Contractual Systems in the Oil and Gas Sector: Current Status and Development (original) (raw)
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Compatible Concept of Contract Law with Oil and Gas Production Sharing Contract in Indonesia
IOSR Journal Of Humanities And Social Science (IOSR-JHSS), DOI : 10.9790/0837-2409031021 Series. 3 (September. 2019) 10-21 e-ISSN: 2279-0837, p-ISSN: 2279-0845. www.iosrjournals.org, 2019
The practice of Gross Split and Cost Recovery contracts for oil and gas production sharing results in inconsistency in the concept of oil and gas production sharing contract. This inconsistency will contribute to inability to reach the natural resource management as mandated by the fourth paragraph of the preamble of the 1945 Constitution, related to Article 33, point (3) of the 1945 Constitution, related to Article 1 and 2 of the Agrarian Law, related to Article 4 of oil and gas law, related to Article 25 in point (1) of Government Regulation No 55 of 2009. The regulations for oil and gas production sharing contract which is public and private have not been integrated into one guideline, and thus private, and public laws are often used as the guideline. Based on the comparison of the two types of oil and gas production sharing contracts, Gross Split contract might degrade the principle of ownership by the state in managing oil and gas compared to Cost Recovery contract. This disadvantage is evident from the lack of government role in supervising and monitoring the management of oil and gas, and this lacking government role can reduce the chain effect of the national economy. Key words : contract, oil and gas production sharing contract, Gross Split and Cost Recovery contracts
International Journal of Energy Economics and Policy, 2020
This article explains the current significant change in the business activities of the Oil and Gas Industry which Indonesia is experiencing. Production sharing contract (PSC) has been one of the mechanisms to flourish Indonesia's Oil and Gas Industry. It creates good cooperation and understanding between the state and the contractors. However, cost recovery PSC, although long-established, has been generating a lot of problems. These problems were mounting up to the point where changing the financing scheme of the PSC seemed to be more feasible rather than creating policies that would stop the contractors from asking for reimbursement. This article will explore whether the government's shift from cost recovery PSC to gross split PSC is a necessity or a premature move. The result of this research shows that the change is both a necessity and a premature move. On one hand, it is a necessity because the deterioration of the state revenue is worrying. On the other hand, it is a premature move because concrete regulations do not follow this shift, and it discourages the contractors.
Lentera Hukum
Indonesia has the potential to manage natural resources in such a way that social justice, public welfare, and the prosperity of the people is also realized. Contract law is the primary legal umbrella used in efforts to protect natural resources from exploitation. This study uses normative juridical methods that prioritize secondary data as the primary sources. This study shows the form of the legal protection of state assets related to oil and gas management including the government has the right of immunity, the existence of provisions regarding state revenue, state levies, and bonuses and the existence of provisions for contractors to distribute a portion of the production share. Thus, the government uses Production Sharing Contracts (PSC) to enter into oil and gas management agreements with contractors, specifically regarding upstream business activities. The Oil and Gas Law does not elaborate on the meaning of the PSC. Rather, it only states that the PSC is one form of the cont...
This research paper analyses the existing laws and regulatory frameworks in the oil and gas sector with a particular focus on Uganda's oil and gas industry. This research analyses the background of the country's oil and gas industry with specific reference to the adaptation of the Production sharing agreement (PSA) model in as far as oil and gas contracts are concerned. The research commences by undertaking an in depth analysis of the basic laws, regulatory, policy and institutional frameworks concerning the management and administration of the oil and gas sector. The research then focuses on the legal framework on the PSA model pertaining to the ownership of the resources, the issuing of licenses and concessions, in as well as efforts undertaken to safeguard the effects of signing PSAs on aspects of environmental protection. This research is also designed to critically analyse the weaknesses and strengths of the current legal regime as well as identifying the gaps in laws relating to the applicability of PSAs and measures being taken to tackle such gaps in the regulatory framework of the country and exploring the ways in which aspects of transparency and effective management of the oil and gas industry are concerned. The research paper also discusses if other factors such as the different stakeholders like media houses, civil societies, Non-governmental organisations and International Oil and gas companies have a had a role to play in influencing the PSA model as the most appropriate choice of the Ugandan oil and gas contracts . Conclusively the research puts forward recommendations regarding how the gaps in the legal framework on the PSA model should integrate or regulate the identifiable influences of other stakeholders in Uganda‟s oil and gas industry.
