New law hands Pertamina power as Indonesia dodge energy crisis

Indonesia needs investors to avert an energy crisis. But a proposed law, widely hoped to improve the fiscal and regulatory environment, appears disappointing

The new law being reviewed by Indonesia’s policy makers will unequivocally give state Pertamina significant privileges and establish a national operator to buy oil and gas, a draft proposal shows. The moves show a greater desire for energy security, although analysts doubt if the law in its present guise will achieve that. They also reflect the government’s ambition to manage pricing. This nationalist spirit in the proposed law is obviously worrying for foreign investors who have spent considerable sums investing in the sector, said Charles Ball, an energy specialist at law firm Reed Smith. It is no surprise that investment has stagnated in recent years – direct investment stood at $19.4bn i