New Licensing Provisions for Oil-and-Gas Business Activities
With the ultimate aim of improving both the investment climate and productivity within the oil-and-gas sector, the Ministry of Energy and Mineral Resources has recently issued Regulation No. 29 of 2017 on the Licensing of Oil-and-Gas Business Activities. In essence, this regulation simplifies the licensing mechanism for the oil-and-gas sector and sets out several provisions which relate to license types, requirements for securing licenses, license validity periods and so forth.
New Provision for Parties to Working Mining Contracts
The Ministry of Energy and Mineral Resources has issued Regulation No. 28 of 2017, which amends Ministry Regulation No. 05 of 2017 on the Enhancement of the Added Value of Minerals Through Domestic Mineral Processing and Refinery Activities. This amendment redefines the transitional provision, specifically as it related to mining-business form conversion.
Recovery of Investment Costs During the Cooperation-Contract Transition Period for Upstream Oil-and-Gas Activity
Following the introduction of the Gross-Split Production Sharing Contract scheme, the Ministry of Energy and Mineral Resources is continuing to issue guidelines relating to the scheme, which is set to gradually replace the existing Cost-Recovery scheme. This time, the Ministry has issued Regulation No. 26 of 2017, which mainly addresses details relating to the recovery of contractors’ investment costs within working areas, should the government choose to apply the Gross-Split scheme.
Govt. Simplifies the Distribution of Gas Fuels for Transportation Purposes
For the purpose of accelerating the conversion from oil fuel to gas fuel, the Ministry of Energy and Mineral Resources has issued Regulation No. 25 of 2017 on the Acceleration of the Use of Gas Fuel for Road Transportation Purposes. This new regulation addresses several matters, including the gas-fuel distribution roadmap, the appointment mechanism, distributors, incentives, supervision measures and prohibitions upon state/regionally owned enterprises and businesses as regards the provision and distribution of gas fuels
Provisions on the Reconciliation, Depositing and Reporting of Geothermal Production Bonuses Further Regulated
The Ministry of Energy and Mineral Resources has issued Regulation No. 23 of 2017 on Procedures for the Reconciliation, Depositing and Reporting of Geothermal Production Bonuses, which is an implementing regulation to the provisions originally set out under Government Regulation No. 28 of 2016 and which relates to the following matters: 1) Annual geothermal steam and/or electrical-power production plans; 2) The imposition and calculation of geothermal production bonuses; 3) The reconciliation of production-bonus calculations; 4) The determination of production-bonus amounts and deposits; and 5) Mandatory reporting.
General Plan for National Energy
In order to implement Article 12, paragraph (2) and Article 17, paragraph (1) of Law No. 30 of 2007 on Energy, the Government has just issued Presidential Regulation No. 22 of 2017 on General Plan for National Energy. In essence, the General Plan for National Energy sets out a blueprint for the realization of National Energy Policy objectives and for the achieving of national energy independence and security by 2050. This blueprint mainly comprises of five sections, specifically: (1) Introduction; (2) The current condition of national energy policy and future expectations; (3) Vision, mission, purpose and objectives for national energy policy; (4) Policy and strategy for the national energy management; and (5) Closing remarks.
Draft Bill on Water Resources
The House of Representatives is currently in the process of discussing the Draft Bill on Water Resources in response to Constitutional Court Decision No. 85/PUU-XI/2013, which declared Law No. 7 of 2004 on Water Resources to be null and void. The Draft Bill is aiming to update the umbrella arrangement for the management of water resources, which currently falls under the obsolete Law No. 11 of 1974 on Water. Containing a total of 50 articles, the Draft Bill in general addresses the following matters: rights over water resources, the authority and responsibilities of the government, water-resource management measures, financing for water-resource management, rights, the obligations and roles of communities, coordination of water-resources management, the investigation of water-resource related crimes.
New Procedures and Pricing Guidelines for the Utilization of Coal for Power Plants and for the Purchase of Excess Power
The government’s efforts to optimize Indonesia's electrification ratio continues. This time through the issuance of Ministry of Energy and Mineral Resources Regulation No. 19 of 2017 on the Utilization of Coal for Power Plants and the Purchase of Excess Power. The regulation sets out a more efficient procedure and pricing mechanism for PT PLN and operators of mine-mouth and non-mine-mouth power plants. The regulation also redefines basic provisions on the procedure for the purchase of excess power from holders of operational licenses who generate power for their own use
New Regulation on the Indirect Utilization of Geothermal Energy
Government Regulation No. 7 of 2017 on the Indirect Utilization of Geothermal Energy has just been issued and implements several articles originally set out under Law No. 21 of 2014 on Geothermal Energy. The regulation stipulates a wide range of provisions which relate to the indirect utilization of this resource in order to produce electrical power, including the government’s authority as regards the indirect utilization of geothermal energy, working areas and their offerings, geothermal utilization activities, the rights and obligations of geothermal license holders, geothermal supporting businesses, geothermal pricing, geothermal data and information, and relevant development and supervision measures.
Guidelines for the Granting of IUPK OPs to Holders of KKs or PKP2Bs
The Ministry of Energy and Mineral Resources (“Ministry”) has issued Regulation No. 15 of 2017 on Procedures for the Granting of Special Mining Business Licenses for Production Operations as a Continuation of Contracts of Work or Coal-Mining Business Working Agreements. The regulation addresses procedures and requirements for converting Contracts of Work (KK) or Coal-Mining Business Working Agreements (PKP2B) into Special Mining Business Licenses for Production Operations (IUPK OP)