opening A foreign representative office FOR UPSTREAM OIL AND GAS ACTIVITIES IN INDONESIA

According to Article 3 paragraph (1) point c of Governmental Regulation No 35 of 1994 on the requirements and guidelines to the Production Sharing Contract ("PSC") in oil and gas, the provisions of the requirements for the PSC are, among others, that the potential PSC Contractors must have a representative office established in Indonesia. Similar obligations are usually stated in the Kontrak Kerja Sama ("KKS"), in which the Permanent Business Establishment (Bentuk Usaha Tetap) acting as a KKS contractor must open a representative office in Indonesia, usually located in Jakarta. 

The opening of a representative office is regulated under the Investment Coordination Board, but for special sectors such as trade and oil and gas, the regulating is performed by agencies or institutions overseeing the respective sectors. According to Minister of EMR’s Decision No. 1454K/30/MEM/2000 on the Technical Guidelines for Performing Governmental Duties in Oil and Gas (“Ministerial Regulation 1454 of 2000”), oil and gas management can be performed by a regional government including, among others, the permits for opening a representative office in the sub-sector of oil and gas.

Specifically for the Special Capital Region of Jakarta, according to Governor of the Special Capital Region’s Decree No. 95 of 2004 on the Oil and Gas Business in the Province of the Special Capital Region of Jakarta (“Governor’s Decree 95 of 2004”), every Permanent Business Establishment establishing a representative office in the sub-sector of oil and gas in the Special Capital Region of Jakarta must obtain written consent from the Head of the Mining Agency. 

The request for a permit must be submitted in writing with the following requirements:

1. a copy of Citizen’s ID/Passport of the head/management of the company;
2. a bank reference from the country of origin; 
3. a bank account of the foreign company and head office;
4. a business registration certificate or its equivalent from the country of origin;
5. a recommendation from the Indonesian embassy in the country of origin stating the name and address of the company, names of the owner and members of the Board of Directors, representative offices overseas and activity plans in Indonesia;
6. a recommendation from the Directorate General of Oil and Gas;
7. a power of attorney for the head of the representative office from the management at the head office;
8. an organizational chart of the head office and representative office in Indonesia;
9. working plans of the representative office/realization of activities in Indonesia; and
10. a company profile and annual report.

The permit granted will be valid for 2 (two) years and can be renewed. The Permanent Business Establishment with a representative office permit in the Special Capital Region of Jakarta must submit a monthly written statement on the company’s oil and gas business to the Governor of the Special Capital Region through the Head of the Mining Agency with a carbon copy to the Minister of EMR.