News

FLNG ... SHIP OR SOMETHING ELSE?

2 October 2020

FLNG projects can be self-propelling, but some are towed to their installation site, so the FLNG facility is in some cases a sea-going vessel, and in others more of an off-shore platform

A key question is therefore whether the FLNG facility is a ship when it is used in stationary operations

To decide, consider issues like ownership, financing, registration, and the like, for the vessel in question

If the facility is a ship, the choice of flag will be an issue

In addition, consider the identity and nationality of the owner of the facility - this may be dictated by local regulation

Consider also that the facility owner will have to maintain the facility’s class with an appropriate classification society

It will also be necessary to consider the class rating of the vessel if it is security for a financing

Note also that siting the FLNG facility offshore may mean that international conventions may have significance as well as the laws of the country where the facility is located

THE TREND TOWARDS GREEN LENDING

2 October 2020

Major institutional lenders are changing their lending practices in the light of the present pandemic and the legal actions recently brought against them.

The trend is clearly towards lending on the basis of "green" factors, with a focus on green technology such as renewables technology.


In addition, the borrower's clear commitment to the principles of energy transition and sustainability will also meet with lenders' favour.

Of course, institutional lenders too, will have their own "green" targets to meet, satisfying the relevant regulator.


Covid-19 and Global Gas Demand

8 October 2020

Readers may be interested to review the article in the October 2020 edition of Petroleum Review(1) by Dr Anouk Honore, Senior Research Fellow at the Oxford Institute for Energy Studies.

The article focuses on the impact of the Covid-19 pandemic on gas demand in Europe, though I imagine that the situation in Europe will leave us with lessons to be learned for other gas markets also.

Significantly, Dr Honore states that "while policies are likely to take the lead as the main driver of future gas demand in Europe in the 2020s and beyond, in the short term, much will depend on the speed of economic recovery, the level of power demand and the available generation mix, and finally, temperatures over the winter."

Dr Honore concludes, that "while governments focus on immediate (and green) recovery, other factors may support gas demand in the early 2020s - even if economic recession sets in. Importantly, even an economic bounce-back may not necessarily equate to longer term gas demand recovery.... What happens in and post 2020 will only define how quickly fossil gas will decline (or disappear) from the energy mix ... to be replaced potentially by low carbon or renewable gases".

(1) Page 30 et seq, of the Petroleum Review. The Petroleum Review is published by the Energy Institute, whose web address is www.energyinst.org

 

9 October 2020

AMENDMENTS TO THE INDONESIAN LABOUR LAW

When proposed amendments to the Indonesian manpower law were recently being discussed at governmental level, some of the amendments proposed were received badly by the Indonesian public.


Nevertheless, the Amended Indonesian Manpower Law (‘AIML’) has now been passed.

From the viewpoint of foreign investors in Indonesia, some of its more significant provisions include:

  • A softening of one of the key requirements in the previous manpower law, concerning the employment of expatriates in Indonesia. Under the previous Indonesian manpower law, any employer wishing to employ an expatriate was required to prepare and submit a ‘manpower utilization plan’, justifying the need to employ the relevant foreign employee. The AIML has introduced an exemption from that requirement for a number of specific types of expatriate position.

  • The AIML has increased the permitted hourly maximum for overtime work from 3 hours per day and 14 hours per week to 4 hours per day and 18 hours per week.


  • The AIML authorizes regional governments in Indonesia to fix minimum wages for Indonesian employees in light of the economic circumstances and rate of inflation at the appropriate regional level. The AIML also gives priority to the payment of accrued employee wages, over other types of creditor, in the event of an insolvency.


  • The AIML has significantly reduced the levels of employee termination benefit permitted under the previous Indonesian manpower law. That said, the AIML has introduced a social security scheme, presumably to address the reduction in scale of termination benefit under the AIML, though it is undecided as yet who will pay for the new scheme, and crucially whether the employer will have to contribute or pay for the same.


For further information, or advice in connection with the new Indonesian manpower law, please contact allbless@inarakconsultants.com

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