Darrell Johnson of SSEK Recognized as Leading Lawyer in Indonesia for Energy

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Darrell R. Johnson, the senior foreign legal advisor at SSEK Legal Consultants, a leading full-service corporate and commercial law firm based in Jakarta, has been recognized by Who’s Who Legal as one of the top Energy practitioners in Indonesia.

Mr. Johnson has lived and practiced in Indonesia for more than 35 years. As one client told a leading independent legal publication, “Who better to ask than Darrell Johnson on the development of Indonesian law over the past few decades? He is an Indonesian expert.”

Besides energy, Mr. Johnson’s expertise includes Indonesian finance, banking and capital markets law, foreign investment law, mergers and acquisitions, insurance law and corporate and commercial law. Read more »

Legal Guide to Oil Regulation in Indonesia: HSE and Labor

On the Rig Deck by Lindsey G

This is the sixth post in our 2014 Legal Guide to Oil Regulation. Fitriana Mahiddin and Syahdan Z. Aziz will address a new topic each week.

Health, Safety and Environment

The Ministry of Energy and Mineral Resources (MEMR), Directorate General of Oil and Gas (DGOG), Special Task Force for Upstream Oil and Natural Gas Business Activities (SKK Migas), Ministry of Environment and regional governments are the government authorities responsible for implementing work health, safety and environmental (HSE) protections for specific aspects of the oil and gas sector. In conducting petroleum activities, PSC contractors are required to comply with the provisions of occupational health and safety, environmental management and community development regulations. In the exploration phase, PSC contractors must complete an environmental monitoring and environmental management (UKL/UPL) report.

During the exploitation of a proposed development, PSC contractors must further conduct an environmental assessment (AMDAL), which is subject to the relevant government authority’s approval. PSC contractors are also required to make periodic reports to the relevant government authorities regarding their compliance with the UKL/UPL or AMDAL. In addition, the Environmental Law requires PSC contractors to obtain an environmental license.

The DGOG is responsible for supervising the implementation of HSE in the oil and gas sector and imposing sanctions for non-compliance. The DGOG designates Mining Inspection Enforcement teams to examine work safety compliance in oil and gas businesses. If the facilities and techniques satisfy work health and safety standards, the DGOG shall issue certifications for installations and equipment. Non-compliance with applicable HSE rules subjects the company to administrative sanctions up to the revocation of license. Read more »

SSEK Wins 2014 Business Excellence Award

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SSEK Legal Consultants, a full-service corporate and commercial law firm based in Jakarta, has been named Indonesian Law Firm of the Year in the 2014 Acquisition International Magazine Business Excellence Awards.

The awards recognize firms “whose commitment to excellence sees them exceeding clients’ expectations on a daily basis while setting the bar for others in their industry”.

These awards are particularly prestigious because winners are nominated and voted for by their peers and clients. All of the awards are given purely on merit, based on a firm’s achievements over the past year.

The awards’ coordinator, Siobhan Hanley, said: “We’re proud to showcase some of the most innovative and committed organizations from across the business world and the winners can be rightly proud of the game-changing work they’ve been doing over the past 12 months.”

To view the complete list of winners and read the supplement in full, please click here.

Legal Guide to Oil Regulation in Indonesia: Local Content, Transfers, Decommissioning and Transportation

Yme platform by L.C. Nottaasen

This is the fifth post in our 2014 Legal Guide to Oil Regulation. Fitriana Mahiddin and Syahdan Z. Aziz will address a new topic each week.

Use of domestic goods

A PSC contractor is required to prioritize the use of domestic goods, services, technology and engineering and design expertise in a transparent and competitive manner, in accordance with the PSC contractor’s needs, quality standards, pricing and fair time for delivery.

The calculation of local content in the oil industry can be found in the Working Guidelines of the Implementing Body for Upstream Oil and Gas Business Activities (BPMigas) No. 007 Revision-II/PTK/I/2011 regarding Supply Chain Management for the Contractors of a Production Sharing Contract, as amended (PTK 007). The Special Task Force for Upstream Oil and Natural Gas Business Activities (SKK Migas) routinely supervises the realization of local content standards by PSC contractors. PTK 007 stipulates that failure to comply with the commitment to achieve local content standards shall be subject to administrative or financial sanctions, or both. Read more »

SSEK Advises on Enerflex Deal

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SSEK Legal Consultants has advised on all Indonesian aspects of the US$430 million global acquisition by Enerflex of the international contract compression, processing, and after-market services business of Axip Energy Services (formerly Valerus Compression Service). PT Valerus Indonesia is the Indonesian entity of Axip Energy Services.

SSEK also advised on all Indonesian aspects of a US$635 million revolving credit facility for Enerflex, the Canada-based global supplier of oil and gas products and services.

Partner Ira A. Eddymurthy led the SSEK Team advising on the deal, assisted by Bambang Dhanisworo.

Legal Guide to Oil Regulation in Indonesia: Licenses, Royalties and Contracts

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This is the fourth post in our 2014 Legal Guide to Oil Regulation. Fitriana Mahiddin and Syahdan Z. Aziz will address a new topic each week.

