Assume and Discharge Scheme Proposed for Inclusion in RUU Migas

Afriandi Eka Prasetya, Chairperson of the Workers’ Union of the Special Task Force for Upstream Oil and Gas Business Activities (Satuan Kerja Khusus Pelaksanaan Kegiatan Usaha Minyak dan Gas Bumi/SKK Migas), identified three main challenges in investment activities in the upstream oil and gas (Minyak dan Gas Bumi/Migas) sector. These challenges consist of fiscal constraints, regulatory obstacles in Migas, and geological conditions.

“The first is Migas regulations, followed by geological or subsurface conditions, and then fiscal conditions,” said Afriandi.

Regarding fiscal challenges, Afriandi explained that there are four issues: less attractive Migas investment compared to other countries, shifting investment trends towards energy transition, overlapping regulations, and the change in the incentive scheme from assume and discharge to reimbursement.

Afriandi advocates for a change in the Revision of Law No. 22 of 2001 on Oil and Gas (“ UU Migas ”) (“ RUU Migas ”) to restore the assume and discharge incentive model in place of the reimbursement scheme. This effort aims to enhance investment attractiveness in the upstream Migas sector, particularly during the exploration phase.