THE LEGAL POSSIBILITIES OF IMPLEMENTATION OF 10 % PARTICIPATING INTEREST FROM OIL AND GAS TOWARD MINERAL AND COAL MINING ACTIVITIES

Abstract

This study focuses on analyzing the provision of 10% Participating Interest (10% PI) in the oil and gas law. This provision has been comes into existence since the Government Regulation Number 35 of 2004 on Oil and Gas Upstream Business Activity issued. On the other side, the instrument governing the procedures for bidding and the condition of BUMDs that may participate in this 10% PI is newly regulated by Regulation of The Minister of Energy and Mineral Resources Number 36 of 2017 regarding Provisions for the Offer of 10% PI in Oil and Gas Working Areas. The problem formulation of this research how is the implementation of the 10% PI offer provision in upstream oil and gas activities and what are the legal challenges if the provision of 10% PI offer implemented in the mineral and coal mining activities. This is a normative research with three sources of data namely primary legal materials such as the positive laws, secondary legal materials (books, journals, and other literatures), and tertiary legal material. The data are all collected by intensive library studies and approached by using a normative juridical approach. This paper find out that although there are weaknesses, this concept (10% PI offering) is in fact able to guarantee and increase the participation of oil and gas producing regions to directly manage the natural resources contained in their territory. Finally, it concludes that any legal possibilities (chances and obstacles) if such 10% PI can be transformed to other mineral and coal mining industries are differences in regime used, the characteristic of the two industries that are different, and that both mining products need different treatment. However, the core value of 10% PI is arguably can be transformed.