-2-7. Law No. 32 Year 2004 on

Local Government (State Gazette 2004 Number 125, Extra State Sheet RI Number 4437) as has been several times amended last by Act No. 12 of 2008 (Sheet) Nation Of Indonesia 2008 Number 59, Additional Sheet Of State RI Number 4844);

8. Law No. 33 of 2004 on the Financial Balance between the Central Government and the Regional Government (State Gazette 2004 Number 126, Additional Sheet of State RI Number 4438);

9. Law Number 25 Year 2007 on Capital Cultivation (State Sheet RI 2007 Number 67, Extra State Sheet RI Number 4724);

10. Law Number 26 of 2007 on the Alignment of the Space (State Sheet of 2007 Number 68, Additional Sheet of State RI Number 4725);

11. Law Number 4 of the Year 2009 on Mineral Mining and Coal (State Gazette 2009 Number 4, Additional Sheet of State RI Number 5052);

12. Law No. 30 of 2009 on the Fame of the State (RI State of 2009 Number 133, Additional Gazette State of Indonesia Number 5059);

13. Law No. 32 of the Year 2009 on the Protection and Management of the Living Environment (State Gazette 2009 Number 140, Additional Sheet of State RI Number 5059);

14. Government Regulation No. 10 of 1989 on Supplied and Utilization Of Electrical Power (sheet Of State RI Year 1989 Number 24, Extra State Sheet RI Number 3395) as amended last with Government Regulation No. 3 of 2005 (State Gazette 2005 Number 5, Additional State Sheet RI Number 4469);

15. Government Regulation Number 27 Of 1999 On Analysis Of The Impact Of The Environment (state Sheet RI Year 1999 Number 59, Additional Sheet Of State RI Number 3838);

16. Government Regulation No. 38 of 2007 on the Division of Government Affairs between Government, Provincial Government of the Province and the District Government/City (State Gazette 2007 Number 82, Extra State Sheet RI Number 4737);

17. Government Regulation Number 59 Of 2007 On The Activities Of The Geothermal Effort 2007 (sheet Of State Of Indonesia Year 2007 Number 132, Additional Sheet Of State RI Number 4777);

18. Government Regulation No. 26 of 2008 on the National Area Tata Plan (SHEET OF STATE RI 2008 NUMBER 48, ADDITION OF STATE SHEET RI Number 4833);

-3-19. Government Regulation No. 22 of 2010 on

Mining Area (RI State Gazette 2010 Number 28, Additional Gazette State of Indonesia Number 5110);

20. Government Regulation No. 23 of 2010 on the Implementation of Act No. 4 of 2009 on Mineral Mining and Coal (State Gazette 2010 Number 29, Additional Gazette State Number 5111);

21. Government Regulation No. 24 Year 2010 On The Use Of Forest Areas (State Sheet RI Year 2010 Number 30, Additional Sheet Of State RI Number 5112);

22. Presidential Decree No. 32 of 1990 on the Management of Protected Areas;

23. The Regulation of the Minister of Energy and Mineral Resources No. 11 of 2008 on the Tata Way of the Redemption of the Earth's Hot Mining Workspace;

24. Regulation of the Minister of Energy and Mineral Resources of No. 2 of 2009 on the Geothermal Preliminary Survey Assignment Guidelines;

25. Regulations of the Minister of Energy and Mineral Resources No. 11 of 2009 on the Guidelines of the Hosting Activities of the Geothermal Effort;

26. Area of the Province of South Sumatra Province No. 8 Year 2008 on the Organization and the Working Services of the Provincial Regional Service of South Sumatra, as amended by the Regional Regulation No. 7 of the Year 2010 (The 2010 Area Number 4 Series D).

With Joint Agreement

THE REGIONAL PEOPLE ' S REPRESENTATIVE COUNCIL

SOUTH SUMATRA PROVINCE

AND

GOVERNOR OF SOUTH SUMATRA

DECIDED:

SET: REGIONAL REGULATIONS ON HEAT MANAGEMENT. Earth.

CHAPTER I OF THE GENERAL PROVISIONS

Article 1

In This Region Regulation referred to: 1. Provinces are South Sumatra Province. 2. The Provincial Government is the Government of the Province of Sumatra

South 3. The Minister is the Minister of Energy and Mineral Resources of Indonesia. 4. The Governor is the Governor of South Sumatra.