Constitutionality In Production Sharing Contracts: Legal Policy On Petroleum And Natural Gas
Prophetic Law Review, 2020
This research is focused on constitutionality issue of Law No. 22 Year 2001 on Petroleum and Natural Gas and its relation to Article 33 of the 1945 Constitution and constitutionality of production sharing contract in relation to Article 33 of the 1945 Constitution. This research uses normative juridical method. This research founds: first, the current Law on Petroleum and Natural Gas and its relation to Article 33 of the 1945 Constitution is conceptually still problematic. This is evidenced by the several law articles which had been quashed by the Constitutional Court because they contradict the 1945 Constitution. Second, the petroleum and gas business contracts still contradict the spirit of Article 33 paragraph (3) of the 1945 Constitution, this can be seen by the granting of requests for judicial review of the Law on Petroleum and Gas in the Constitutional Court.
The Legality of Oil & Gas Production Sharing Contract Gross Split Scheme
Indonesian Journal of Energy
As an oil producing nation, Indonesia embodied its authority to manage its oil resources through article 33 paragraphs 3 of The Republic of Indonesia Constitution 1945. Regarding the article, this means that the state has the authority to manage Indonesian natural resources, directly or indirectly, through other public and/or private institutions and the profit of such activity shall be for the benefit of the people. This granted the state to appoint other institution, including a National/International Oil Company (NOC/IOC), to manage the exploration and production of oil, as that particular activity is regarded as a high risk and high capital business. In order to do so, according to Law no. 22 2001, the state may appoint a NOC/IOC through a production sharing contract. In this research, it is founded that the regulation that governed a production sharing contract with the gross split mechanism—Ministry of Energy and Mineral Resources Regulation No. 8 2017 jo. Ministry of Energy a...
2021
This study aims to: 1) analyze empirically and test the effect of cost recovery in the Production Sharing Contract (Oil and Gas Production Sharing). 2) empirically analyze and test the effect of cost recovery in the upstream Oil and Gas Industry on State Revenues. The unit of analysis of this research is the upstream oil and gas industry managed by the Indonesian government with a Production Sharing Contract system with 44 companies or contract operator cooperatives. The population includes those who work as operators of cooperation contract contractors and SKK MIGAS with 62 manager levels, 51 professionals and 18 university researchers. And the researchers also used secondary data in SKK MIGAS in the 1984-20019 period. This research uses a qualitative approach, and the analysis of the data used is descriptive analysis, because the data analysis is done not to accept or reject hypotheses, but in the form of descriptions of observed symptoms, which are not always in the form of numbe...
Journal of Law, Policy and Globalization
The operating activities of the petroleum sector require large amounts of money and high levels of experience and technology that cannot be provided exclusively by most oil-producing countries or their public companies. Therefore, concluding a petroleum exploration and production contract is necessary to address the rights and obligations of the host State and international oil companies; while, various types of petroleum contracts have been developed to address those rights and obligations. In the Kurdistan Region, as an oil-producing region, oil and gas resources are being explored and produced by international oil companies, under production sharing contracts. This study attempts to appraise traditional and modern types of petroleum exploration and production contracts in detail, to examine the fundamental differences and similarities between them; and also to analyse the Kurdistan Region's production sharing contracts. This research has clarified that the traditional contracts of different types of petroleum contracts are quite different, however, the modern contracts have many provisions in common. Therefore, currently, the choice of contract type might be less important than the content of particular contractual provisions. Finally, the research has clarified that the Kurdistan Region's production sharing contracts comprise several positive provisions that have attracted a wide range of international oil companies to invest in the Kurdistan Region.
Comparative Analysis of Nigeria and Malaysia’s Production Sharing Contract (PSC)
European Journal of Business and Management, 2021
The oil and gas industry is governed by policies with the aim of smoothening the business relationship between the Government, the International Oil Companies (IOC’s) and the Host communities. Different oil producing countries have their own laws governing petroleum activities and these laws vary from country to country based on the B-PEST factors which are Biological, Political, Environmental, Social and Technology. However, reserve size and oil type can also influence petroleum laws. Countries like Nigeria relies strongly on petroleum bills such as the PIB in which this research will be analyzing the Production Sharing Contract (PSC) which is a significant subset of the PIB. Comparison between the existing PSC of Malaysia and that of Nigeria was captured in this research and the analysis of the PSC was done based on the Government Take, National Oil Company (NOC) and the Contractor’s benefits. 26.67% and 56.58% recovery cost, 28.67% and 26.28% Government revenue, 23.14% and 7.64% ...