President SBY : No Need to Worry, All Applicable Contract Permanent BP Migas

President SBY the responses Court verdict against BP Migas, at the Presidential Office on Wednesday (14/11) evening. (photo: abror / presidensby.info)

Jakarta: No need to worry, all agreements and contracts that have created the Executive Agency for Upstream Oil and Gas Business or BP Migas apply. "All work and activities as a form of cooperation oprasional BP Migas with investors continue to run as it should.'s No need to worry," said President Susilo Bambang Yudhoyono in a press conference following the decision of the Constitutional Court (MK) were dissolved BP Migas, in the Office of the President, Jakarta, Wednesday (14/11) evening.

In its decision on 13 November at 11.00 am, the Court assessed the presence of BP Migas has no legal provisions. President SBY see the implications this decision has created, which has raised concerns from many quarters about legal certainty and predictability of policies and regulations issued this country.

"If it is almost certainly not the business of any of the actors did not dare to undertake investments. If this is not soon I ambilalih, the issue of uncertainty could disrupt the actual investment climate today is in better condition," Yudhoyono said.

The President said that the issue is very sensitive, vulnerable, and easily lead to uncertainty in our country. "So the government obey the Court's decision to run had to implement rapid action, and regulation was issued because there should not be a single day of a vacuum," the President said.

President also explained that the demand for the production of domestic oil and natural gas continue to rise. "Going forward, the government will continue to increase the production capacity of oil and gas, especially gas," said the Head of State.

"The solution we tingakatkan ekspolarsi oil and gas, the investment should be good, it must be clear rules and who manage," the President added.

On this occasion, the President also invited investors from within the country to invest in various fields, in this case oil and gas, "Come to invest in our own country, because if not, certainly the economic power will not grow very well," said President .

"The time has come to increase investment in the country, we've got MP3EI. I invite SOEs and private, national and local, come build the economy in this country," Yudhoyono told.

At the end of his speech, the President reiterated there should be no anxiety over the dissolution of BP Migas. "I hope all those who are anxious and considers no more certainty in the investment climate in this country, I say do not like it," the President stressed. (Source: www.presidenri.go.id)

Government Keeping the Constitutional Court Questions Liquidation BP Migas

President SBY the responses Court verdict against BP Migas, at the Presidential Office on Wednesday (14/11) evening. (photo: abror / presidensby.info)

Jakarta: Government to obey the decision of the Constitutional Court (MK) related dissolution of Business Executive Agency for Upstream Oil and Gas (BP Migas). The President himself has issued a Presidential Decree (Decree) number 95 in 2012 to prevent a vacuum in the upstream oil and gas.

President Susilo Bambang Yudhoyono expressed this in a press statement responding to the decision of the Constitutional Court, at the Presidential Office on Wednesday (14/11) evening. The President vowed to obey the decision of the Constitutional Court which assesses the presence of BP Migas as having no legal provisions.

"I have no commentary, opinion, or analysis of anything except running with all my heart what has been the decision of the Court," the president said. Since no decision of the Court, further SBY, has developed a number of issues, including concerns from many quarters.

Government should immediately take the necessary measures in response to the decision of the Court and assuage growing concerns by issuing Presidential Regulation. 95 in 2012. This rule is intended to prevent the vacuum while providing certainty for the upstream oil and gas industry.

"In a regulation that I have published, in principle, we specify that the former BP Migas in this transition, as well as the decision of the Court, its position is under the Minister of Energy and Mineral Resources," the President explained.

"I've also ordered the Minister to audit, prior to fully live what BP Migas," Yudhoyono said.

Regarding anxiety former employee of BP Migas, the President said they remained in position, "Unless the position associated with the dissolution of BP Migas. Clerks and other employees remain in position and fixed function, can not be stopped," said SBY.

"Do not need no discomfort, activity will continue to refer the decision of the Constitutional Court, the government will carry out its obligations, especially in this period of transition until all seusatunya no better position," the President said.

Also present at the press conference by Vice President Boediono, Coordinating Minister for the Economy Hatta Rajasa, State Secretary Sudi Silalahi, Wacik Minister and Cabinet Secretary Dipo Alam. (Source: www.presidenri.go.id)

Mahfud MD: BP Migas Narrated Dismissed from Court Decision

Chairman of the Constitutional Court (MK) Mahfud MD

JAKARTA - Chairman of the Constitutional Court (MK) Mahfud MD said Implementing Agency Oil and Gas (BP Migas) disbanded since the judge read the verdict of Act No. 22 of 2001 on Oil and Gas.

"Since at 11.00 am, Tuesday (13/11/2012) disbanded and all regulatory functions moved to the Ministry of Energy," said Mahfud, here on Tuesday.

For business contracts in progress and made with BP Migas, said Mahfud, valid until the end of contract. "Or in effect until a new agreement was held," said Mahfud.

As is known, the Constitutional Court decided that section governs the duties and functions of the Executive Agency for Oil and Gas (BP Migas) is regulated in Law Number 22 of 2001 on Oil and Gas contrary to the 1945 Constitution and has no legal binding.

"The functions and duties of the Executive Agency of Oil and Gas implemented by the Government, represented by the Ministry concerned, until the enactment of the new law governing it," said Chief Justice Mahfud MD, when reading the verdict testing oil and gas law on Tuesday.

The Court stated the phrase "by the Executive Agency" in Article 11 paragraph (1), the phrase "through the Executive Agency" in Article 20 paragraph (3), the phrase "based on consideration of the Executing Agency and" in Article 21 paragraph (1), the phrase "Board Implementing and "in Article 49 of the Gas Act 1945 and contrary to the Constitution has no binding legal effect.

"The whole thing is related to the Implementing Agency in Oil and Gas Company Act and contrary to the 1945 Constitution has no binding legal force," said Mahfud.

The Court also stated Article 1 paragraph 23, Article 4 paragraph (3), Article 41 paragraph (2), Article 44, Article 45, Article 48 paragraph (1), Article 59 sub-paragraph a, of Article 61, and Article 63 against the Oil and Gas Law 1945 Constitution and have no binding legal effect.

Subject to the decision of the Constitutional Court

In response to the decision of the Constitutional Court, the Coordinating Minister for Economic Affairs (Minister) Hatta Rajasa said, "The decision of the Constitutional Court asked the Ministry of Energy to continue to perform the functions that existed at BP Migas, so that the inherent perminyakaan industry should still be running, therefore meeting had decided not to be a vacuum, because there must be legal certainty. "

Hatta said the government would have to submit to the decision of the Court because the Court's decision is final and binding binding, therefore Coordinating Minister Hatta Rajasa further, the Court's decision could be the basis of our legal framework to remove the product immediately the law so that all functions can continue to run in under the Ministry of Energy.

"The important thing for us is, there can be no doubt, there should be no legal vacuum, all must go, these functions have to keep going, because the investment climate we have to keep our guard, we are committed to continuously improving our production, our oil and gas and managing our upstream sector, exploration and production in accordance with the goals and objectives that have been defined, "added Minister.

Decision of the Constitutional Court did not affect the Minister for contracts that have been made. "Everything is still running, there is not anything that resulted in doubts, companies which still runs as it should, still producing, still legal, because there is not anything cause they can not be stopped and stalled efforts to continue the exploration and production," Hatta added.

In line with the Minister of Economy, Minister of Energy and Mineral Resources stated, "All the functions available on the BP Migas returned to the Ministry of Energy and Mineral Resources, so the function. So everything works as before. All existing contracts to run as usual, I'm Sharing Contract calm, as usual, only the functions that control BP Migas just going back to the Minister of Energy and Mineral Resources ".

Court Decision Affects Oil and Gas Contract Status

Decision of the Constitutional Court (MK) that the presence of BP Migas unconstitutional taken lightly Head of BP Migas, R. Priyono. Priyono, where BP Migas is a mandate of reform set out in the Gas Act number 20 of 2001.

"If you want to return to the pre-reform, yes please," said Priyono told reporters on Tuesday (13/11), in the complex of the MPR / DPR, Senayan Jakarta.

