Govt sets new limit on foreign-flagged oil, gas vessels

Government has issued a regulation that will allow certain foreign-flagged oil, gas vessels to operate within Indonesian water until 2015.

Under the Ministry of Transportation Decree No.48 2011 which was issued last week, foreign flagged vessels permit to operate in Indonesia will be phased-out in stages according to the vessels types.

Under the decree, foreign-flagged drillships are allowed to operate in Indonesia water until December 2015 while seismic; geophysics and geotechnical survey vessels will be allowed to operate until December 2014.

Foreign ?flagged offshore construction support vessels such as derrick/crane, pipe, cable , sub-sea umbilical riser flexible lay barges/vessels will be allowed to operate until December 2013 while diving support vessels will be allowed to operate until December 2012.

The current Shipping Law obliges all shipping activities within Indonesia water be carried out by Indonesian-flagged vessels, or popularly known as cabotage principle. The Cabotage rule, however, has threatened upstream oil, gas industry which rely heavily on foreign-flagged vessels.(*)