. Fortunately, the fourth-floor target was empty when the shooting occurred, as it was the staff’s lunch hour at the time. Widhyawan Prawiraatmadja, Special Staff at the Ministry of ESDM and a regular user of the office in question, expressed his belief that the perpetrator was most likely connected to parties that felt aggrieved by ongoing efforts to reform the institution.
9. Freeport Scandal
In the middle of November, Minister Sudirman Said report the speaker of the House of Representatives, Setya Novanto, to the House Ethics Council (MKD) for allegedly invoking the president’s name while also demanding a tranche of Freeport shares. As a result of all of this intrigue, Novanto ended up relinquishing his position as speaker of the House.
10. Cost Recovery Disputes Lead to Arbitration
SKK Migas requested assistance from the Attorney General before deciding to appeal to international arbitration as regards oil-and-gas cost-recovery differences. According to SKK Migas findings, many cost-recovery issues have arisen, mostly relating to issues of taxation. SKK Migas is concerned however that a lack of competent personnel could result in them losing the case and being forced to cover all of the arbitration expenses.
(rfs/sp)
2015 has proved to be a particularly controversial year for the sector and has been marked by a cabinet reshuffle, the appointment of Maroef Sjamsoeddin (former Vice-Chair of State Intelligence Agency/BIN) to the position of President Director of Freeport Indonesia, as well as the recent scandal involving Setya Novanto (the former Speaker of the House of Representatives).
Hukumonlinehas compiled a list of the ten most important events that hit the energy-sector headlines during 2015.
1. Dismissal of the Vice-Chair of the Oil and Gas Specialized Working Unit (SKK Migas)
The start of 2015 was marked by the issuance of Minister of Energy and Mineral Resources (ESDM) Decree No. 0041K/73/MEM/2015. This decree resulted in Johannes Widjonarko being dismissed from his position as the Vice-Chair of SKK Migas.
Prior to the Decree, Mr. Widjonarko had been appointed as the Acting Chair of SKK Migas, replacing Rudi Rubiandini, who was under investigation by the Corruption Eradication Commission (KPK) in a bribery case.
2. Former BIN Executive Appointed Freeport Head
Maroef Sjamsoeddin, former Vice-Chair of BIN, was appointed Freeport’s President Director, replacing Rozik B. Soetjipto, who has now retired. The appointment has proved controversial however, as many believe that the installation of Mr. Sjamsoeddin will lead to major losses for Indonesia.
3. Establishment of the Gas-Policy Roadmap
There was good news too though when the government officially launched the gas-policy roadmap,which sets out a series of objectives that stretch all the way to 2030. Under the roadmap, the government laid out several major gas projects, such as the construction of a number of liquid natural-gas (LNG) and compressed natural-gas (CNG) refineries and their distribution networks. The government is also aiming to increase the total length of the country’s gas-pipeline network, as well as build an LNG regasification terminal, a number of gas-fueling stations, and several residential gas networks.
4. Freeport and Newmont Licensed to Export Concentrate
The government has granted concentrate export licenses to a total of eight mining companies: Freeport, PT Newmont Nusa Tenggara, PT Sebuku Iron Electric Ores, PT Lumbung Mineral Sentosa, PT Smelting, PT Sumber Baja Prima, PT Kapuas Prima Coal, and PT Megatop Inti Selaras.
Many have been critical of this decision however, as it contradicts Law No. 4 of 2009on Minerals and Coal (Minerals Law). Arief Puyuono, the Coordinator of the People’s Coalition to Defend the Three Competencies (Trisakti) and the Nine Agenda (Nawacita), asserted that the Mineral Law had prohibited the export of concentrate since 12 January 2014.
5. Exemptions to the Mandatory Letter of Credit (L/C) Policy
At the beginning of April, the Ministry of Trade agreed to exempt oil and gas export activities from the mandatory use of L/C. This move was a response to the Ministry of ESDM’s request that the oil and gas sector be waived from the L/C obligation set out under Minister of Trade Regulation No. 4 of 2015,which came into force on 1 April 2015.
6. Mahakam Block Shares Divided Up
As we headed towards the middle of the year, the long debate over the Mahakam Block shares finally drew to a conclusion with the government officially announcing how the Mahakam Block shares were to be divvied out. In the event, 70% of the block was granted to Pertamina, while the remaining 30% was granted to Total E&P Indonesia and Inpex Corp.