Court decision could have an impact on a variety of foreign work contracts in the mining sector. Priyono stated investment in oil and gas sector could be deemed invalid illegal alias. "The impact of the signed contract to BP Migas is not legal," said Priyono.

When asked who the party can change the position of  BP Migas in various mining contracts, Priyono said they did not know. Priyono invited reporters to the question submitted to the Minister of Energy and Mineral Resources, Wacik.

In the same place Wacik claimed to have read the whole decision of the Constitutional Court about BP Migas. Jero said the government has not been able to take decisions related to the Constitutional Court.

While a government will consider investing in the oil and gas sector that adds state finances. "We must examine all the possibilities for the interests of the country. We do not want to rush to speculate," said Jero. (Source: Kompas.com / www.esdm / republika.co.id)

The Minister of EMR Asked Investors to Develop Renewable Energy

NUSA DUA, BALI – The increase of Indonesian economic growth affected to the increase of energy needs, no exception to gas. In front of the participants of Gas Information Exchange in Asia Pacific (GASEX 2012) from 15 countries, Minister of Energy and Mineral Resources (Minister of EMR) asked investors to start investing for renewable energy (RE) development and emphasized that domestic gas need will always be the main priority.

“There are three things we should kept because it was predicted to be scarce; first, foods availability, second, energy availability and last water availability. All countries have to calculate the energy availability in the country and what could they contribute to the world,” said Jero Wacik, Tuesday (9/10/2012).

Indonesian economy grows well. Every year we grow for more than 6%, a growth we should thanked to. It is not easy to a country to grow more than 6%. Indonesia worked hard for it and cooperated with investors who investing their money in Indonesia, so we achieved the growth of 6, 4%, 6, 5%, 6,3% every year. The economic growth and improvement affected to energy needs. Indonesia energy needs will absolutely follow the economic growth itself such as electricity need, gas need and others continuously increase, so we invite you all and companies to invest in Indonesia.

“Indonesia has almost all the world resources. Lately, the world concerns and investors interests to invest in Indonesia are greater. Some months ago, we held Indonesia Petroleum Association Conference concerning oil and gas. The participants of the conference were from all over the world. There was a huge exhibition, showing that oil and gas industries in the world seriously concerned and invested in Indonesia. Some months ago, in this room, I inaugurated the Coaltrans Asia Conference attended by coal buyers, sellers, and miners,” said the minister.

He also added that, “Today is gas meeting. The committee reported that there are more than 500 foreign participants of 15 countries. It shows that Indonesia potency in gas becoming the world concern. Next week, there will be international meeting in Bali concerning electricity. We exported the most of Indonesian gas due to the fact that we did not need it much, we were hypnotized by oil and we still have abundance oil,”

He also stated that, “However, past gone by because now, oil decreases, so our gas need increases for electricity, industry, and also for motor vehicles. It brings consequence for gas sales.”

“For me as the Indonesia Minister of EMR and also for Energy Ministers all over the world, the state interests is number one priority. Gas, coal and other energies we produce should first dedicate to Indonesia interests. Surely that we would not break the existing contracts, we will always strengthen the partnership with all energy and mineral resources investors all over the world. We will discuss it well if any basic changes happen to investment climate in Indonesia.

He gave example, gas exploration mining in Tangguh Papua managed by British Petroleum (BP), Train 1 and 2 have produced 100%; some exported to Fujian and some exported to Sempra America. 100% of export, like I already explained, by having recent need, I negotiated with BP. I explained how Indonesian need of gas and I am delighted because BP understood the situation and they would like to revise the existing agreement. Absolutely it is for Indonesia interests and to keep or BP train 1 and 2 interest. BP has allocated to Indonesia for 230 million cubic feet per day and now train 3 is prepared. I am delighted to know that train 3, BP will mention in the new contract that 40% of the gas production is for Indonesia domestic need.

“Foreign companies accept advantages, but Indonesia and Indonesia interest have to be our interests,” said the minister. “Now, it’s time for us to think the solution how to overcome the gas need of other countries if we need more for domestic. Surely that we plan to develop the renewable energy, we have abundance geothermal energy potency. The existence program is Fast Track Program 10.000 MW. The other renewable energies we want to develop are hydropower, solar power, and biomass, said the minister.

