26 May 2009, Lobby Lounge,Grha Bimasena

Bimasena, the Mines and Energy Society in cooperation with Forum Hukum Energi (FHE) held on Bimasena Energy Law Forum on 26 May 2009 at The Grand Ballroom,The Dharmawangsa, with the theme: “ISSUES AND CHALLENGES IN THE CONTROL AND SUPERVISION OF UPSTREAM OIL AND GAS ACTIVITIES THROUGH PRODUCTION SHARING CONTRACTS (PSC)”

A survey conducted by an independent public accountant firm in late 2008, showed that the problems that made the oil and gas sector unattractive to investors were the uncertainties of the production sharing contract and the cost recovery, intervention by government institutions other than the Department of Energy and Mineral Resources, and the guarantee of asset security.

On the other hand, the Government wants to better control and supervise the oil and gas upstream sectors. Suspicion on the misuse of cost recovery and the drive to limit cost recovery due to current State Budget provisions are among the main reasons that have forced the government to issue a number of new regulations to revise the existing contractual arrangements under the Production Sharing Contract (PSC), and ultimately result in a greater intervention by the government on the PSC arrangements, including interventions by the State Audit Board and the Directorate General of Taxation.

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