Minister issues regulation on management of state properties in upstream activities

Minister of Energy and Mineral Resources Ignasius Jonan had on August 9 issued Ministerial Regulation No 51/2017 on governance and management of properties belonging to the state in upstream oil and gas activities.

The ministry said in a statement that the new regulation aims to help ensure effective, efficient and integrated management of properties belonging to the state to increase cost recovery efficiency of goods used in upstream activities.

The new regulation among others details the procedure for oil and gas contractors in procuring the properties (outside land and building) such as capital goods for upstream operations including through import; the management of those properties; storing and maintenance; transfer to other or new contractors including those applying or switching to the new gross split production sharing contract; and supervision aspect.

The regulation, for instance, requires oil and gas contractors to submit report on their requirements for state properties (BMN) to upstream oil and gas authority for approval. This include plan for the import of the goods. The contractors are required to prioritize the use of existing properties, and will be allowed to purchase them, either in the domestic market or via import if the required properties are not yet available.

Editing by Reiner Simanjuntak