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5. District/City is District/City in South Sumatra Province.

6. -The mayor is Regent/Mayor in South Sumatra Province.

7. The Mining and Energy Service is the Provincial Bureau of Mines and Energy of South Sumatra Province.

8. The Head of the Service is the Head of the Provincial Ministry of Mines and Energy of South Sumatra.

9. Geothermal is a source of heat energy contained in hot water, water vapor and rocks along with other minerals and other gases that are genetically inseparable in a geothermal system and for the necessary heating. the mining process.

10. Geothermal management is a broad management of all inventory activities, preliminary surveys, information management, licensing, coaching, supervision and control in the management of the city/city geothermal mining operations.

11. The Earth ' s heat potential is the resource and geothermal reserve.

12. Balance The Earth Heat Potential is a geothermal management policy that includes forecasts of geothermal energy needs, the number of reserves and plans for geothermal development.

13. The Earth's Hot Mining effort is an effort that includes exploration, feasibility studies and exploitation.

14. Earth ' s Heat Mining Relief, next called IUP, is the go-to permit to carry out geothermal mining efforts.

15. Entity is any legal entity in the form of a State-owned entity, the Regional Proprietary Entity, the Koperating, or its established business in accordance with applicable laws and regulations, running the type of fixed and continued effort And again, working and standing within the territory of the Republic of Indonesia.

16. The Preliminary Survey is an activity that includes the collection, analysis and presentation of data related to information of geological, geophysical, and geochemical conditions to estimate the location and presence of geothermal resources as well as the work area.

17. Exploration is a series of activities that include geological investigations, geophysics, geochemistry, test drilling and exploration well drilling that aim to acquire and add information on the surface geological conditions to discover and get an estimate of Earth ' s heat potential.

18. Feasibility study is the stage of the geothermal mining venture activity to obtain information in detail all aspects related to determining the feasibility of geothermal mining efforts, including investigations or studies of the number of reserves can be exploited.

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19. Exploitation is a series of activities on a particular area of work that includes, the development wells and reintroduction wells, the construction of field facilities and geothermal resources operations, as well as its heating for the power plant. power and/or other utilization.

20. The Earth's Hot Mining Workspace, then called the Workspace is the work area specified in the Mining Permit's permit.

21. Direct utilization is the activities of energy utilization and or geothermal fluids for non-electric purposes, both for common purposes and for self-interest, for commercial purposes and for common purposes, such as among others. for industrial, agroindustrial, and tourism processes.

22. Indirect Utilization for Electric Power is the activities of geothermal energy utilization for power generation, both for its own purposes, commercial purposes, or for the general interest.

23. The mineral Ikutan is a mineral in addition to oil and petroleum found in an alir and/or produced in a commercially adequate quantity of geothermal enterprise and is not required to require mining and production in particular. as set in any other mineral mining process.

24. Fixed dues are the dues paid to the state in return for exploration opportunities, feasibility studies, and exploitation of a workspace.

25. Production is the dues that are paid to the state for the results obtained from the geothermal mining efforts.

26. Coaching is all efforts and activities that include briefing, guidance, guidance, training and counseling in the execution of geothermal management.

27. Oversight is all efforts and activities undertaken to ensure the security of the environment and the power of laws in the field of geothermal space.

28. Control is all efforts and activities that include the setting, research and monitoring of geothermal management activities to ensure optimal and sustainable development.

CHAPTER II OF THE AUTHORITY AND RESPONSIBILITY

Article 2

(1) The Governor has the authority and responsibility for performing the geothermal management.

(2) The authority and responsibility of the Governor in the geothermal management as referred to in paragraph (1), includes:

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a. inventory and composition of the geothermal potential balance;

b. Management of geothermal and geothermal information in cross-county area/kota;

c. awarding IUP of geothermal management in cross-county/kota;

d. coaching and supervision of geothermal management efforts in cross-county/city areas.

(3) The authority referred to in paragraph (2) of the letter c is exercised by the Governor and the authority on a paragraph (2) letter a, b and d may be granted to the Head of the Service.

BAB III

STAGE OF THE GEOTHERMAL ENTERPRISE ACTIVITY Section Kesatu

Stage Activities Section 3

(1) Stages of geothermal enterprise activities include: a. Preliminary survey results: Working areas and workspace auctions; c. exploration; d. a feasibility study; e. exploitation; and f. utilization.

