Indonesia May Issue Oil, Gas Contract Extension Regulation

Indonesia is likely to issue a regulation on extending oil and gas contracts to provide concession holders with more legal certainty, Jakarta Post reported.

Currently, there were currently no clear regulations covering the conditions and procedures for contract extensions.

The 2001 Oil and Gas Law only stipulated a maximum 30-year limit for oil and gas contracts that could be extended by a maximum of 20 years at the concession holder’s request.

The regulation would provide detailed procedures for contract extensions and provide criteria for extending or terminating contracts. It would also give state oil and gas company Pertamina an option to take over expiring contracts.

According to BPMigas, contracts for 11 blocks will expire between 2013 and 2018.