Incentives and Special Agency for the Oil and Gas Draft Bill

Deputy Chair of Commission XII of the House of Representatives of the Republic of Indonesia (“DPR RI”), Sugeng Suparwoto proposed new incentives and agency for the discussion of the Draft Bill (“Oil and Gas Draft Bill”) on the Amendment to Law No. 22 of 2001 on Oil and Gas, as amended by Regulation of the Government in Lieu of Law No. 2 of 2022 on Job Creation (collectively referred to as “Law 22/2001”).

Regarding incentives, Sugeng confirmed that the return of the upstream oil and gas incentive scheme to assume and discharge will be a point of the amendment in the discussion of the Draft Bill. Sugeng stated that in the previous discussion of the Oil and Gas Draft Bill, the article related to the change in the scheme had been agreed upon.

“Oh yes, there is, that is one of the articles that was completed in the discussion (of the previous discussion of Oil and Gas Draft Bill),” Sugeng told Hukumonline.

In relation to the Special Oil and Gas Proposal Agency (Badan Usulan Khusus - “BUK”), Sugeng explained that this agency will be filled by a supervisory board and a board of directors. The BUK supervisory board is designed to be led and composed of ministers and professionals. The board of directors is designed to consist of seven people who will be appointed and dismissed by the President through the recommendation of the supervisory board.

Sugeng also stated that the discussion of the Oil and Gas Draft Bill will continue to be carried out by Commission XII even though the Legislation Body (Baleg) of the Indonesian House of Representatives had conducted a hearing on the Draft Bill.

“Yes, it will remain with Commission XII,” he explained.