(2) The workspace of the work area and the work area auction will be set on its own Chapter.

The Second Part of the Preliminary Survey

Section 4

(1) The governor corresponds to its authority to survey Preliminary.

(2) The Governor may assign to the other party to conduct a preliminary survey.

(3) The implementation of the preliminary survey as referred to in paragraph (1) and paragraph (2) is conducted coordinated by the Governor together Service and related agencies as well as the Regent/Mayor in accordance with its authority.

Section 5

(1) The data of the preliminary survey results as referred to in Section 4 is noted and compiled for any region equipped with borders, coordinates and area of territory.

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(2) The Governor is required to deliver the results of the preliminary survey results as referred to in paragraph (1) to the Minister.

Section 6

The Governor or any other party is referred to in Article 4 of the paragraph (1) and verse (2) may propose an assignment to conduct a preliminary survey on an area to the Minister.

Section 7

(1) The assignment of the Primary survey by the Governor as referred to in Section 4 of the paragraph (2) can be performed through an offer.

(2) The execution of a preliminary survey assignment offering as referred to in Section 4 of the paragraph (2) conducted by means of an announcement via print, electronic media and other media and or promoted through various forums, both national and international.

(3) Assignment of the primary survey by Other parties as referred to in Section 4 (2) are executed at the cost of the other party.

(4) The other party that performs a preliminary survey assignment as referred to in paragraph (3) does not directly obtain the work area.

(5) More Terms on the Terms of Use of the preliminary survey will be governed by the Governor in accordance with the provisions and applicable laws

Third Quarter of Exploration

Article 8

(1) The Governor can conduct exploration in the mining workspace the heat of the earth already set.

(2) The governor may designate the body of effort to conduct the exploration as referred to in paragraph (1).

(3) The implementation of an exploration as referred to in paragraph (1) is carried out in a coordinated way with the associated agency service.

(4) Further provisions on exploration as referred to in paragraph (1) and paragraph (2) shall be further governed by the Governor in accordance with the provisions and applicable laws.

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Article 9

(1) The business entity as referred to in Article 8 of the paragraph (2) can carry out exploratory activities after it gets the-kan IUP.

(2) The exploration activities as referred to in paragraph (1) are implemented in accordance with the good and correct mining engineering rules and geothermal exploration standards, until proven to be known to the potential of geothermal reserves as a base release of development commitments.

(3) The exploration results as referred to in paragraph (2) are delivered to the Governor.

Fourth Quarter of the Study of Eligibility

Article 10

(1) IUP holders may conduct the study feasibility after completing the exploration activities and delivering the exploratory results report to the Governor.

(2) In terms of exploration done by the Governor, the enterprise can directly conduct a feasibility study after it gets IUP.

(3) The work body is required to conduct a feasibility study in accordance with the correct and correct mining engineering rules as well as the standard of geothermal feasibility studies.

(4) The feasibility study as referred to in paragraph (2) and paragraph (3) includes study: a. determination of backup worthy of a mine across the region

work; b. the application of the right technology for the exposition and

steam capture of the production well; c. site of production wells; d. the design of the production wells and the injection; e. the design of the production well; f. short term production capacity planning and

long term; g. electric power generation systems and/or systems

direct utilization; h. conservation efforts and resource continuity

geothermal; i. the safety and health plan of work, protection

and the technical geothermal mining; and j. A temporary post-mine.

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Fifth section

Exploitation

Article 11

(1) The IUP holders can exploit after completing the feasibility study as well as having an environmental feasibility decision based on the results of the study Analysis Regarding the Impact of the Environment or the approval of the Environmental Management and Environmental Monitoring Efforts in accordance with the provisions and applicable laws.

(2) The IUP holder as referred to in paragraph (1) is mandatory doing exploitation according to the rules of good mining techniques and right as well as The standards of geothermal exploitation and regard to environmental aspects as well as the conservation of geothermal resources.

The Sixth Quarter Utilits

Article 12

IUP holders can do activities:

a. indirect utilization for electrical power after having obtained a comnoalization effort in accordance with applicable laws and regulations; and/or;

b. the direct utilization of its implementation in accordance with the provisions and applicable laws.

Article 13

The price of geothermal vapor pricing for the power plant is set in accordance with the provisions and Applicable law-of-invitation rules.

