Minerals Report - International Seabed Authority
Minerals Report - International Seabed Authority Minerals Report - International Seabed Authority
Processing of products is subject to another contract, but the contractor agrees to refine 28.57 % of its share of crude oil in Indonesia. If there is no such refining capacity in Indonesia, then the contractors agree, “to set up a corresponding refining capacity for that purpose” under the following conditions: Pertamina has first requested contractor thereto, The contractor portion of crude oil is not less than.... barrels per day (negotiable); and If both parties think that such refining capacity is economical. Otherwise, the contractor may make an equivalent investment in another project related to petroleum or petrochemical industries in Indonesia. Indonesian Participation: Pertamina has the right to demand 10 % of undivided interests in the contract for itself or for other Indonesian interests (Indonesian participants). This is intended to give opportunity to Indonesian companies to take share in the exploitation of oil and gas production. This right shall lapse after 3 months of the discovery of petroleum in the contract area if Pertamina does not use this option. If Indonesian participant uses this option, he/she/it will be offered standard operating agreement and if he/she/it does not accept the offer within 6 months, the contractor is released from the obligation to offer participation to Indonesian participants. If Indonesian participant acquires the 10% undivided interests, he/she/it will reimburse the contractor 10 % of the operating costs which the contractor has so far spent, 10 % of the compensation paid initially to Pertamina for information, and 10 % of the amount paid to Pertamina for equipments and services during the first contract year. The Indonesian participant has the option to reimburse the same amount, either: a) in cash within 3 months; or b) by way of a “payment out of production” of 50 % of his production entitlement under the contract, equal in INTERNATIONAL SEABED AUTHORITY 866
total to 150 % of the said amount commencing as from the first date of the production. Operating Cost: “Operating cost” would include current year noncapital costs which can include operations, office services and general administration, production drilling, exploratory drilling, surveys, other exploration expenditures and training. It would also include current year’s depreciation of capital costs, such as construction utilities and auxiliaries, construction of housing and welfare, production facilities and moveables. Current year allowed recovery of prior year’s unrecovered operating cost may also be included. Depreciation of capital costs are divided into 3 groups, depending on expected useful life of the capital goods, namely group 1 = 50 %, group 2 = 25 %, and group 3 = 10 %. Interest on loans and insurance premium and fees as well as all expenditures incurred in the abandonment of all exploratory wells and the restoration of the drilling sites may also be recoverable as operating costs. This amount however is paid every year to Pertamina on the basis of calculation of costs and the lifespan of the project or installation. 6. Conclusions The Indonesian mining legislation treats oil and gas somewhat differently from the hard minerals. While the exploration and exploitation of oil and gas are largely based now on production sharing system, the exploration and exploitation of hard minerals is still largely based on licensing system, in which the licensed mining companies are obliged to pay mining fees and tax/ royalties to the Government. This difference is basically because it is relatively easier to delineate the oil and gas reserve and resources in comparison with delineation of the hard mineral reserves and resources, particularly deep underground. The production sharing system in Indonesia has given quite a substantial power to the Government or the President to participate in the management of oil and gas as well as in the oil company (Pertamina). There INTERNATIONAL SEABED AUTHORITY 867
- Page 824 and 825: to the data when an area is relinqu
- Page 826 and 827: CHAPTER 20 STATUS REPORT ON THE DAT
- Page 828 and 829: All the above-mentioned minerals oc
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- Page 832 and 833: As far as the Government is concern
- Page 834 and 835: • Ordinance number 195, of Decemb
- Page 836 and 837: This tax must be paid up to January
- Page 838 and 839: the one whose burning is authorised
- Page 840 and 841: ANP may send a representative to fo
- Page 842 and 843: esources other than oil or natural
- Page 844 and 845: to the safety of persons and animal
- Page 846 and 847: found offshore Brazil. With regard
- Page 848 and 849: een discovered in the basin, includ
- Page 850 and 851: enhance oil recovery. He said that
- Page 852 and 853: g. Ordinance number 10 that regulat
- Page 854 and 855: He said that the environment has to
- Page 856 and 857: ids. These comprised five Brazilian
- Page 858 and 859: After oil exploration gained moment
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- Page 862 and 863: and replaced by the President, and
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- Page 870 and 871: The contractor will recover all ope
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- Page 876 and 877: are more than 30 articles in the va
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- Page 880 and 881: Ambassador Djalal informed particip
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- Page 884 and 885: said that the remainder of the prod
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- Page 888 and 889: A participant wanted to know whethe
- Page 890 and 891: of CCOP/SOPAC was to promote and de
- Page 892 and 893: STAR was founded in 1985 in collabo
- Page 894 and 895: Since 1972, SOPAC has, on behalf of
- Page 896 and 897: France Seapso 1985-1986 Cook Is, Fi
- Page 898 and 899: polymetallic massive sulphides. The
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- Page 902 and 903: Figure 2: Location Map of Known Pol
- Page 904 and 905: is currently no regional agency tas
- Page 906 and 907: The types of data that have been in
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- Page 910 and 911: SOPAC’s continuing and relentless
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- Page 914 and 915: REFERENCES 1. D. Tiffin and C Matos
- Page 916 and 917: 18. J. Malnic. (1999). Marine Miner
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total to 150 % of the said amount commencing as from the first date of the<br />
production.<br />
Operating Cost: “Operating cost” would include current year noncapital<br />
costs which can include operations, office services and general<br />
administration, production drilling, exploratory drilling, surveys, other<br />
exploration expenditures and training.<br />
It would also include current year’s depreciation of capital costs, such<br />
as construction utilities and auxiliaries, construction of housing and welfare,<br />
production facilities and moveables. Current year allowed recovery of prior<br />
year’s unrecovered operating cost may also be included.<br />
Depreciation of capital costs are divided into 3 groups, depending on<br />
expected useful life of the capital goods, namely group 1 = 50 %, group 2 = 25<br />
%, and group 3 = 10 %. Interest on loans and insurance premium and fees as<br />
well as all expenditures incurred in the abandonment of all exploratory wells<br />
and the restoration of the drilling sites may also be recoverable as operating<br />
costs. This amount however is paid every year to Pertamina on the basis of<br />
calculation of costs and the lifespan of the project or installation.<br />
6. Conclusions<br />
The Indonesian mining legislation treats oil and gas somewhat<br />
differently from the hard minerals. While the exploration and exploitation of<br />
oil and gas are largely based now on production sharing system, the<br />
exploration and exploitation of hard minerals is still largely based on licensing<br />
system, in which the licensed mining companies are obliged to pay mining<br />
fees and tax/ royalties to the Government. This difference is basically because<br />
it is relatively easier to delineate the oil and gas reserve and resources in<br />
comparison with delineation of the hard mineral reserves and resources,<br />
particularly deep underground.<br />
The production sharing system in Indonesia has given quite a<br />
substantial power to the Government or the President to participate in the<br />
management of oil and gas as well as in the oil company (Pertamina). There<br />
INTERNATIONAL SEABED AUTHORITY 867
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