Minerals Report - International Seabed Authority

are more than 30 articles in the various Laws and Regulations that empower
the Government / the President to deal with the Pertamina affairs.
Consequently, after the political change in Indonesia recently, there is a strong
opinion in the society to eliminate or reduce the power of the Government or
the President in the oil and gas industries as well as the near monopoly of
Pertamina in the oil and gas business. But substantial amount of opinion also
opposes this new trend, primarily based on practicalities and national needs.
In fact, the production sharing contract as well as the previous
arrangement has brought substantial benefits to all parties. From 1996 to
1999, the contractor has obtained a total of 14 % of the net gross revenue /
production for the recovery of their costs and capitals, 19 % for profit / rate of
return to their investments, while 67 % of the revenue / production has gone
to the Government of Indonesia directly deposited by the contractors.
Pertamina retains 5 % of the Government share, deducted by 60 % for tax,
thus a net of 2 % from the total Governmental receipt.
During the life of the contract within the last several decades of the
various companies operating in Indonesia, the oil and gas companies have
generally complied with their obligations and the cooperation with Pertamina
the Indonesian Government have generally been useful and profitable.
Currently, some 50 oil companies, including most of the world’s biggest and
prominent companies are operating in more than 170 production sharing
contract areas in Indonesia, onshore and offshore. In general, offshore
mineral exploration and exploitation have been generally smooth and
relatively freer from problems and conflicts, including provincial / regional,
compared to exploration and exploitation of minerals, liquid and hard,
onshore.
This paper does not deal with:
Joint Development Zone or Zone of Cooperation, although Indonesia
does have substantial experience in this field in the Timor Gap Agreement
between Indonesia and Australia. Although the possibility for Joint
Development Zone concept may exist in the future for the border area
between the national jurisdiction and the international seabed area, for the
moment the possibilities may appear still remote.
INTERNATIONAL SEABED AUTHORITY 868