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Current Sources Of The State Of Indonesia

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In Indonesia, petroleum is one of the main sources of the state revenues. It is also a very important strategic commodity and often as political issue. The revenues from oil and gas have driven the economic growth and contributed significantly for the development of Indonesia. In the world, legislations which regulate oil and gas are varies from country to country. In spite of many variations, in general, the upstream oil and gas activities, based on two systems, the production-sharing contracts and the licensing systems. Indonesia was the country that introduced the concept of production-sharing contracts in 1966 (Bindemann, 1999).

After the verdict of Indonesian Constitutional Court in 2012 on The Oil and Gas Law, some of the articles were unconstitutional and not legally binding. As a result, the government and the parliament want to revise the oil and gas law and led to the ideas of replacing the production-sharing contract with the licensing system. Nevertheless, before Indonesia adopts the new system, many aspects should be considered in designing legislations. Some of the aspects are the concept of natural resources ownership, revenues for the state, and attractiveness for the investors.

Mean while, as the owner of natural resources, the government has the rights to control and regulate petroleum resources. The government would also have to balance its demand for maximizing the revenues from oil and gas and adverse effect on investment climate. Thus, it should be

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