The oil-and-gas sector has become highly volatile over the course of the past five years due to the ongoing instability in global oil prices. In mid-2008, prices hit USD 145 per barrel, however this high then collapsed by over 70% to eventually slump to only USD 40 per barrel by the end of the year following the global financial crisis. A ray of hope returned a number of years later as the sector was buoyed up by emerging-market confidence, boosting crude-oil prices to an average of approximately USD 94 - USD 98 per barrel (West Texas Intermediate – WTI) between 2011 and 2014. However, prices collapsed once again to below USD 40 per barrel at the beginning of 2016.[1]
 
This global trend is having a direct impact upon Indonesia and its emerging economy. Investment within the country’s oil-and-gas sector reached USD 22.2 billion in 2015 and increased slightly to USD 23.9 billion in 2016. However, the industry’s contribution to state revenue dropped from 14% in 2014 to only 4.5% in 2015.[2] The stubbornly low sale price of crude oil has meant that businesses operating within this important sector have had to think twice in terms of their engagement in new exploration and exploitation activities, as high production costs will be difficult to sustain at current oil prices.
 
For its part, the Indonesian Government has come up with a number of new measures aimed at reducing the impact of this downwards global trend, as well as hopefully stimulating investment within the oil-and-gas sector. Just a couple of months ago, the government introduced its new cooperation scheme for oil-and-gas contractors, specifically the new gross-split production-sharing contract scheme.[3] In terms of licensing, the Ministry also issued Regulation No. 29 of 2017on the Licensing of Oil-and-Gas Business Activities (“Regulation 29/2017”). Regulation 29/2017 simplifies the regulatory framework which addresses the various licenses required by business entities or contractors engaging in upstream oil-and-gas activity (“Contractor”), which was previously spread across a number of regulations (collectively referred to as “Former Regulations”), specifically: