Oil and gas investors expecting to ink new contracts this year must hold their horses as the Energy and Mineral Resources Ministry awaits a new presidential regulation specifying who will sign the upcoming agreements on behalf of the government.

The ministry’s director general for oil and gas affairs, Evita Herawati Legowo, told The Jakarta Post on Wednesday that the regulation was needed to ensure the government had a clearer legal basis in signing new oil and gas production sharing contracts (PSCs) in the future.

 Earlier, the ministry had planned to sign PSCs for five blocks this November: one shale gas block, one coal bed methane block and three conventional oil and gas blocks.

The shale gas block is intended for development by state-run energy firm PT Pertamina, while the candidates for contractors of the other blocks are still being masked by the government.

“At first, I hoped that we could sign all of the PSCs for the five fields but, given the current situation, I think I must give up on that hope. We are still waiting for one new presidential regulation specifically indicating who should sign those contracts,” she said in Jakarta.

Evita, who is set to retire from the ministry on Nov. 30, initially hoped that the much-anticipated PSC for the megaproject, East Natuna gas field in the South China Sea, and the new PSC for the Mahakam block in East Kalimantan — which is due to expire in 2017 — could be signed before her retirement.

However, she added that the PSC for East Natuna, whose business consortium includes Pertamina, US-based ExxonMobil, France’s Total SA and Thailand’s PTT Exploration and Production (PTT EP), could not be signed without the new presidential regulation.

Similarly with the Mahakam block, which is currently jointly held by France-based Total E&P Indonesie and Japan’s Inpex with the former being the block’s operator, has also stalled without the regulation.

Mahakam is the most anticipated of the 29 concessions and is due to expire between 2013 and 2021. Other blocks include Siak, operated by Chevron Pacific Indonesia, which expires in 2013; Salawati, operated by Intermega Sabaku and due to expire in 2015; Corridor, operated by ConocoPhillips Indonesia, expiring in 2016; Kepala Burung, operated by PetroChina, which expires in 2016; and Arun B, operated by ExxonMobil, due to expire in 2017.

Following the Constitutional Court’s ruling on Nov. 13 to dissolve upstream oil and gas regulator
BPMigas, the government quickly issued a presidential regulation and two ministerial decrees to
form a temporary task force, SKSPMigas, to assume the functions of a regulator until a new, permanent body was formed under a planned revision to the 2001 Oil and Gas Law, or until the formulation of a new law.

However, after the issuance of the ruling, it became increasingly unclear whether the government would face extra liability if Energy and Mineral Resources Minister Jero Wacik, who leads the interim task force, were to sign off on the new PSCs himself.

Experts, including University of Indonesia (UI) legal observer Hikmahanto Juwana, have said that the current scheme potentially put the government in jeopardy if legal disputes, emerging between oil and gas contractors, that needed to be settled through international arbitration bodies, such as the International Centre for Settlement of Investment Disputes (ICSID).

From the time BPMigas was formed in accordance with the Oil and Gas Law in 2002 until its disbandment by the Constitutional Court in November this year, the energy and mineral resources minister merely endorsed the contracts signed by the now-defunct upstream oil and gas regulator.

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