Article 14

To guarantee the availability of electricity for general interest, the Provincial Government may assign the Power Effort Effort to purchase steam or electricity It is from the heat of the earth in accordance with the provisions and regulations of the applicable law-invitation.

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BAB IV

GEOTHERMAL MANAGEMENT SECTION

Inventory of Potency

Article 15

(1) The inventory activity in order identification of geothermal potential is performed through literature studies. and field research that is a preliminary survey.

(2) The results of an inventory of geothermal potentization as referred to in paragraph (1) are one of the foundations for the preparation of geothermal management policy planning.

(3) A Preliminary Survey, as referred to in paragraph (1) executed by the Governor or the party other designated.

(4) The Mining and Energy Service may cooperate with other parties to conduct a preliminary survey as referred to in paragraph (1) in which it is in accordance with the provisions and regulations of the IBM International Business Intelligence ("IBM"). Applicable law.

(5) The way the implementation of the preliminary survey is further regulated by the Governor.

The Second Section of Data Management and Information

Article 16

All data and information obtained from the results of a preliminary survey is made the basis for the creation of a potential balance sheet the setup of the workspace and determination of the geothermal region.

Article 17

Neraca the geothermal potential is compiled in order to optimize the potential of geothermal potential for direct or indirect utilization with the involves the parties concerned with the geothermal management and can be evaluated according to the need.

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BAB V

ASSIGNMENT OF WORKSPACE AND WORK AREA AUCTIONS

Part Of The Workspace Redemption

Section 18 (1) The results of the preliminary survey are communicated to the Minister as

the study materials and considerations for the establishment of workspace.

(2) The Governor may provide advice and consideration to the Minister in setting the work area.

The Second Section

General Article 19

(1) In order of the work area, The governor can set the benchmark price of steam and/or electric power from the power plant the heat of the earth in accordance with the provisions and applicable laws.

(2) The governor pursuant to his authority publicly announces the work area that the Minister has set forth to offer to the agency.

(3) The workspace quotation as referred to in paragraph (1) is carried out by means of an auction.

Article 20

(1) In carrying out the work area offering as referred to in Article 19 of the paragraph (3), the Governor forms the committee The job of a community whose membership is gasal and at least 5 (5). people.

(2) The auction panel referred to in paragraph (1) must understand the layout of the work area, the substance of the geothermal enterprise including its use, law and knowledge of the other field is required.

(3) The task, the authority and responsibility of the employment of the workplace auction committee as referred to in paragraph (2) includes: a. setting up a schedule and setting the site of the auction

workspace; b. setting up an auction document; c. announces a work area auction; d. Assess the business entity's qualifications through prequalification; e. conduct an evaluation of the incoming offer; f. propose a winning candidate; g. make news of the work area auction event.

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The Third Part of the Requirements and Tata Way Auction

Article 21

The office of the auction of the work area prepares the auction document as referred to in Article 20 of the paragraph (3) letter b includes: a. administrative, technical and financial requirements; b. the method of delivery of the quotation document; c. method evaluation method; d. auction-winning procedure.

Article 22

(1) The business entity that can follow the work area auction must meet the administrative requirements, technical requirements, and financial requirements as referred to in the Section 21 letters a.

(2) administrative requirements as referred to in paragraph (1) most included:

a. IUP mail letter to the Governor;

b. the identity of the applicant;

c. deed of the company ' s founding;

d. profile of the company;

e. mandatory principal number;

f. a data compensation payment statement letter except for other parties who have a preliminary survey assignment.

(3) The technical requirements as referred to in paragraph (1) are least included:

a. a technical plan of exploitation or feasibility study; and

b. list of exploits or feasibility studies.

(4) The financial requirements as referred to in paragraph (1) are least included:

a. funding capability;

b. Evidence of bail placement is at least 2.5% of the first year's exploration fee plan from a local bank in the name of the Working Area Auction.

c. proof of the assignment of funds guarantee the implementation of an exploration or exploitation of US $ 10,000,000 (ten million United States dollars) at Government Bank for minimum numbering activities 2 (two) standard wells of exploration or exploitation may be in the form:

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1. a joint account between a business entity with the Governor, or a designated official in accordance with its authority (escrow account) in accordance with the provisions of the law in finance field;

2. loan ready to use (standby loan); or

3. the certificate of a guaranteed credit facility from a financial institution (underwritten credit facility).

