Publications

To support Production operations, ExxonMobil Oil Indonesia (EMOI) has rented houses for their employees and provided furniture and household appliances in Jakarta from the 1980s to the 1990s. Total purchasing value of items was around Rp. 970 million during that time. All goods were fully used for their designated purposes during the active period. According to accounting rules, the useful life of these types of housing furniture and household appliances are a minimum of 5 (five) years. After their useful life was completed, all items were returned to the company and kept for further action, however their useful life had therefore expired when they were kept in storage. The items were maintained well during their storage so that the condition generally was fair and can still be reused as can be seen in the pictures in Table 1. Within EMOI, the function which is responsible for handling of physical assets & inventories in Jakarta is GREF (Global Real Estate & Facilities). GREF’s responsibilities include but are not limited to: 1. Prepares work plan & budget (WP&B) and issues to SKK Migas for storage costs including storage rental and maintenance for Indonesia affiliates in Jakarta 2. Stewards all items resulting from Business Functions (BU) activities which are no longer used & are kept for further actions. Actions include maintaining a current asset & inventories database and storage maintenance & cleaning 3. Supports the BU for assets and inventories related activities including asset physical verification required by government or controller and audit and transfer of assets to a new entity if there is any working area relinquishment or farm out All items were kept in a storage location in South Jakarta with an area totaling 2000 sqm land in a 572 sqm building. For many years, the items were just stored waiting for further actions. The storage rental, maintenance and operations costs were subject to cost recovery and included in the annual WP&B under BS11. GREF has kept and maintained housing furniture and household appliances from BUs for several years but received no directions from users or management as to the future plans for these items. The items were considered as dead stock since they have never been used after being transferred to GREF. Considering the storage cost was expensive and that operational expense reduction was needed, GREF was pushed to cut off the budget in all areas including the storage cost. Therefore, in 2011, GREF initiated the releasing process by studying which was the best method to release the items from the company in accordance with and aligned with the following government regulations: 1. Government regulation no. 6 year 2006 (PP no. 6/2006) regarding management of asset and inventories belonging to central/local government 2. Minister of Finance regulation no. 135 year 2009 (PMK no. 135/2009) regarding management of state assets derived from production sharing contract Based on the above regulations, the asset surrender or transfer of ownership of government asset can be done through some alternative methods: 1. Selling out: transfer of ownership of state or government assets to other parties to receive reimbursement in the form of money 2. Exchange: transfer of ownership of state or government assets conducted between central and local government or between local governments or between central/local government with other parties, to receive in the form of goods at least with a balanced value 3. Donation: transfer of ownership of state or government assets from central to local government, from local government to central government, or between local governments or between central/local government with other parties, without obtaining any reimbursement 4. Government participation: transfer of state/local government property which was originally a wealth that is not separated into separate wealth to be counted as capital of the country / region in state-owned enterprises, regionally owned enterprise, or other legal entity that is owned by the state. After consultation with internal management & ESDM, the company decided to select the donation option to write off all items after considering that the process is simpler, faster & would be more useful for people compared with selling out. In addition, we have had experiences of failing of auctions in the past i.e. no parties were interested in purchasing dead stock items which then caused a delay in releasing our asset & inventories as well as resulting in more costs to pay for storage rental and maintenance. The Ministry of Energy and Mineral Resources (KESDM) provided advice that donations can be channeled to several parties including NGO’s, foundations, communities, etc. In the end, the company preferred to donate all items to the needy through a local government community program. KESDM instructed that the company must strictly follow regulatory requirements for the benefits of both parties, the company & local government. No parties shall be subject to penalty or punishment due to this process and this advice was taken into account. Then the company was informed by a related SKK Migas function that we were planning to donate all items to the community through local government and SKK Migas had no objection to this plan. They provided similar advice as per KESDM that the donation shall provide benefit for all parties