Indonesia Upstream Update 2017: Key Developments in the Indonesian Upstream Sector

Indonesia Upstream Update 2017: Key Developments in the Indonesian Upstream Sector

The Indonesian upstream sector continues to undergo significant legal and regulatory change. This article examines five of the most recent developments in the Indonesian upstream sector that affect Indonesian Production Sharing Contracts (“PSCs”) and their participating interest holders (“Contractors”). These developments are: (1) the introduction of a gross production PSC, a fundamentally different fiscal structure to be applied to all new PSCs; (2) further details on Indonesian participation requirements under PSCs; (3) new indications on the application of rules relating to PSC extensions; (4) further details on decommissioning obligations; and (5) an update on the draft Oil and Gas Law.