Throughout 2018, the energy, oil and gas, and mining sectors were characterized by various events that can be viewed from various sides, from corporate actions and strategies to governance and regulation.

The completion of the PT Freeport Indonesia divestment process (PTFI0 at the end of 2018 is the closing news for the year which is appreciated by a number of circles. Inalum on Friday (21/12), officially increased its ownership in PTFI from 9.36 percent to 51 percent by paying US $ 3.85 billion or around IDR 55 trillion and controls the company that owns the Grasberg mine in Papua with a wealth of gold, bronze, and silver of IDR 2,400 trillion until 2041.

Finance Minister Sri Mulyani will try to ensure greater state revenue from PTFI after the process of transferring the majority stake (divestment) to the mining industry holding company PT Inalum (Persero) is complete. The government uses a nail down tax system or a fixed percentage of each tax component to calculate state revenue from the PT Freeport Indonesia mine.

Will only Freeport Indonesia’s shares be the ones that are attractive throughout 2018? Publish What You Pay Indonesia, as quoted from Antara, has several views on the achievements of the energy and minerals sector as one of the evaluations of the cabinet led by President Joko Widodo.

Throughout 2018, the energy, oil and gas, and mining sectors were characterized by various events that can be viewed from various sides, ranging from corporate actions and strategies, governance and regulation, downstream, fiscal and economic, social and environmental aspects, to law enforcement aspects. This sector, which is considered to have a significant influence on macroeconomic conditions, has more or less affected the political temperature and business arena in the country, which of course has a profound impact on the social conditions of society and environmental resilience.

In the aspect of corporate action and strategy, 2018 was marked by a large state-owned corporation structuring incident, in the form of the formation of a national oil and gas holding BUMN played by Pertamina, completion of the Freeport divestment process through the Inalum mining holding BUMN, completion of the renegotiation process and amendments to the Mining Contract of Work or amendments to the Contract. to become a Mining Business License, to the termination, extension, and bid for the Production Sharing Contract using the new Gross Splits scheme.

In terms of governance and regulation, this year an evaluation of the National Movement to Save Natural Resources (GNPSDA) of the KPK in the mining and energy sector, issuance of an integrated licensing system, and mining business supervision, includes a one map policy.

The issuance of a presidential regulation on the principles of recognizing and opening beneficial ownership to prevent corruption and illegal fund flows, issuing several ministerial regulations regulating the oil and gas mining energy sector until the revision of the Oil and Gas and Minerba Law in the DPR RI also decorated the dynamics of the energy sector oil and gas and mining in Indonesia.

Downstream, fiscal and economic industries, this year there is not much progress in the downstream sector and increasing added value in the mineral and mining sectors, as well as the downstream sector which is characterized by the mandatory use of biodiesel containing 20 percent (B20) of CPO. The mandatory expansion policy of the B-20 has not been able to solve the problem of oil palm expansion which is the main cause of deforestation.

From the draft Law on Oil and Gas obtained by Hukumonline, there are a number of regulations relating to downstream oil and gas business activities. At least, the downstream oil business activities include several things, starting from processing, transportation, storage, distribution, and trading. The downstream oil business activities are carried out by State-Owned Enterprises (BUMN), Regional Owned Enterprises (BUMD), national and foreign private enterprises, and/or cooperatives.

Meanwhile, the oil distribution network is controlled by the state. Likewise, the management is carried out by the central government through BUMN in the field of petroleum in its implementation. Now, in carrying out downstream petroleum business activities, it is carried out by business entities that have obtained a business license.

These permits include business permits for processing, transportation/distribution, storage, trade, and export. The business license at least contains provisions on the name of the operator, the type of business granted, the obligation to operate, and other technical requirements. In carrying out activities with a business license in accordance with the provisions in the operation of the downstream petroleum business. In other words, a business license can only be used according to its designation.

Regarding processing activities in the field, transportation, storage, and sale of own production as a continuation of exploration and exploitation carried out by a cooperation contract contractor, it turns out that no own business license is required. The central government in granting commercial business licenses determines the commercial business area for the type of fuel oil in the country.

Meanwhile, the standard, quality, and price of fuel oil and processed products are regulated in sufficient detail. Fuel oil and processed products that are marketed in energy in order to meet the needs of the community must meet the standards and quality, namely as determined by the central government.

The central government regulates and/or sets the same price for fuel oil as it applies to all parts of Indonesia. Meanwhile, in the framework of equal distribution of access to fuel oil, the central government can set incentives for business entities that carry out downstream petroleum business activities, namely in certain areas and their designation for certain groups of society.

Regarding the determination of the price of fuel for all parts of Indonesia, this bill must first obtain approval from the DPR. Then about the price of fuel oil which is allotted for all parts of Indonesia and certain groups of society, namely certain types of oil ingredients. “Except for other processed products,” read the fragment of Article 23 of the Bill.

The draft law also regulates the availability and distribution of fuel oil. The central government through the Special Business Entity (BUK) Oil and Gas (Migas) is obliged to efficiently build the infrastructure for fuel oil refineries until all domestic fuel oil needs are met. In addition, the central government, through BUK, is obliged to provide and smooth the distribution of fuel oil throughout Indonesia.

In the implementation of infrastructure development for fuel oil refineries, it can be carried out by BUMN, BUMD, national private business entities, foreign private enterprises, or cooperatives through a cooperation mechanism with BUK Migas. Fulfilling the need for fuel oil through the construction of fuel refinery infrastructure requires that construction must be completed at least 10 years from the enactment of the Law on Natural Oil and Gas.

In carrying out oil and gas business activities, as well as supporting businesses, BUMN, BUMD, private business entities, and/or cooperatives are required to increase national capacity. This national capacity building is carried out by, first, the use of Indonesian labor by increasing its human resources.

Second, the use of domestic goods, services, technology, and engineering and design capabilities. Third, the use of national banking and insurance. Especially in oil and gas export activities. Fourth, transferring science and technology in the oil and gas sector to partner companies. Fifth, develop the surrounding community. Sixth, the use of Indonesian national standards and the application of national work competency standards. (ANT)


Source: Hukum Online