New Oil and Gas Equity Share, Golden Indonesia 2045 Roadmap, Carbon Trading Starts Tomorrow, Unraveling Revised E-Commerce Regulation
Sep 25, 2023
Gov’t to Allow Equity Over 50% For Oil And Gas Block Contractors
The Indonesian government is to allow oil and gas block contractors to have more than 50 percent equity in high-risk blocks, in a move to attract more oil and gas investment in the country, as 68 of Indonesia’s 128 hydrocarbon basins are unexplored, said Minister of Energy and Mineral Resources Arifin Tasrif.
Indonesia aims to increase production from its rich gas reserves while it still can, especially as global investors are starting to shift away from fossil fuel use. The government is in the final stages of revising regulations to offer more attractive terms and conditions for block contractors, including the equity split between the government and contractors in high-risk blocks.
Alongside the equity shares, the government is also offering additional incentives including a 10 percent first tranche petroleum (FTP – the percentage that should be deducted from gross production before cost recovery), a signature bonus open bid, the flexibility to choose between the cost recovery or gross split production sharing contract (PSC) schemes, and elimination of cost ceilings for cost recovery, Director of Upstream Oil and Gas Business Development Noor Arifin Muhammad said.
KADIN Outlines Roadmap for Golden Indonesia 2045 Vision
Indonesian Chamber of Commerce and Industry (KADIN) Chairman Arsjad Rasjid presented the KADIN Roadmap to Achieve Golden Indonesia 2045 Vision to President Joko Widodo during an appreciation night in the new Nusantara capital city (IKN), on Sep 22. The Vision aims to transform the nation into a developed economy by 2045.
The government will use the Roadmap as guidelines to achieve the Golden Indonesia 2045 Vision and escape the middle income trap, amid the development of the new capital and other vital projects, President Widodo said.
The Roadmap outlines four priorities for Indonesia: increasing food and health security; increasing prosperity by developing industrial downstreaming and digitizing micro, small, and medium-sized enterprises; raising inclusivity through the promotion of gender equality and the empowerment of marginalized groups; and achieving sustainability through decarbonization and environmental protection.
Mars launched The Big Build, the world's largest single coral reef restoration, on July 11-14, in partnership with island communities, conservationists, researchers, universities, governments, NGOs and businesses.
Through The Big Build, Mars and its partners planted 30,000 coral fragments using 2,000 Reef Stars in four days in the waters of Bontosua Island, Pangkep Regency, South Sulawesi Province. This is a form of affirmation that to realize restoration, it cannot be separated from collaborative efforts between parties.
The planting of tens of thousands of coral fragments is an initiative from Mars to help accelerate business aspirations to restore more than 185,000m2 of coral reefs in locations around the world by 2029.
Indonesia is one of the countries focusing on coral reef recovery efforts, and for more than a decade, Mars has partnered with island communities and others to restore coral reefs.
The Big Build is an initiative in response to the world’s urgent coral crisis, which scientists estimate will wipe out 90 percent of ocean coral cover by the 2040s. It comes after Mars made progress on its Sheba Hope Grows coral reef restoration in 2021.
Fish populations depend on the presence of coral reefs. If most of them are destroyed, the consequences will be devastating for coastal-island communities whose livelihoods depend on marine products. Mars is implementing The Big Build in response to the ocean crisis at hand.
Indonesia’s carbon exchange is scheduled to be launched by President Joko Widodo tomorrow, Sept 26. The Indonesia Stock Exchange (BEI) has already been appointed by the Financial Services Authority (OJK) to organize the carbon exchange, in line with Financial Services Authority Regulation (POJK) 14/2023 and OJK Circular Letter (SEOJK) 12/2023 on Carbon Trading through Carbon Exchange.
The launch will be followed by a carbon trading simulation by BEI. While registration for the inaugural carbon trading will also be opened tomorrow, eligible users will be able to establish their accounts on Friday.
Other high-profile government officials such as Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan, Minister of Environment and Forestry Siti Nurbaya Bakar, and OJK Board of Commissioners Chief Mahendra Siregar are also scheduled to attend the launch.
Unraveling the Revised E-Commerce Regulation With the Ministry of Trade
AmCham Indonesia and other foreign chambers met with Isy Karim, Director General of Domestic Trade on Sept 13 at the Ministry of Trade’s office, to discuss the revision of Minister of Trade Regulation 50/2020 on e-commerce.
The regulation prohibits foreign merchants from selling any goods valued below $100 to Indonesian customers directly via online marketplaces, as well as banning the use of social media platforms to sell goods. It aims to address concerns over protecting micro, small, and medium-sized enterprises (MSMEs) from predatory pricing through e-commerce platforms, Karim said.
The discussion sought updates on the revision progress and an understanding of how the government will implement the $100 ban and govern social-commerce. The Ministry expects to issue the revision very soon, with the harmonization process at the Ministry of Law and Human Rights having been completed.
Industry has urged the government to conduct extensive public consultations with stakeholders to ensure effective regulation which fosters a globally competitive, innovative, and sustainable e-commerce environment, while addressing potential unintended consequences of the draft revision.
We appreciate the engagement with Director General Isy Karim and his team, and look forward to further discussions.
US Federal Government Heads Toward Shutdown
The US federal government is heading closer to shutdown as the US Congress, divided along partisan lines in both the House of Representatives and the US Senate, has not passed funding legislation which is essential to run key government agencies and provide federal employees’ salaries. US government funding expires at the start of the federal fiscal year, on Oct 1.
Under the US State Department’s 2022 shutdown plan, US embassies and consulates will remain operational, with passport and visa processing lasting as long as there are sufficient funds, but some foreign aid programs and nonessential official travel are at risk of running out of funds.
Federal workers in sectors deemed essential such as transportation, health, and law enforcement will continue to operate with some delays and partial furloughs. Agencies such as the Federal Reserve, US Postal Service, Internal Revenue Service, and Social Security Administration will continue business-as-usual, as they do not depend on Congressional funding. Others, including the Department of Education, Federal Emergency Management Agency, and National Aeronautics and Space Administration, are at risk of massive furloughs and delayed funding.
Stay safe, call a doctor if you have a high fever, cough, or difficulty breathing. Stay healthy above all else.
AmCham Update is AmCham's regular newsletter on developments related to the pandemic crisis and other issues in Indonesia. It is edited by AmCham Managing Director A Lin Neumann and written by the AmCham Staff. Paul L Goddard.