oportunities for policy regulation

1. POLICY, REGULATION AND OPPORTUNITIES
ON UPSTREAM SECTOR
DIRECTORATE GENERAL OF OIL AND GAS
MINISTRY OF ENERGY AND MINERAL RESOURCES
REPUBLIC OF INDONESIA
LONDON, 11 OCTOBER 2010

2. OUTLINE
 POLICY AND REGULATION
 CURRENT CONDITION
 BUSINESS OPPORTUNITIES
 CONCLUSION

3. POLICY AND REGULATION

4. TARGET OF ENERGY MIX
(Presidential Regulation No. 5 of 2006)
Primary Energy Mix 2006 Energy Mix 2025
Hydro Power
3.11%
Geothermal Gas Oil
Gas & CBM
1.32% 28.57% 20%
30%
Biofuel 5%
Geothermal
NRE,17% 5%
Biomass, Nuclear,
Hydro Power, Solar,
Oil
Wind Power 5%
51.66%
Liquefaction Coal
Coal 2%
15.34%
Coal 33%
Energy Elasticity = 1,8 Energy Elasticity < 1
NON FOSSIL ENERGY < 5% NON FOSSIL ENERGY/
New & Renewable Energy: 17 %

5. POLICY AND TARGETS
OF INDONESIA OIL & GAS MANAGEMENT
PETROLEUM POLICY TARGETS FOR 2025
 Oil and Gas Supply Security
 Maintain oil production level of
 Oil And Gas Utilization 1 Million BOPD
 Oil and Gas Pricing Policy
 Unconventional Oil and Gas Business  50% national operatorship
 Conservation Of Oil and Gas
Production  Security of domestic Fuel Supply
 Increasing National Capacity In Oil
and Industrial Feedstock
And Gas Industry
 91% local content (goods and
FUEL POLICY services)
 Fuel Supply Security
 99% skilled national workforce
 Fuel Categorization
Pricing Policy

 Achieving oil and gas safety, zero
 Fuel Diversification accidents, zero failure, and
 Fuel Standard and Quality achievement of zero flares, and
 Fuel Efficiency zero waste

6. REGULATION
• Oil and Gas Law Number 22 Year 2001
• Republic of Indonesia Government Regulation
Number 35/2004 on Oil and Gas Upstream
Business Activities as amended in Government
Regulation Number 34/2005 and in
Government Regulation Number 55/2009.

7. SOME REGULATIONS
TO INCREASE OIL AND GAS
EXPLORATION AND PRODUCTION
1. MEMR DECREE No. 01 Year 2008 concerning Guidance on Oil
Mining Business Activities for Old Well
2. MEMR DECREE No. 03 Year 2008 concerning Guidance for Idle
Field to be Developed
3. MEMR DECREE No. 35 Year 2008 concerning Stipulation And
Offering Of Oil And Gas Working Acreages
4. MEMR DECREE No. 36 Year 2008 concerning Coalbed
Methane Business Activities
5. MEMR DECREE No. 06 Year 2010 concerning Guidance to
Increase Oil & Natural Gas Production Policy

8. FISCAL INCENTIVES
In order to increase oil and gas production, The Government Of
Indonesia (GOI) provided fiscal incentives by issuing three
Ministerial Decrees, which are:
 Regulation of the Minister of Finance Number 177/PMK.011/2007
exemption of import duty on goods imported for the purpose of
upstream oil and gas and geothermal business activities.
 Regulation of the Minister of Finance Number 179/PMK.011/2007
tariff of import duty on imported drilling platforms or floating or sub-
sea production facilities.
 Regulation of the Minister of Finance Number 24/PMK.011/2010
value added tax on imported goods for upstream oil and gas and
geothermal exploration activities, will be paid by the GOI in fiscal year
2010.

9. CURRENT CONDITION

10. INDONESIA’S OIL AND GAS RESERVE
(STATUS: JANUARY 1, 2009)
NAD
121.01 NATUNA
5.55
112.43 346.42
1.26 52.14
NORTH SUMATRA
4,026.67 745.11
21.78 43.11 PAPUA
10.57
BORNEO MOLUCCAS 89.64
CENTRAL SUMATRA
23.71
902.42 51.95
SOUTH SUMATRA 17.74 2.68 15.22
WEST JAVA
CELEBES
570.66 EAST JAVA
3.68 987.01
5.30
NOTE: GAS RESERVE (TSCF) OIL RESERVE (MM Barrel)
PROVEN = 107.34 TSCF PROVEN = 4,303.10 MM Barrel
113.34 OIL RESERVE
POTENTIAL = 52.29 TSCF POTENTIAL = 3,695.39 MM Barrel
1.27 GAS RESERVE
TOTAL = 129.63 TSCF TOTAL = 7,998.49 MM Barrel