(5) The warranty of the auction as referred to in paragraph (4) of the letter b and the letter c shall be returned to the lost enterprise of the auction.

Article 23

(1) The method of delivery of the quote document as referred to in Article 21 letter b performed with 2 (two) stages i.e.:

a. The phase of the senses, including:

1. The business entity delivers the administrative requirements, technical requirements and financial requirements in one (one) cover;

2. On the cover is listed the address of the work area auction committee that holds the work area auction with the phrase "Workspace Offer Phase of the Kesatu", and;

3. on the outer cover of the offer documents received by the work area auction committee are given date and reception hours.

4. The quote document, which is delivered after the end of the income, is not accepted.

b. The second phase, including:

1. the work area auction participant who has been declared a pass by the workplace auction committee at the evaluation of the kesatu stage, must include the price of steam or electric power in the cover;

2. the value of a steam price offering or an electric power is clearly listed in numbers and letters;

3. offer documents are confidential and are only addressed to the specified address;

4. The offer document received, on the outside cover, is given the date and the reception hours by the workplace auction committee.

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(2) The method of offering evaluation as referred to in Article 21 of the letter c is done based on the evaluation of technical, financial and steam prices or the lowest electric power among the price offerings.

(3) The auction-winning procedure of the auction as referred to in Article 21 of the d letter includes:

a. Phase one

1. Pre-qualified announcement; 2. Pre-qualified document retrieval; 3. Pre-qualifying document entry; 4. evaluation of qualifying; 5. Clarification and confirmation of pre-qualifying documents; 6. Pre-qualifying results: 7. The announcement of the prequalification results; 8. I have a long time to qualify.

b. Phase two 1. An invitation to a contestant who is eligible to qualify; 2. the retrieval of the auction document; 3. explanation; 4. The news of the event is an explanation of the auction document and its changes; 5 an income level offering of the price of steam or electric power; 6. the opening of the offer cover; 7. Ranking: 8. notice/announcement winner; 9. It's a bad time;

10. Disclaimer of disclaimer; 11. the appointment of the winner.

(4) Further provisions regarding the implementation of the evaluation of the offering as referred to in paragraph (2) are further regulated by the Governor in accordance with the provisions and applicable laws.

Fourth section of the Work Area Auction

Results of the Preliminary Survey

Section 24

(1) Governor based on preliminary survey assignment data conducted by other parties set the work area.

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(2) The governor in accordance with his authority announces the work area as referred to in paragraph (1) publicly for offer to the entity.

(3) The requirements and procedures of the work area auction as referred to in paragraph (1) in accordance with the manner of the auction as referred to in Section 21, Section 22 and Section 23 of the letter b except for the other parties that obtain a direct survey assignment of the primary is stated to pass the wrong stage.

Article 25

The procedure of the winner of the work region auction as referred to in Section 21 of the letter d for the work area the preliminary survey results are performed as follows:

a. The Committee for the auction of the work area on the second stage provides the opportunity for the auction of the auction participants who passed the qualifying campaign and the other parties who were assigned a preliminary survey to deliver the price offering of the steam or electric power;

b. The governor is in accordance with his authority establishing the winner of a work area auction based on the lowest price of the price of steam or electric power in a way: 1. The bidding of the auction participants is performed

based on the evaluation of the technical, financial and steam prices and/or the lowest electric power among the incoming price offerings;

2. In the event of a steam and/or electric power offering submitted by other parties higher than other auction attendees, then another party is granted the right to make changes to the security offering-the lack of equal price-lowest bidding. steam and/or electric power submitted by another auction participant;

3. In terms of other parties willing to make changes in the bidding as referred to in number 2, to the other concerned parties are designated as the winner of the auction of the work area by the Governor in accordance with its authority;

4. In terms of other parties not willing to make changes in the bidding as referred to in number 2, the Governor is in accordance with his authority setting the agency that proposes the price of the price of steam and/or the lowest electric power as the victor. Workspace auction.

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as referred to in number 4, is required to pay compensation data (awarded compensation) to the other party.

Fifth Part Sanggahan

Article 26

(1) Participants The disadvantaged workspace auction, both individually and together with the other participants, may apply for the disclaimer if found:

a. deviation to the provisions and procedures that have been specified in the auction document;

b. Certain engineering may result in unsanitary competition; and/or

c. abuse of authority by the organizing committee of the work area and/or other authorized officials.

(2) The disclaimer as referred to in paragraph (1) is filed written in writing to the Governor of the slowest 5 (five) business days after the announcement/announcement of the work area auction.

(3) The governor in accordance with his authority is required to provide the most answers to the most five (five) working days since the letter Disclaimer of acceptance.

(4) If disclaition as referred to in paragraph (2) Turns out to be correct, then the work of the work area auction must be repeated in accordance with the provisions and regulations of the applicable invitators.

Part 6 Anniversary Auction

Article 27

(1) The region auction work as referred to in Section 21, Section 22 and Section 23, be repeated if the number of business entities that enter the offering is less than 2 (two) participants.

(2) If the reauction is referred to in paragraph (1) it is only followed less than 2 (two) participants then participants of the work area auction that meets the requirements administrative, technical and financial can be appointed directly.

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(3) The work of the work area the results of the results of the preliminary survey results as referred to in Section 24 and Section 25, if no other business entity has entered the offer then the other party is assigned the assignment A preliminary survey of the preliminary survey meets the administrative, technical and financial requirements can be directly designated.

BAB VI IUP

Section of the IUP Giving

Section 28

(1) geothermal resource-resource includes: a. exploration; b. a feasibility study; and c. exploitation.

(2) The geothermal resource company as referred to in paragraph (1) can only be exercised by the entity after it gets IUP from the Governor.

(3) IUP as referred to in paragraph (2) is given to the business entity the winner of a work area auction that is on a county/city cross area.

(4) Any business entity can only attempt to be given 1 (one) work territory.

(5) In case the business entity will attempt to be more than 1 (one) work territory must be set up separate legal entities for each work area.

(6) Within six (six) months after the IUP is specified, the IUP holders as referred to in paragraph (2) are required to begin its activities.

(7) The order and requirements of the IUP application are further regulated by the Governor.

Article 29

IUP may be transfered to an affiliate business entity and or other parties with Governor's approval.

Second Section

IUP Term

Article 30

(1) The term to conduct an exploration of the most lasting 3 (three) years since IUP is published and may be extended at most 2 (two) times Each and every one (1) of the year.

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(2) An extension request as referred to in paragraph (1) is submitted to the Governor at least 3 (three) months prior to the expiration of the exploratory term.

(3) The exploration timeframe extension may be provided if it meets technical and financial requirements.

Article 31

(1) If it has been completed the exploration of the IUP holders is required to submit a feasibility study plan to the Governor.

(2) Term for conducting the study The worthiness of the paragraph (1) is the second (two). years since the term of exploration is over.

Article 32

(1) The IUP holders are required to submit a written report of the results of the feasibility study to the Governor before carrying out the exploit by attaching it:

a. short term plans and the long-term plan of exploitation that includes a work plan and budget plan;

b. environment feasibility decision based on Analytic Environmental Impact or Environmental Monitoring Efforts and Environmental Monitoring Efforts.

(2) The long-term plan of exploitation as referred to paragraph (1) of the letter a includes: a. location of the development drill point; a. production well development activities; b. financing; c. the preparation of production ipad channels; and d. earth ' s heat utilization plan.

Article 33

(1) The term of the exploit as referred to in Article 28 of the paragraph (1) the letter c is valid at least 30 (thirty) years since the term of the exploration is over and may be extended the longest 20 (twenty) years for each time of extension.

(2) The Requirements and grammar of the extension of the term IUP as referred to in paragraph (1) the letter a and the letter c is further regulated by the Governor.

(3) In doing an extension to do the Governor ' s exploits should consider the factors- the potential factor of Earth ' s heat reserves of the working region concerned, potential or certainty of need, technical, economic and environmental feasibility.

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Article 34

IUP holders who have performed the exploitation may perform the geothermal utilization activities directly or indirectly in accordance with the provisions of the applicable laws.

Article 35

The IUP holders are entitled to obtain the effective suspension of the term of exploitation as referred to in Article 33 of the paragraph (1) to obtain the geothermal utilization permit in accordance with regulatory provisions. Applicable law.

Article 36

(1) Since the approval of the plan The first geothermal development will be produced from a work area of the IUP holders to offer parcitipating interest 10% (ten per hundred) to the Regional Property Agency.

(2) Statement of interest and misstatement to take parcitipating interest as contemplated (1) is delivered by the Regional Proprietary Entity in the most prolonged period of 60 (sixty) days from the date of the offer from the IUP holder.

(3) In case the Regional Proprietary Entity does not provide a statement of passage in the timeframe as referred to in paragraph (2) the IUP holders may offer to the national company.

(4) In terms of national enterprises does not provide a statement of interest and interest in the longest running time of 90 (ninety) days from the date of the quotation from IUP holders to the national company, then the offer is declared closed.

Article 37

(1) The area of the work area for exploration as referred to in Article 28 of the paragraph (1) of the letter a may be provided to the business entity that has obtained the IUP should not exceed 200,000 (two hundred thousand) hectares.

(2) The area of work for exploitation as referred to in Article 28 of the paragraph (1) letter c that can be provided to the holder IUP should not exceed 10,000 (ten thousand) acres.

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Article 38

(1) If in time of exploration as referred to in Section 30, no geothermal energy reserves can be produced commercially, then the IUP holders are required to return All areas of work to the Governor.

(2) The IUP holders are required to return all of the worklands to the Governor after the term IUP ends.

Section 39

(1) At the time or before the end of the term IUP holder's eligibility studies are required to gradually restore the workspace that is not used again to the Governor.

(2) In the most prolonged period 2 (two) years after the IUP holders complete the compulsory feasibility study activities restore the exploration workspace sehinggga the work region is maintained for The exploitation of not exceeding 10,000 (ten thousand) hectares.

(3) Before returning the workspace as referred to in paragraph (1) and paragraph (2) the IUP holders are required to perform reclamation activities and preservation functions environment.

(4) The service of the work region as referred to in paragraph (1) and verse (2) is declared valid after obtaining written consent from the Governor.

The Third Quarter is finally IUP

Article 40

(1) IUP ends because: a. Expires and is not extended anymore; b. returned by IUP holders; c. cancelled; and d. revoked.

(2) IUP holders can resubmit IUP with a written statement to the Governor if the exploratory results do not provide the expected economic value.

(3) The IUP traveler as referred to in paragraph (2) Declared legitimate after approval by the Governor.

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Article 41

The governor may revoke IUP if the holder of the IUP:

a. conduct a breach of the obligations and or the requirements set forth in the IUP; or

b. not fulfill the obligations and/or requirements specified under the terms of the applicable invitatory rules;

c. does not conduct an exploration of the term 6 (six) months since the granting of IUP;

d. not conduct a feasibility study within 6 (six) months since the IUP grant in terms of exploration is exercised by the Governor;

e. not to exploit in the term of 2 (two) years since the term of exploration ends;

f. not to pay for state acceptance of tax and state acceptance not tax in accordance with the provisions of the applicable laws;

g. not meet the specified requirements in accordance with the applicable laws; or

h. not meeting the safety and health requirements of work, environmental and technical protection of geothermal mining.

BAB VII THE RIGHT AND HOLDER OBLIGATIONS

THE HOLDER OF THE IUP RIGHTS SECTION

ARTICLE 42

(1) IUP holders are entitled to:

a. conduct geothermal management activities in the form of exploration, feasibility study and exploitation in its work area after meeting the provisions and applicable laws.

b. use data and information during the term of the IUP in its work area.

c. may obtain the taxation facility in accordance with the provisions of the applicable laws.

(2) In conducting activities the geothermal mining enterprise of exploration, the study of feasibility and exploitation as referred to in paragraph (1) the holder of the IUP reserves the right: a. entering and performing activities in the workspace that

is concerned;

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b. using common means and infrastructure; c. utilizing geothermal resources for

direct utilization; d. sells the resulting geothermal steam; and/or e. get an IUP term extension.

Article 43

IUP holders are entitled to all geothermal mining business activities after meeting the requirements as follows: a. safety and work health; b. environment protection; c. geothermal mining.

Article 44

At the exploration stage IUP holders are entitled to exploration by using good and correct methods and equipment including: a. Geological inquiry; b. Geophysical investigation; c. geochemical inquiry; d. Thermal drilling for temperature; and e. drilling of exploration wells and production tests.

