Minerals Report - International Seabed Authority
Minerals Report - International Seabed Authority Minerals Report - International Seabed Authority
Ambassador Djalal informed participants that lately a lot of groups within the country have submitted legislation to change this situation. He said that the prevalent opinion is that the Government has far too great a role in Pertamina, and that Pertamina’s monopoly of the oil and gas industry has to be reduced. He pointed out that since most of the producing fields are located in Indonesia’s provinces, another development has been that the provinces are requesting a larger share of the revenues accruing from oil and gas production. Ambassador Djalal said that the new legislation that has been passed by Parliament gives the provinces fifteen per cent of the oil revenues, and thirty per cent of the gas revenues. He pointed out however that the provinces have asked for a larger share. He further pointed out that the President of Indonesia, when asked by representatives of the provinces at a recent news conference in North Sumatra, his opinion of the appropriate share for the provinces, he responded that the provinces could get seventy-five per cent of the revenues if that was their wish. Ambassador Djalal said that this statement has created a tremendous problem in the country at the present time. He noted that with a law having been passed in Parliament on the appropriate share for the provinces, the statement of the President has created problems for the central Government. Additionally, Ambassador Djalal noted that the central Government has further problems with the provinces since another law has been enacted giving provinces authority over natural resources within twelve miles of their respective coastline. Ambassador Djalal said that this drastic new law is scheduled for implementation in two years, after regulations to implement it have been developed. He informed participants that when the draft law was submitted to the Ministry for Oceans Exploration and Fisheries, the Ministry advised Parliament that the Ministry would support the devolution of power to the provinces, in only three areas. These were for coastal zone management, control of land-based sources of pollution, and protection of traditional fishermen and fisheries. Ambassador Djalal said that the Parliament of Indonesia, being very apprehensive of regionalism and of discontent in the provinces, where people were claiming various rights in Parliament, or on the streets of Djakarta and in the media, somehow agreed to give the provinces the authority over natural resources within the twelve-mile zone. He said that this law has resulted in some of the provinces claiming rights over oil and natural gas resources within twelvemiles of the coastlines. He said that in one instance, a province is now requesting control over oil and gas, and all other resources within the 200- INTERNATIONAL SEABED AUTHORITY 872
mile economic zone. He described this development as scary for both the central Government and the business community, particularly the oil and gas industry. He said that with twenty-six provinces in Indonesia, if each decided to create its own legislation, confusion would be the order of the day. He said that the central Government is engaged in discussions with provincial Governments that this is not the way to proceed. He noted that while the central Government wanted to give a lot of power and authority to the provincial Governments, this desire did not include creating confusion in the economy as a whole. In relation to the Government of Indonesia’s regulations of 1974 (Law number 17/1974), Ambassador Djalal said that it is clearly stated that Pertamina and contractors have to submit an annual programme of work. He said that if the annual programme of work is not submitted, there would be consequences faced by the contractor. In addition, he said that an operational programme has to be submitted three months before the year of operation. In this regard, he said that all data, samples, maps, reports and other documents that are produced for an area, are considered as Government property, and must be submitted to the Director-General of Oil and Gas. He said that contractors are allowed to send samples for investigation abroad following approval of a request, by the Director-General. Additionally, Ambassador Djalal said that contractors must cooperate with Government Inspectors, including providing access to their activities and installations, and providing explanations to questions that the Government might have. Ambassador Djalal noted that under this regulation, in specified offshore areas, no exploration or production is allowed, that contractors have an obligation to prevent pollution, and to completely dismantle disused installations. He emphasized that this third obligation has become a big problem in Indonesia because the law is not clear about the party that has to undertake dismantling. He noted that currently there are about 400 offshore installations in Indonesian waters. He said that some of them with twentyyear life spans have been in Indonesian waters for over twenty-five years. He projected that next year there would be about 18 to 20 disused installations. He said that the Government has been engaged in determining who would dismantle these installations and at what cost. Ambassador Djalal stated that the problem arose because initially, in their eagerness to ensure that the INTERNATIONAL SEABED AUTHORITY 873
- Page 830 and 831: e water depths between 400 and 1,00
- 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
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- 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
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- Page 856 and 857: ids. These comprised five Brazilian
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- Page 862 and 863: and replaced by the President, and
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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
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mile economic zone. He described this development as scary for both the<br />
central Government and the business community, particularly the oil and gas<br />
industry. He said that with twenty-six provinces in Indonesia, if each decided<br />
to create its own legislation, confusion would be the order of the day. He said<br />
that the central Government is engaged in discussions with provincial<br />
Governments that this is not the way to proceed. He noted that while the<br />
central Government wanted to give a lot of power and authority to the<br />
provincial Governments, this desire did not include creating confusion in the<br />
economy as a whole.<br />
In relation to the Government of Indonesia’s regulations of 1974 (Law<br />
number 17/1974), Ambassador Djalal said that it is clearly stated that<br />
Pertamina and contractors have to submit an annual programme of work. He<br />
said that if the annual programme of work is not submitted, there would be<br />
consequences faced by the contractor. In addition, he said that an operational<br />
programme has to be submitted three months before the year of operation. In<br />
this regard, he said that all data, samples, maps, reports and other documents<br />
that are produced for an area, are considered as Government property, and<br />
must be submitted to the Director-General of Oil and Gas. He said that<br />
contractors are allowed to send samples for investigation abroad following<br />
approval of a request, by the Director-General. Additionally, Ambassador<br />
Djalal said that contractors must cooperate with Government Inspectors,<br />
including providing access to their activities and installations, and providing<br />
explanations to questions that the Government might have.<br />
Ambassador Djalal noted that under this regulation, in specified<br />
offshore areas, no exploration or production is allowed, that contractors have<br />
an obligation to prevent pollution, and to completely dismantle disused<br />
installations. He emphasized that this third obligation has become a big<br />
problem in Indonesia because the law is not clear about the party that has to<br />
undertake dismantling. He noted that currently there are about 400 offshore<br />
installations in Indonesian waters. He said that some of them with twentyyear<br />
life spans have been in Indonesian waters for over twenty-five years. He<br />
projected that next year there would be about 18 to 20 disused installations.<br />
He said that the Government has been engaged in determining who would<br />
dismantle these installations and at what cost. Ambassador Djalal stated that<br />
the problem arose because initially, in their eagerness to ensure that the<br />
INTERNATIONAL SEABED AUTHORITY 873
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