Policy & Regulation

Jakarta shocks upstream with latest regulatory blow

Indonesia has introduced new regulations that have caused uproar among investors Indonesia has introduced new regulations that have caused uproar among investors.
By Damon Evans 28 July 2017 0 26975
Indonesian President Joko Widodo has warned against excessive red tape. (PA)

Outraged investors in Indonesia’s upstream sector are calling for new energy regulations to be retracted, but fears of further state interference will persist even if their lobbying is successful.

The new rule, announced by Indonesia’s Ministry of Energy and Mineral Resources (ESDM) on 21 July, tightens government control over the sector.

For companies with a production-sharing contract (PSC), regulation no. 42/2017 restricts the transfer of shares or participating interests in projects, as well as changes of directors, chief executives and managing directors. 

The rule applies to the various...