Under the Oil and Gas Law, entities in the form of a state-owned enterprise (SOE), regional-owned enterprise (BUMD), a cooperative, small business or private business entity may enter into a production sharing contract (PSC) with Special Task Force for Upstream Oil and Natural Gas Business Activities (SKK Migas) to undertake upstream oil and gas business activities. Pertamina, as an SOE and the state oil company, can hold participating interests in numerous PSCs as a contractor of SKK Migas. There is no maximum limit on the participating interest that an SOE, BUMD or Pertamina may hold. Further, a contractor is required to offer a 10% participating interest in the PSC to a BUMD after obtaining approval for the first plan of development of a field in the work area. The BUMD may accept or reject the offer based on its financial capability.

Royalties and other payments

PSC contractors do not pay royalties, though the first tranche petroleum (FTP) arrangement in later generation PSCs is considered similar to a royalty. FTP is the first take of oil or gas immediately after production in a work area in one calendar year that is received by the state prior to cost-recovery and profit calculation. FTP therefore secures the state’s minimum income. The amount of FTP is determined in the PSC. In addition to taxes, contractors are required to pay non-tax state revenues such as exploration and exploitation fees and bonuses, which consist of a signing bonus and production bonus, regulated by the relevant PSC. The proceeds from the sale of oil and natural gas produced under a PSC are shared between the government and the contractor. Read more »

Attorney in Focus: Winnie Yamashita Rolindrawan

Every year since 1994, SSEK has sent some of its associates to study overseas as part of the firm’s professional development program. Today, we talk with Winnie Yamashita Rolindrawan about her recent overseas study trip.height 448width 595orientation 1camerasoftware Adobe Photoshop CS4 originaldate 1/1/0001 6:00:00 AMheight 448width 595orientation 1camerasoftware Adobe Photoshop CS4 originaldate 1/1/0001 6:00:00 AMheight 373width 595orientation 1camerasoftware Adobe Photoshop CS4 originaldate 1/1/0001 6:00:00 AMheight 448width 595orientation 1camerasoftware Adobe Photoshop CS4 originaldate 1/1/0001 6:00:00 AMheight 369width 554orientation 1camerasoftware Adobe Photoshop CS4 originaldate 1/1/0001 6:00:00 AMheight 295width 295orientation 1camerasoftware Adobe Photoshop CS4 originaldate 1/1/0001 6:00:00 AMheight 395width 595orientation 1camerasoftware Adobe Photoshop CS4 originaldate 1/1/0001 6:00:00 AMheight 434width 578orientation 1camerasoftware Adobe Photoshop CS4 originaldate 1/1/0001 6:00:00 AM

Every year since 1994, SSEK has sent some of its associates to study overseas as part of the firm’s professional development program. Today, we talk with Winnie Yamashita Rolindrawan about her recent overseas study trip.

Where did you go and why?

I went to Dallas, Texas, to participate in the 2014 Academy of American and International Law that was held by the Southwestern Institute for International and Comparative Law, for six whole weeks. This is the 51st year that the Academy has held this course. I was actually supposed to go last year but was unable to do so due to family matters. I am glad that I went this year, though!

Read more »

SSEK Partners and Advisors Recognized as Leading Lawyers in Asia-Pacific

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Ten partners and foreign legal advisors at SSEK Legal Consultants were honored in the 2014 edition of Asialaw Leading Lawyers, the guide to the leading lawyers in Asia-Pacific. The 10 were recognized as leading lawyers in Indonesia across a total of eight practice areas.

SSEK is a full-service corporate and commercial law firm based in Jakarta. The depth of the firm’s experience and expertise was underlined by its showing in the latest edition of Asialaw Leading Lawyers. Its partners and advisors were recognized as leaders in the following practice areas: Banking & Finance; Capital Markets; Corporate/M&A; Construction & Real Estate; Energy & Natural Resources; IT, Telco & Media; Labor & Employment; and Restructuring & Insolvency. Read more »

Legal Guide to Oil Regulation in Indonesia: Exploration and Production

Oil rig tug and boat by mrpbps

This is the third post in our 2014 Legal Guide to Oil Regulation. Fitriana Mahiddin and Syahdan Z. Aziz will address a new topic each week.

Title over oil reservoirs, surface rights and subsurface mineral rights

The state holds mineral rights throughout the territory of the Republic of Indonesia. Private companies may engage in the exploration and exploitation of oil and gas through a cooperation contract with the government through the Special Task Force for Upstream Oil and Natural Gas Business Activities (SKK Migas). However, such cooperation contracts do not transfer the mineral rights to the private entities.

Under Law No. 5 of 1960 regarding Basic Regulations on Agrarian Principles (the Agrarian Law), surface land rights and subsurface mineral rights are national assets belonging to the state. Based on the Agrarian Law, while subsurface mineral rights remain with the state, surface land rights may be granted to private parties. However, under the Oil and Gas Law, the rights to oil and gas work areas do not include land surface rights. Generally speaking, land rights are obtained by negotiating with the landowners and occupiers, in accordance with prevailing laws. Read more »

Indonesian Labor and Employment Law Update

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Richard D. Emmerson, a senior foreign legal advisor at SSEK Legal Consultants, has contributed the Indonesia chapter to Asia Employment Law, a quarterly review of employment law developments across 15 jurisdictions in Asia. The review is designed to help legal and human resources advisors stay up to date on employment-related legal developments around Asia.

In this latest edition of Asia Employment Law, Mr. Emmerson highlights issues related to outsourcing, hiring expatriates, the minimum wage, the social security system in Indonesia, and employment rules for Indonesia’s oil and gas industry. Read more »