User talk:Ringki

Indonesia Oil and Gas Framework Indonesian oil and gas are belong to state, and should be utilized for the benefit of the nation. Prior to year 2001, Pertamina, the state-owned oil and gas company, had exclusive rights over the country’s oil and gas industry, including exploration, exploitation, refining, processing, transportation and marketing. However, pursuant to the Oil and Natural Gas Law, which was adopted in 2001, the government ended Pertamina’s monopoly over the oil and gas industry and converted Pertamina from a state-owned monopoly with regulatory authority into a state-owned limited liability company. The purpose of the Law No.22 year 2001 was to accelerate investment, optimize production and increase competition in the distribution and sale of oil and natural gas. To prevent conflict of interest and promote effective control mechanism, Law No.22 regarding oil and gas distributes responsibility of managing oil and gas resources into 3 main body namely the Ministry of Energy and Mineral Resources, cq Directorate General Oil and Gas, known as MIGAS, Upstream Implementing Body (BP MIGAS) and Downstream Regulating Body (BPH MIGAS). MIGAS responsible for formulating national oil and gas policy. The policy is included to create oil and gas master plan, promote innovation on oil and gas sector, etc. MIGAS with input from respective institution decides prospective acreage opened for oil and gas exploration. Prospective acreage offered to investor through competitive bidding mechanism or other mechanism while two independent supervisory agencies, Executive Agency for Upstream Oil and Gas Business Activities (Badan Pelaksana Kegiatan Usaha Hulu Minyak dan Gas Bumi or BPMIGAS), which supervises and controls the upstream oil and gas business activities, and the Oil and Gas Downstream Regulatory Body (Badan Pengatur Kegiatan Hilir Minyak dan Gas Bumi or BPH Migas), which regulates distribution of subsidized petroleum fuels (gasoline 88, kerosene for household, and ADO for transportation) and natural gas transportation through pipeline.

The 2001 law provides greater flexibility to the government in structuring production sharing contracts. Previously, the division of production between the government and private companies was required to comply with statutory requirements, but now the production sharing arrangement can be decided in light of geological conditions of the block covered by the contract. Private companies, including foreign companies, can participate in either exploration and production of oil and gas by entering into production sharing contracts or engaging in downstream business activities. This spirit is reflected in Indonesian regulatory framework.Under the Oil and Gas Law No. 22 of 2001 concerning the management and implementation of the oil and gas business, authority in policy making is vested in the Minister of Energy and Mineral Resources. The policy objective in the management and implementation of the oil and gas business is to give directive and guidelines to the stakeholders.

The Minister EMR through Directorate General of Oil and Gas regulate the both technical aspect and business aspect in the industry. Directorate general of oil and gas determine safety and supporting business regulation. Regulator for fuels and gas transmission through pipeline is under downstream regulatory body (BPH MIGAS) which is responsible to supervise the operation of supply and distribution of petroleum fuel and transportation of natural gas by pipeline. Otherwise, the fuel and gas distributions are governed by the Directorate General of Oil and Gas. The oil and gas industry in Indonesia is classified into two types, namely the core business and the supporting business. The core business consists of upstream and downstream business activities whereas the supporting business includes services and supporting industries.