To :

IPA Company Members

IPA Associate Members

Jakarta, 5 June 2015

Subject : IPA Position on Bank Indonesia Regulation No. 17/2015

In March 2015, Bank Indonesia issued Regulation Number 17/3/2015 (“PBI 17/3”) on “ Obligation to

Use IDR currency in the Republic of Indonesia Territory “ which will be effective on 1st July 2015.

Whilst the IPA is supportive of Bank IndonesiaI’s effort to strengthen the IDR currency through this

regulation, due to the specific nature of the oil and gas industry, its implementation will have a

substantial impact to the Government, the PSC Contractors and the rest of the industry as the PSC

system is in USD.

Following several meetings with SKK Migas and MIGAS, a Joint Task Force involving SKK Migas, MIGAS and the IPA was established to advocate to the Government stakeholders that the oil and gas industry has specific characteristics and that the implementation of PBI 17/3 would negatively impact business continuity, the investment climate and the growth of the national economy.

Due to the potential impact of PBI 17/3, the Joint Task Force believes that applying Art.16 of this

regulation to obtain special provisions from Bank Indonesia with regard to the obligation on the use of

IDR would be appropriate, due to the specific characteristics of our industry.

In view of the above, the Joint Task Force will schedule to meet with BI to have the same understanding that the upstream oil and gas industry is a business activitiy with specific characteristics and, therefore, propose the application of Art. 16 of PBI 17/3 which allows BI to determine a certain policy with regard to the obligation to use IDR for business players having specific characteristics.

We will keep you informed should there be further developments on this important issue for our

industry.

Regards,

Dipnala Tamzil

Executive Director