Regional administrations can seek a stake in PSCs, mining contracts

Regional administrations can carry out upstream and downstream activities in the oil and gas sector by acquiring working interest in existing production sharing contract (PSC) areas or by signing contracts with the upstream oil and gas authority, BPMigas, for new PSC areas, Minister of Energy and Mineral Resources Purnomo Yusgiantoro said Monday.

Purnomo said that provincial administrations, through their business companies, can buy a 10 percent participating interest in the government?s portion in any contract area as it is allowed by the current oil and gas law, Purnomo told a parliamentary hearing.

?In order to maintain a conducive investment climate, any working interest transfer must get prior approval from the central government,? the minister told a parliamentary hearing.

Purnomo added that provincial administrations could also acquire a disposal stake in mining companies in accordance with the current mining law.

In 2001, Indonesia promulgated a new oil and gas law to follow up on the implementation of regional autonomy laws. (godang)