OREANDA-NEWS. March 26, 2015. Indonesian gas projects face delays because their operators do not know if their production-sharing contracts are to be extended: only this month did Total learn the fate of its contract to produce gas from the Mahakam field.

The government's inability to decide what will happen to fields when their production-sharing contracts expire means that billions of dollars of investment are on hold and the country's gas output is stagnating.

The rules of PSC extensions are governed by the country's 2001 oil and gas law, which has been awaiting key amendments since the constitutional court disbanded the former upstream regulator BPMigas in late 2012 for abusing its power.

The court set up a temporary upstream taskforce SKK Migas to carry out the regulator's role but as BPMigas' role in the upstream sector was at the center of the oil and gas law, the constitutional court had to ask the government to amend the law to reflect the new reality and that process that has been delayed for several years.

The projects that face delays include US major Chevron's IDD project in the Makassar Strait and Inpex's Masela project, Gde Pradnyana, secretary of upstream regulatory body SKKMigas said March 11.

The projects are mainly delayed because the operators do not know if the same terms will apply.

International Gas Report is a biweekly report that intelligently analyzes what is happening in the natural gas industry, improving your vision and sharpening your competitive edge. Through its unrivalled network of global correspondents, it covers the whole gas chain, from the well-head to the burner tip, in Asia, Europe, the Middle East, Africa and the Americas, including gas transport, regulation and the ever-present problems posed by shifting geopolitical concerns.