Procedures for the Management and Governance of State-Owned Assets within the Upstream Oil-and-Gas Business Sector

In order to implement a more effective, efficient and integrated management of state-owned assets (Barang Milik Negara– “BMN”) within the upstream oil-and-gas business sector, the Ministry of Energy and Mineral Resources (“Ministry”) has issued Regulation No. 51 of 2017 on the Management and Governance of State-Owned Assets for Upstream Oil-and-Gas Business Activities (“Regulation 51/2017”). [1] This new regulation essentially encompasses several procedures which address the management and governance of BMN, as well as transitional provision which pertain to mandatory reporting by oil-and-gas contractors (“Contractors”) to the Ministry.Management and Governance ProceduresPursuant to Regulation 51/2017, BMN refers to all goods which are obtained and used by Contractors in order to engage in their upstream oil-and-gas business activities, as part of the implementation of cooperation contracts held with the government(“Cooperation Contract”). [2] Several procedures are involved in the management and governance of BMN, as described in the table below: