IPM DRILLING

It is really interesting in discussing contracts aspects in the IPM Drilling. Well  if your Company is relatively small in terms of manpower within the Oil and Gas Explorations in Indonesia, you might as well thing of engaging IPM Drilling, since your do not have to tender 10 x for the Services relating to Drilling your Explorations or Producing Wells by just tender One IPM Drilling which is an Integrated Management Drilling

This  Drilling Services consists of Drilling Services itself, and shall than includes the Mud Services, Cementing Services, 

• Drilling Rig
• Logging Unit
• Cementing Unit
• Casing/Tubulars.
• Mud Engineering
• Waste  drilling  disposal
• Testing
• Transportation
• Fishing
• Directional Drilling/ Horiziontal
• Land – Heavy Equipment for road Constructions

Every Company who are specializing will be asked to supply the Materials. 

In this IPM Drilling – the Oil Company – Out sources all the Services relating to the Drilling activities  –  The Concept is Let the Contractor do it,  they  just  shift  the  Cost,  So  they  don not have to do  tender  process several times.

Thus the Oil and Gas Companies, can skip the procedure doing many tenders with many vendors 

Either  the Oil Company or the Drilling IPM Contractor  will design the Drilling  Program. If  The Drilling Contract Design this Drilling Program,  the Design Cost will be included in their Lump Sump Turnkey Project.. There is a 100% Turn Key project or Semi Turn Key.

The Drilling Contractor shall lead the Drilling Operations. If the Oil Company has got many manpower, they usually manage the Drilling activities. The Oil Company will engage several Companies : the Drillling Company, The Mud Contractor, Wireline Logging, Perforating, Fishing. 

But now a days the Drilling Companies shall do the Management of the Drilling several activities. 

This Drilling Company shall own or lease the Drilling Rig.  The Drilling Contractor shall enggage and manage all the relevant Supporting services such as the Cementing, Mudlogging, Casing-Tubing, Wireline Logging. Thus The Oil Company does not be worried how to manage such drilling other services activities. So this is a Turnkey P

Well as a Business Oil and Gas Operational Lawyer,  you may be engaged in Drafting the IPM Drilling Contracts or you may also end up in assisting the Drilling Company in establishing the Drilling Companies. There are many interesting Legal Aspects in these venture. There are several questions that you have to raise. Is the Drilling Company has to be a PT Local Company or can there be a Foreign PT PMA Drilling Company engaged in the Drilling activities. Thus there is the Company Act Law issues, If the Shareholders of the Drilling Company consist of a PT PMA Foreign Company, is the Drilling Company automatically become an Foreign PMA Company. 
These question has to be research with the BKPM, as well as the Director of Oil and Gas and BPMIGAS institutions. What Licenses are required to conduct such IPM Drilling Activities. 

How about the BKPM (Foreign Investment Coordination Body) facilities for the equipment that are being imported from outside of Indonesia; Can this Drilling Company be granted such Facilities  by BKPM or can they just use the Oil Companies' Facilities which are given such facilities under the PSC.

Well those are part of the interesting Issues that the Business Lawyer in the Oil and Gas activities have to check and dig out in assisting their Clients                  

Cheers
Agung S.Suleiman
Independent Business Lawyer  
 Jakarta, 2 April 2011  

Elements in Coal Trading

The Specs and quality of the Coal is really significant to be observed in trading Coal Products. You have to learn carefully from  the Coal Professional, when they are talking and discussing about the Calorie of the Coal. The Coal from Sumatera appears to be high grade ranging around 6.3 to 7.00. 

Stock pile of the Coal is really important to avoid delay in loading the Coal and  for the purpose of determining the Laycan or the time when you will ask the Ship to move or berth to the Terminal Port, for loading the Coal because you will be exposed with Demurage and Dead Freight from the Mother Vessel which will pass by the Buyer to us as the Seller.

If we agree with an FOB arrangement, and delay occurred  causing longer time for the agreed Loading time, this will result  additional cost to the Vessel for parking the Vessel  at the Port, whch will be passed to us by the Buyer of the Coal..  

To minimize the risk  you may try to request that your responsibility as the Seller in taking  the Coal Product is up to the Stock Pile, where you will ask part of payment be made by the Buyer when the Coal reached  the Stock Pile.  We have several experiences, where we are being exposed with Demurage and Dead Freight due to the delay on our part in meeting the agreed volume of Coal to be loaded to the Vessel during the Laycan, since there are certain level of the Quality /Spec Coal  which may reach the Rejection figure specified in the Coal Sales Contract .

As a Corporate Business lawyer involved in this situation we have to experienced upon the real reality occurring during the Loading and shipment of the Coal.    

As you may now, even though the Grade is below the agreed level, frequently the Buyers insist you to continue Loading the Coal Products to the Vessel, event though  Coal Spec reached the Rejection level shown in the Coal Sales Agreement , since it appears  there are always Buyers or Endusers who will  absorb such Coal products. 

However, it may be that since the Coal Product is blended, the Calories are being mixed resulting negotiation upon the adjustment price to the agreed Coal Price, is conducted after a while from the time  Shipment of the Coal had reached its destiny, in the sense that The Coal had been delivered by the Buyer to the Enduser, but adjustment of the Coal Price between the Seller and the Buyer had not been reached. .  

Well the above are some elements that we have to observe in dealing with Selling, Loading the Coal Products  experienced  during the Loading time of the Coal.

Jakarta 4th February 2011
Agung S.Suleiman.