7. Leniency Regarding the Mandatory Utilization of Rupiah
The issuance of Bank Indonesia (BI) Regulation No. 17/3/PBI/2015,which mandates for the use of the rupiah in all transactions, was met with an exemption request by the Ministry of ESDM. The Ministry of ESDM was eventually granted permission from BI to continue to use foreign currency for the construction of infrastructure for oil and gas, electrical power, renewable energy and energy-conservation (energi baru, terbarukan, dan konservasi energi - EBTKE).
BI eventually granted the request after taking the readiness of businesses, as well as the continuity of their business operations into account. BI stated at the time that the immediate implementation of the mandatory-utilization-of-rupiah policy without a sufficient transition period would have a severe negative effect on businesses.
8. Ministry of ESDM Office Shot at
An unknown assailant opened fire on the office of the Ministry of ESDM’s Directorate General of Electricity during 2015. Fortunately, the fourth-floor target was empty when the shooting occurred, as it was the staff’s lunch hour at the time. Widhyawan Prawiraatmadja, Special Staff at the Ministry of ESDM and a regular user of the office in question, expressed his belief that the perpetrator was most likely connected to parties that felt aggrieved by ongoing efforts to reform the institution.
9. Freeport Scandal
In the middle of November, Minister Sudirman Said report the speaker of the House of Representatives, Setya Novanto, to the House Ethics Council (MKD) for allegedly invoking the president’s name while also demanding a tranche of Freeport shares. As a result of all of this intrigue, Novanto ended up relinquishing his position as speaker of the House.
10. Cost Recovery Disputes Lead to Arbitration
SKK Migas requested assistance from the Attorney General before deciding to appeal to international arbitration as regards oil-and-gas cost-recovery differences. According to SKK Migas findings, many cost-recovery issues have arisen, mostly relating to issues of taxation. SKK Migas is concerned however that a lack of competent personnel could result in them losing the case and being forced to cover all of the arbitration expenses.
(rfs/sp)
Marcell Sihombing, Kartini L. Makmur
Ministry of ESDM Office. Photo by: RES
Capital-intensive and high-risk, but able to make a substantial contribution to the national economy, the energy sector is never far from the political spotlight.
2015 has proved to be a particularly controversial year for the sector and has been marked by a cabinet reshuffle, the appointment of Maroef Sjamsoeddin (former Vice-Chair of State Intelligence Agency/BIN) to the position of President Director of Freeport Indonesia, as well as the recent scandal involving Setya Novanto (the former Speaker of the House of Representatives).
Hukumonlinehas compiled a list of the ten most important events that hit the energy-sector headlines during 2015.
1. Dismissal of the Vice-Chair of the Oil and Gas Specialized Working Unit (SKK Migas)
The start of 2015 was marked by the issuance of Minister of Energy and Mineral Resources (ESDM) Decree No. 0041K/73/MEM/2015. This decree resulted in Johannes Widjonarko being dismissed from his position as the Vice-Chair of SKK Migas.
Prior to the Decree, Mr. Widjonarko had been appointed as the Acting Chair of SKK Migas, replacing Rudi Rubiandini, who was under investigation by the Corruption Eradication Commission (KPK) in a bribery case.
2. Former BIN Executive Appointed Freeport Head
Maroef Sjamsoeddin, former Vice-Chair of BIN, was appointed Freeport’s President Director, replacing Rozik B. Soetjipto, who has now retired. The appointment has proved controversial however, as many believe that the installation of Mr. Sjamsoeddin will lead to major losses for Indonesia.
3. Establishment of the Gas-Policy Roadmap
There was good news too though when the government officially launched the gas-policy roadmap,which sets out a series of objectives that stretch all the way to 2030. Under the roadmap, the government laid out several major gas projects, such as the construction of a number of liquid natural-gas (LNG) and compressed natural-gas (CNG) refineries and their distribution networks. The government is also aiming to increase the total length of the country’s gas-pipeline network, as well as build an LNG regasification terminal, a number of gas-fueling stations, and several residential gas networks.
