The Industry

Laws and Regulations

Indonesian law stipulates by law that the extraction of the nation’s oil and gas resources must be done in a manner that produces the maximum benefit and income for the state, and contributes to the greatest prosperity of the people.

To this end, the Indonesian Government developed the Indonesian Production Sharing Contract (PSC), which was introduced in 1966 and has since been adopted by many other oil producing countries in various modified forms.

Under the Production Sharing Contract, foreign companies explore, develop and market resources under the general supervision of BPMIGAS. Exploration costs borne by the foreign companies are recovered when commercial production is established. The remaining oil and gas produced is then shared between BPMIGAS and its partner.

The key to the contract is the ‘production sharing’ concept. The investor does not share the profits of venture, but shares the production.

The PSC has evolved through a number of generations in line with the Indonesian Government's belief the importance of assuring a reasonable rate of return to investors in the face of an ever-changing business environment.

  • Press Conference - Minister of Trade : Letter of Credits [01/04/2015] 
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  • Minister of Trade Regulation No. 26 Year 2015 [30/03/2015] 
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  • Minister of Finance Republic of Indonesia Regulation No 267/PMK.011/2014 [31/12/2014] 
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  • Minister of Finance Republic of Indonesia Regulation No 218/PMK.002/2014 [05/12/2014] 
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  • Regulation of the Minister Energy and Mineral Resources No. 31 Year 2013 [24/10/2013] 
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  • Presidential Regulation No. 9 Year 2013 [10/01/2013] 
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  • Regulation of Minister Man Power and Transmigration No. 19 Year 2012 [19/11/2012] 
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  • Minister of Finance Republic of Indonesia Regulation No 27/PMK.011/2012 [07/03/2012] 
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  • Presidential Regulation No. 95 Year 2012 [13/11/2012] 
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  • Presidential Instruction No 2 of 2012 [10/02/2012] 
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  • Bank Indonesia Regulation No 13/20/PBI/2011 [30/09/2011] 
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  • Minister of Finance Republic of Indonesia Regulation No 256/PMK.011/2011 [28/12/2011] 
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  • Minister of Finance Republic of Indonesia Regulation No 257/PMK.011/2011 [28/12/2011] 
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  • Minister of Finance Republic of Indonesia Regulation No 258/PMK.011/2011 [28/12/2011] 
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  • PP 79 Year 2010 on Cost Recovery [30/12/2010] 
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  • Minister of Transportation Regulation No 73/2010 [26/11/2010] 
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  • Regulation of the Minister of Finance Number 24/PMK.011/2010  [05/05/2010] 
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  • Regulation of the Minister Energy and Mineral Resources No. 22 Year 2008 [30/06/2008] 
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