A Fortnight in Indonesian Oil & Gas – News Summary

Good news for Investors

Indonesia will offer “pioneering” businesses a tax holiday.  Companies interested in investing in the nation’s metal, oil and gas and machine-building industries could receive a full or partial tax break. Companies would have to invest at least Rp 1 trillion ($100 million) and deposit 10 percent of the investment in domestic banks

Indonesia’s resource nationalism

Under this title a long commentary by Sara Stefanini  was published by INTERFAX on 11 July 2013. The author notes that 2012 Mini g law in effect is a reverse of decentralization of regulatory power; while all current policies are moving ahead with resource nationalism and strengthening of control over hydrocarbon exploration and production. These would be the essence of a new oil and gas bill that is supposed to be passed soon. The comment is centered on the recent report by global risk consultancy Maplecroft and provides many factual data.

 

Exciting Story of Mahakam Block

Over these two weeks, a big discussion was going on regarding the issue:

- PT Total E & P Indonesia Mahakam Block suspend development until there is a decision on the extension of government contracts that expire in 2017. Total does not want to take the risk by making investments that are uncertain at the continuation of the contract.

- Total E & P Indonesia proposed to the government to have contract extension with management of the transitional period of five years. Currently the operations have 3,700 work places directly and about 20,000 indirectly – thus termination would result in big economy offset for the country

-  During five-year transition (2017-2022) Pertamina is offered 30% stake with the following breakdown: 35% Total; 35% Inpex and 30% to Pertamina.

 

Chevron Bioremediation

A court convicted a local employee of Chevron of corruption to two years in prison for abuse of authority in connection with a soil cleanup program. The case centers on a so-called bioremediation program at Chevron’s drilling facilities on the island of Sumatra.

  More details in our Corporate Web-page