The minister also explained about the relationship between RE and gas, “If renewable energy development does not succeeded, sorry to say that we have to utilize gas production we usually exported to be utilized for domestic needs. We will also prioritize coal for domestic need. However, if renewable energy development succeeded, surely that the gas production could be exported even if there are more gas discoveries, there will be more gas to export.”

“I am sure that investors will continuously come to Indonesia. We widely open our hand to you all. It’s time for you all to invest more in Indonesia. Go to develop renewable energy and invite your friend to invest in Indonesia. I believe that wee will succeeded to develop RE because I facilitate it, then gas export could be increased,” said the minister. (EMR/AK)

Parliament and Indonesia Government Agree on Gas Lifting Amounting 2013 2.260 Thousand BOEPD

Illustration: House of Representatives of the Republic of Indonesia (DPR RI) at Senayan, (Photo Doc/THNews)

JAKARTA (Telukharunews) - Meetings of the Commission VII of the House of Representatives with the Ministry of Energy, Monday (10/9) afternoon, agreeing lifting gas in 2013 amounted to 2.26 million draft budget BOEPD (barrels of oil equivalent per day), consisting of lifting 900,000 barrels of oil per day and lifting gas 1.36 million barrels of oil equivalent per day.

The meeting led by the Chairman of Commission VII Sutan Bhatoegana, also agreed to Indonesia Crude Price (ICP) U.S. $ 100 per barrel.

This is in accordance with the Financial Memorandum speech read by President Susilo Bambang Yudhoyono, August 16, 2012.

Minister Jero Wacik explained on that occasion, oil and gas production continued to decline since 1996, and is expected to reach its lowest point in 2012 and 2013. Increased production will start to happen in 2014, mainly from the Cepu Block. Gas production will also start to increase in 2013.

If combined, the oil and gas production in 2013 will reach 2.26 million barrels of oil equivalent per day in 2014 amounted to 2.393 million barrels of oil equivalent per day and 2.57 million barrels of oil equivalent in 2015.

While the Indonesian crude oil price projections (ICP) in 2013, based on world oil prices tended to increase in the first quarter of 2012, but it tends to fall at the beginning of the second quarter of 2012 as a result from the easing of tensions in the Middle East and the U.S. economic recovery. In the third quarter of 2012, world oil prices have increased again because of worsening geopolitical situation in the Middle East.

In addition, the oil price forecast in 2013 is also based on various sources of WTI, and Brent Reuters ranging from U.S. $ 65-140 per barrel.

"We calculated that if taking the number 100 as a basic assumption (oil prices) will be safe enough to face the world oil price shocks in the future. Course, we can not guarantee it will for sure (ICP) in the 100 because it concerns the world and us," he said .

However, he added, according to the Ministry of Energy, ICP of U.S. $ 100 per barrel, be accountable to the basic assumptions of 2013.

Parliament and Government also agreed on the volume of fuel and fuel subsidies amounted to 46.01 million KL, consisting of premium / bioethanol KL 29.20 million, 1.70 million KL of kerosene and diesel / biodiesel 15.11 million. 3 kg LPG agreed as 3.86 million tons.

As for biodiesel subsidies, agreed Rp 3,000 per liter. Bioethanol subsidies Rp 3,500 per liter.

LGV was agreed subsidy of Rp 1,500 per liter and Alpha fuel subsidy of Rp 642.64 per liter by ICP assumption of U.S. $ 100 per barrel and the exchange rate of Rp 9,300 per liter. (EMR)

BPMIGAS-Kangean Compensated Use The Forest

Jakarta (Telukharunews) - BPMIGAS with Kangean Energy Indonesia Ltd.., Agreed to do the replacement land compensation for the use of forest land for oil and gas upstream activities in operating Kangean, East Java (East Java). Deputy Chief BPMIGAS, J. Widjonarko symbolically give the official handover of land to the Director General of Forestry Planning, Ministry of Forestry, Bambang Soepijanto in Jakarta, Tuesday (11/9). Present at the occasion, Executive Vice President Kangean, Kumada Hitoshi and Head of Forestry, East Java, Gatot Subektiono.

Land area of ​​59 hectares located in the Village handed Throughout, District Sapeken, Sumenep, East Java. Compensation of land is one of the fulfillment of the obligation for license holders lend use forest areas to provide and give the land rather than the forest. With complete compensation for land, BPMIGAS will ask permission lend use forest areas for exploitation of oil and gas to the Minister of Forestry. "Hopefully license may be issued soon," said Widjonarko.

He explains, many oil and gas upstream activities are conducted in the forest area. BPMIGAS contracts and contractors are committed to obey and carry out all duties in accordance with applicable regulations. On the other hand, the acceleration of the licensing process is expected.

 "Characteristics of the upstream oil and gas industry are capital-intensive, technology, and high risk need legal certainty," he said.

Bambang appreciate BPMIGAS and Kangean step. According to him, these efforts demonstrate the seriousness BPMIGAS aturannyang obey applicable. He said he is committed to support the efforts being made to increase the production of oil and natural gas nationwide. In addition to energy needs, this sector has become one of the largest contributor to state revenues.

"We are open to feedback for improvement. Do not let the existing regulations discourage investment, "he said adding that the Ministry hopes that oil companies pay attention to the environment. (bpmigas)

External factors Dominance Constraints Oil and Gas Exploration

Photo illustration of one of the locations of oil wells in the working area of Pertamina EP Pangkalansusu (Photo THNews)

JAKARTA - External factors such as licensing, overlapping land, compensation and other social issues found to be the most dominant constraint in the implementation of the exploration of oil and gas upstream. This is evident from the results of the evaluation conducted by the Executive Agency for Upstream Oil and Gas (BP Migas) to the Production Sharing Contract (PSC Contractor) exploration exploration certainly has not fulfilled commitments.

Of the total of 121 contractors KKS exploration period exceeds 3 years, there were 69 contractors who do not meet the KKS definite commitment. "Based on the mapping done by BPMIGAS, the external factors remain major obstacles experienced by 69 contractors working area exploration," said Deputy Chief J. BPMIGAS Widjonarko when opening Farm In-Out Forum 2012 in Bali, Friday (7/9).

Constraints such as licensing, overlapping, and others, occurred in at least 33 percent of 69 exploration contractors who do not meet exploration commitments. At the same time, these contractors also face more than one obstacle.

To help overcome these constraints PSC exploration, plainly year BPMIGAS form PSC Operator Work Area Forum Operations (FOKWE). Licensing and Social Committee, which is one FOKWE committee has made several attempts to overcome these obstacles, among others, in the administration of strategizing and organizing extent permitted sharing session on security and social issues involving multiple contractors KKS considered successfully address issues related to these issues. Containers discussion is expected to provide inspiration for other KKS Contractor experienced the same problems.

Risk Sharing

In addition to external constraints, the second highest constraint is internal constraints KKS Contractor itself, such financial problems and the operatorship. Constraints occurred in 24 percent of 69 exploration contractors who do not meet definite commitment exploration.

Internal constraints are related to the nature of the upstream oil and gas industry is a capital intensive industry and high risk. Therefore some PSC has the intention to offer its shares to the other party to share the risk.

Widjonarko said the existing provisions, both in government regulations or in contracts, KKS Contractor has the right to share the risk with others. "However, based on the rules, during the first 3 years PSC should not be transferred operatorship and remain a major interest holder," said Widjonarko. He added, BPMIGAS support KKS Contractor during the risk-sharing rules.

In order to facilitate the PSC to share the risk of holding Farmout BPMIGAS Forum 2012 which is one of the strategic programs FOKWE. This forum is a forum to bring together the PSC Contractor will perform farm out the PSC Contractor or prospective investors who are interested in farm. A total of 22 contractors who are looking for investors to open a booth to present its jurisdiction in this forum.

Widjonarko affirming all efforts to expedite exploration activities to be supported as the fulfillment of exploration commitments will ultimately increase national oil and gas reserves and production. (EMR)