Constitutional Court of Indonesia has dismantled BPMIGAS as the state upstream oil and gas regulator. According to Jakara Post the government is considering transferring the functions of the now-defunct BPMigas to a subsidiary of state energy firm PT Pertamina. It has been reported that all the production sharing contracts signed between BPMigas and oil companies will remain valid.
Bruce Clement, the Managing Director of AWE, one of many foreign companies operating in Indonesia, currently in Jakarta, said that the company has been advised that the existing PSCs will remain intact under the new regulatory regime.
“We anticipate that the Indonesian Government will take immediate steps to ensure the orderly transfer of regulatory responsibility for the upstream oil and gas industry from BPMIGAS to the Ministry of Energy and Mineral Resources.”
“While the change in administration may result in some near term delays in approvals for the AAL development, we do not anticipate any significant issues in the longer term delivery of the project. In the meantime, we will continue to progress with engineering and planning for the AAL oil project and with technical work on our other exploration assets,” Clement said.
AWE operates and participates in a number of Production Sharing Contracts (“PSCs”) in Indonesia that contain exploration and pre-development projects, including the Ande Ande Lumut (“AAL”) oil field.
Offshore Energy Today Staff, November 14, 2012