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ARTICLE · 20 FEBRUARY 2016

New Indonesian Regulation On Expiring PSCs

Oentoeng Suria & Partners
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The Indonesian Minister of Energy and Mineral Resources ("Minister of Energy") has issued the much anticipated regulation on the expiry of Indonesian Production Sharing Contracts ("PSCs").

IndonesiaEnergy and Natural Resources
Ratih (Ipop) Nawangsari
Ratih (Ipop) Nawangsari

The Indonesian Minister of Energy and Mineral Resources ("Minister of Energy") has issued the much anticipated regulation on the expiry of Indonesian Production Sharing Contracts ("PSCs").

1. OPTIONS POST PSC EXPIRY

Minister of Energy Regulation 5/2015 (the "Regulation") contemplates three options for operation of a contract area following the expiry of the current PSC:

  1. management of operations to be carried out by PT Pertamina (Persero) ("Pertamina");
  2. extension of the PSC granted to one or more of the existing PSC Contractors; or
  3. joint operations between Pertamina and one or more of the existing PSC Contractors.

If the Minister of Energy does not approve any of the options in (a) to (c) above, the Regulation provides for the offer of the relevant contract area through a bid process.

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