January 24, 2019 / 11:59 AM / 4 months ago

TABLE-Indonesia's draft oil and gas law reveals sector overhaul

    JAKARTA, Jan 24 (Reuters) - Indonesia's government is
expected soon to meet with parliament to discuss a long-awaited
revision to its 2001 law on oil and gas, after a push by
President Joko Widodo for the revision.
    Below is a table of several of the proposed changes in a
draft of the oil and gas law reviewed by Reuters, and a
comparison with current rules:

 Proposed revision              Current law
 Special oil and gas agency     Government acts as regulator
 (BUKMigas) will have           
 authority over the sector      
 BUKMigas must be formed        Not regulated
 within one year of new law     
 being issued at latest, prior  
 to which SKKMigas will         
 continue to function as        
 upstream regulator             
 BUKMigas will have authority   Separate upstream (SKKMigas)
 over upstream and downstream   and downstream (BPHMigas)
 oil and gas sectors            regulators
 BUKMigas may undertake         Upstream activities are
 upstream activity including    undertaken by state or private
 oil and gas exploration and    companies based on contracts
 exploitation                   with upstream regulator
 BUKMigas may also work in      
 partnership with oil and gas   
 Contractors must propose       Not regulated in current law,
 extensions 8 years before      but under recent regulations
 contracts expire at latest     contractors can propose
                                extensions 10 years before
                                contracts expire at soonest and
                                2 years before contracts expire
                                at latest
 BUKMigas is responsible for    Current law does not assign
 development of refineries and  responsibility to regulatory
 can cooperate with state       agencies to develop
 enterprises or other           infrastructure
 companies for this purpose     
 Downstream oil and gas         No difference to current law,
 regulator (BPHMigas) will      but unclear if BUKMigas and
 supervise supply and           BPHMigas authority over
 distribution of fuel and gas   downstream will overlap
 transported by pipeline        
 Government sets oil and gas    Oil and gas contractors must
 export policy and quotas       deliver up to 25 pct of
 after meeting domestic demand  production to meet domestic
 Oil and gas imports and        Government decides on imports
 exports controlled by          and export quotas and policy
 BUKMigas                       but this is not regulated under
                                oil and gas law
 Energy Ministry and BUKMigas   Not regulated
 manage petroleum fund          
 transparently and accountably  
 in one bank account            
 Petroleum fund will be used    Not regulated
 to compensate exploration      
 activities; pay for            
 infrastructure development     
 and for research and           
 development for oil and gas    
 Petroleum fund will be paid    Not regulated
 for by taking percentages of   
 government share of            
 production, bonuses received   
 by government, levies imposed  
 by government                  
 (Reporting by Wilda Asmarini; writing by Fergus Jensen; editing
by Christian Schmollinger)
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