4. Freeport and Newmont Licensed to Export Concentrate
The government has granted concentrate export licenses to a total of eight mining companies: Freeport, PT Newmont Nusa Tenggara, PT Sebuku Iron Electric Ores, PT Lumbung Mineral Sentosa, PT Smelting, PT Sumber Baja Prima, PT Kapuas Prima Coal, and PT Megatop Inti Selaras.
Many have been critical of this decision however, as it contradicts Law No. 4 of 2009on Minerals and Coal (Minerals Law). Arief Puyuono, the Coordinator of the People’s Coalition to Defend the Three Competencies (Trisakti) and the Nine Agenda (Nawacita), asserted that the Mineral Law had prohibited the export of concentrate since 12 January 2014.
5. Exemptions to the Mandatory Letter of Credit (L/C) Policy
At the beginning of April, the Ministry of Trade agreed to exempt oil and gas export activities from the mandatory use of L/C. This move was a response to the Ministry of ESDM’s request that the oil and gas sector be waived from the L/C obligation set out under Minister of Trade Regulation No. 4 of 2015,which came into force on 1 April 2015.
6. Mahakam Block Shares Divided Up
As we headed towards the middle of the year, the long debate over the Mahakam Block shares finally drew to a conclusion with the government officially announcing how the Mahakam Block shares were to be divvied out. In the event, 70% of the block was granted to Pertamina, while the remaining 30% was granted to Total E&P Indonesia and Inpex Corp.
7. Leniency Regarding the Mandatory Utilization of Rupiah
The issuance of Bank Indonesia (BI) Regulation No. 17/3/PBI/2015,which mandates for the use of the rupiah in all transactions, was met with an exemption request by the Ministry of ESDM. The Ministry of ESDM was eventually granted permission from BI to continue to use foreign currency for the construction of infrastructure for oil and gas, electrical power, renewable energy and energy-conservation (energi baru, terbarukan, dan konservasi energi - EBTKE).
BI eventually granted the request after taking the readiness of businesses, as well as the continuity of their business operations into account. BI stated at the time that the immediate implementation of the mandatory-utilization-of-rupiah policy without a sufficient transition period would have a severe negative effect on businesses.
8. Ministry of ESDM Office Shot at
An unknown assailant opened fire on the office of the Ministry of ESDM’s Directorate General of Electricity during 2015. Fortunately, the fourth-floor target was empty when the shooting occurred, as it was the staff’s lunch hour at the time. Widhyawan Prawiraatmadja, Special Staff at the Ministry of ESDM and a regular user of the office in question, expressed his belief that the perpetrator was most likely connected to parties that felt aggrieved by ongoing efforts to reform the institution.
9. Freeport Scandal
In the middle of November, Minister Sudirman Said report the speaker of the House of Representatives, Setya Novanto, to the House Ethics Council (MKD) for allegedly invoking the president’s name while also demanding a tranche of Freeport shares. As a result of all of this intrigue, Novanto ended up relinquishing his position as speaker of the House.
10. Cost Recovery Disputes Lead to Arbitration
SKK Migas requested assistance from the Attorney General before deciding to appeal to international arbitration as regards oil-and-gas cost-recovery differences. According to SKK Migas findings, many cost-recovery issues have arisen, mostly relating to issues of taxation. SKK Migas is concerned however that a lack of competent personnel could result in them losing the case and being forced to cover all of the arbitration expenses.
(rfs/sp)
2015 has proved to be a particularly controversial year for the sector and has been marked by a cabinet reshuffle, the appointment of Maroef Sjamsoeddin (former Vice-Chair of State Intelligence Agency/BIN) to the position of President Director of Freeport Indonesia, as well as the recent scandal involving Setya Novanto (the former Speaker of the House of Representatives).
Hukumonlinehas compiled a list of the ten most important events that hit the energy-sector headlines during 2015.
1. Dismissal of the Vice-Chair of the Oil and Gas Specialized Working Unit (SKK Migas)
The start of 2015 was marked by the issuance of Minister of Energy and Mineral Resources (ESDM) Decree No. 0041K/73/MEM/2015. This decree resulted in Johannes Widjonarko being dismissed from his position as the Vice-Chair of SKK Migas.
Prior to the Decree, Mr. Widjonarko had been appointed as the Acting Chair of SKK Migas, replacing Rudi Rubiandini, who was under investigation by the Corruption Eradication Commission (KPK) in a bribery case.
2. Former BIN Executive Appointed Freeport Head
Maroef Sjamsoeddin, former Vice-Chair of BIN, was appointed Freeport’s President Director, replacing Rozik B. Soetjipto, who has now retired. The appointment has proved controversial however, as many believe that the installation of Mr. Sjamsoeddin will lead to major losses for Indonesia.
3. Establishment of the Gas-Policy Roadmap
There was good news too though when the government officially launched the gas-policy roadmap,which sets out a series of objectives that stretch all the way to 2030. Under the roadmap, the government laid out several major gas projects, such as the construction of a number of liquid natural-gas (LNG) and compressed natural-gas (CNG) refineries and their distribution networks. The government is also aiming to increase the total length of the country’s gas-pipeline network, as well as build an LNG regasification terminal, a number of gas-fueling stations, and several residential gas networks.
4. Freeport and Newmont Licensed to Export Concentrate
The government has granted concentrate export licenses to a total of eight mining companies: Freeport, PT Newmont Nusa Tenggara, PT Sebuku Iron Electric Ores, PT Lumbung Mineral Sentosa, PT Smelting, PT Sumber Baja Prima, PT Kapuas Prima Coal, and PT Megatop Inti Selaras.
Many have been critical of this decision however, as it contradicts Law No. 4 of 2009on Minerals and Coal (Minerals Law). Arief Puyuono, the Coordinator of the People’s Coalition to Defend the Three Competencies (Trisakti) and the Nine Agenda (Nawacita), asserted that the Mineral Law had prohibited the export of concentrate since 12 January 2014.
5. Exemptions to the Mandatory Letter of Credit (L/C) Policy
At the beginning of April, the Ministry of Trade agreed to exempt oil and gas export activities from the mandatory use of L/C. This move was a response to the Ministry of ESDM’s request that the oil and gas sector be waived from the L/C obligation set out under Minister of Trade Regulation No. 4 of 2015,which came into force on 1 April 2015.
6. Mahakam Block Shares Divided Up
As we headed towards the middle of the year, the long debate over the Mahakam Block shares finally drew to a conclusion with the government officially announcing how the Mahakam Block shares were to be divvied out. In the event, 70% of the block was granted to Pertamina, while the remaining 30% was granted to Total E&P Indonesia and Inpex Corp.
7. Leniency Regarding the Mandatory Utilization of Rupiah
The issuance of Bank Indonesia (BI) Regulation No. 17/3/PBI/2015,which mandates for the use of the rupiah in all transactions, was met with an exemption request by the Ministry of ESDM. The Ministry of ESDM was eventually granted permission from BI to continue to use foreign currency for the construction of infrastructure for oil and gas, electrical power, renewable energy and energy-conservation (energi baru, terbarukan, dan konservasi energi - EBTKE).
BI eventually granted the request after taking the readiness of businesses, as well as the continuity of their business operations into account. BI stated at the time that the immediate implementation of the mandatory-utilization-of-rupiah policy without a sufficient transition period would have a severe negative effect on businesses.
8. Ministry of ESDM Office Shot at
An unknown assailant opened fire on the office of the Ministry of ESDM’s Directorate General of Electricity during 2015. Fortunately, the fourth-floor target was empty when the shooting occurred, as it was the staff’s lunch hour at the time. Widhyawan Prawiraatmadja, Special Staff at the Ministry of ESDM and a regular user of the office in question, expressed his belief that the perpetrator was most likely connected to parties that felt aggrieved by ongoing efforts to reform the institution.
9. Freeport Scandal
In the middle of November, Minister Sudirman Said report the speaker of the House of Representatives, Setya Novanto, to the House Ethics Council (MKD) for allegedly invoking the president’s name while also demanding a tranche of Freeport shares. As a result of all of this intrigue, Novanto ended up relinquishing his position as speaker of the House.
10. Cost Recovery Disputes Lead to Arbitration
SKK Migas requested assistance from the Attorney General before deciding to appeal to international arbitration as regards oil-and-gas cost-recovery differences. According to SKK Migas findings, many cost-recovery issues have arisen, mostly relating to issues of taxation. SKK Migas is concerned however that a lack of competent personnel could result in them losing the case and being forced to cover all of the arbitration expenses.
(rfs/sp)