11. SELECTED LIST OF OIL AND GAS
OPERATORS IN INDONESIA
1. AMERADA HESS (INDONESIA-PANGKAH) LTD. 22. LUNDIN B.V
2. APEX (BENGARA II) LTD. 23. MATRIX OIL ( ASAHAN ) PTY. LTD.
3. B.G INTERNATIONAL LIMITED 24. MEDCO E&P INDONESIA
4. BP INDONESIA 25. MOBIL LANGSA INC.
5. CHEVRON PACIFIC INDONESIA 26. PERMINTRACER PETROLEUM LTD.
6. CNOOC SOUTHEAST SUMATRA LTD. 27. PETROCHINA INTERNATIONAL
7. CONOCOPHILLIPS 28. PETRONAS CARIGALI BERHAD LTD.
8. COSTA INTERNATIONAL GROUP LTD. 29. PETROSELAT LTD.
9. ENERGY EQUITY EPIC 30. PREMIER OIL NATUNA SEA, BV.
10. ENI INDONESIA LTD. 31. SANTOS
11. EXXONMOBIL OIL INDONESIA, INC. 32. SELE RAYA MERANGIN DUA
12. GOLDEN SPIKE SOUTH SUMATRA LTD. 33. SHELL COMPANIES IN INDONESIA
13. IMR - PETRONUSA BUMIBAKTI 34. SINOPEC INTERNATIONAL PETROLEUM
14. INDO-PACIFIC RESOURCES (JAVA) LTD 35. STAR ENERGY (KAKAP) Ltd.
15. INPEX CORPORATION 36. TALISMAN ASIA LTD.
16. KALREZ PETROLEUM SERAM LTD. 37. TITAN RESOURCES (NATUNA) INDONESIA LTD
17. KODEKO ENERGY CO LTD. 38. TOTAL E & P INDONESIE
18. KONDUR PETROLEUM S.A. 39. VICO INDONESIA
19. KOREA NATIONAL OIL CORPORATION (KNOC) 40. YPF JAMBI MERANG
20. KUFPEC ( INDONESIA ) LTD. 41. ZODAN N.V.
21. LASMO (MALAGOT) LTD. 42. ZUDAVI N.V.

12. CBM BASIN IN INDONESIA
Total CBM Basin = 11
(Advance Resources International, Inc., 2003)

13. INDONESIA COALBED METHANE CONTRACT AREA
status: June 2010
 7 CBM Contracts signing in year 2008:  3 CBM Contracts signing in  5 CBM Contracts signing  5 CBM Contracts signing
Mei 2009: in August 2009: in November 2009:
1) Sekayu 5) Barito Banjar I 8) Ogan Komering 11) Tanjung Enim 16) Batangasin
2) 13Bentian Besar 6) Barito Banjar II 9) Sangatta II 12) Ogan Komering II 17) Muara Enim
3) Indragiri Hulu 7) Sangatta I 10) Tabulako 13) Pulang Pisau 18) Rengat
4) Kutai 14) Barito Tapin 19) Sanga-Sanga
15) Kotabu 20) Barito

14. ROAD MAP OF CBM DEVELOPMENT
PP: CBM – 1 Existing Oil & Gas Estimated CBM
Rambutan acreage be prioritized Estimated CBM Production Production
(GOI Sponsor
) to develop CBM 1.0 BcfD 2.0 BcfD
PP CBM: – 2,3 Estimated CBM
(private investment) Production ~ 1.8 BcfD
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Increasing number of CBM Development Contract
Average production = 250 MSCFD/well
Legend:
Issuing of regulation to Government participation
promote CBM (for Oil & Project evaluation
Gas and Coal Mining) Start of Commercial Era
CBM production
Start of CBM era
(1st CBM Contract) PP : Pilot Project
Estimated Production

15. OPPORTUNITIES

16. INDONESIA PETROLEUM FIRST BIDDING ROUND
YEAR 2010

17. 1st Bidding Round Schedule
A. Direct Proposal (Closed)
Access bid Document : 12 July 2010 – 24 August 2010
Clarification Form : 19 July 2010 – 20 August 2010
Submit Participating Document: 25 August 2010, 09.00 AM – 02.30 PM
B. Regular Tender
Access Document : 12 July 2010 – 5 November 2010
Clarification Form : 19 July 2010 – 1 November 2010
Submit Participating Document : 8 November 2010, 09.00 AM – 02.30 PM

18. Plan For CBM Working Acreage
Bidding Round Year 2010

19. CONCLUSION

20. CONCLUSION
1. In order to increase the declining production and the inclining
national oil and gas demand, the Government of Indonesia
issued the policy to push the oil and gas production and
exploration.
2. Based on the National Energy Policy, Indonesia has developed
unconventional gas for national fuel demand.
3. The friend countries are expected to actively participate in
developing the Indonesia’s oil and gas.

21. THANK YOU
www.migas.esdm.go.id