Article 45

At the level of feasibility study the IUP holders are entitled to a standard evaluation of backup and technical, economic, and environmental standards.

Article 46

At the exploitation stage of the IUP holder is entitled to any activities according to the results of the feasibility study including:

a. drilling of development wells and reinjection wells;

b. construction of a field facility and geothermal resource production operation;

c. production well construction;

d. infrastructure development to support geothermal exploitation and geothermal capture.

The Second Part

IUP Holder Liability

Article 47

(1) IUP holders are mandatory:

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a. understand and comply with applicable laws in the field of health and work safety, environmental protection and meeting applicable standards;

b. manage the environment to include preventive and countermeasures of pollution and recovery of the environment function and reclamation;

c. prioriting the utilization of goods, services and engineering capabilities and design. country transparently and compete;

d. provide support for research activities and the development of geothermal science and technology;

e. provide support for creation activities, competency development and human resources coaching in the geothermal field;

f. carry out the local community ' s development and resource program;

g. provide periodic written reports of the work plan and execution of geothermal management activities to the Governor;

h. pay for state acceptance of tax and state acceptance not taxes and its obligations to the Provincial Government in accordance with applicable laws.

(2) The written report referred to the paragraph (1) of the letter g was implemented as follows: a. For the activities of the IBM Cloud Service, Client may use the IBM Cloud Service for the Cloud Service, including the following: For the exploitation activities of the monthly report, quarterly reports and annual report and annual work plan.

(3) submit idle wells to the Provincial Government to support rural electricity.

(4) supports the opportunities for the effort Provincial Government in geothermal utilization.

Article 48

IUP holders are required to meet the performance of work safety and health as referred to in Article 43 of the letter a include: a. the availability of organization and safety personnel and

working health including mine engineering chief;

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mi.

b. safety and work health management administration; c. guarantee of equipment safety, work environment, method and

working process;

d. Accident and occupation procedure.

Section 49

IUP holders are required to meet the environmental protection performance as referred to in Section 43 of the letter b, including: a. Environmental feasibility decisions based on analysis

regarding environmental impact, environmental management efforts and environmental monitoring efforts;

b. Fulfillment of environmental degradation and environmental damage criteria;

c. report of the results of environmental management plans or environmental management efforts and environmental monitoring efforts;

d. utilization of environment friendly technology.

Article 50

IUP holders are required to meet the technical performance of the mining as referred to in Section 43 of the letter c includes: a. the implementation of good mining techniques and

true as well as the exploration standards and or the heat exploitation of the earth;

b. ability to carry out exploration of the entire workspace;

c. The magnitude of funds/investments for exploration and exploitation of geothermal exploitation;

d. set up how to calculate resources and backup;

e. the planning and construction of geothermal development; and

f. efficiencies in producing heat source bu

Article 51

Further provisions concerning the performance of Occupational Safety and Health (K3), environmental protection, and mining technical, are set in accordance with the provisions of the Applicable law.

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Section 52

(1) IUP holders prior to the start of the taxable year, are required to deliver a long-term plan of exploration activities and/or feasibility studies as referred to in Section 47 of the paragraph (1) letter a number 4, to the slowest of three (three) months since the exploration stage or feasibility study begins.

(2) The exploratory long-term plan as referred to in paragraph (1) includes plans for activities and budget plans.

Article 53

(1) IUP holders prior to the start of the taxable year, are required to deliver a term plan The length of the exploitation as referred to in Article 47 of the paragraph (1) letter a number 5 to the Governor of the slowest 1 (one) of the year since the feasibility study ends.

(2) The plan of the long-term exploits as referred to in paragraph (1) includes an activity plan and a budget plan including the magnitude of the backup.

Section 54

(2) The adjustments to the long-term plan of exploration and exploitation as referred to in Article 47 of the paragraph (1) letter a number 4 and the number 5 can be performed each year according to the conditions faced through the plan work and the annual shopping budget.

(3) The annual spending plan and shopping budget as

referred to the paragraph (1) is submitted to the Governor of the slowest 2 (two) months before the annual job plan and the annual spending budget expires.

Article 55

(1) IUP holders in the most prolonged period of 2 (two) The year before the geothermal activity ended conscripted and presented a document with the post-mine plan to the Governor for approval.

(2) The post-mine plans document as referred to in paragraph (1) includes: a. Installation of installation and reclamation plans;

b. the handling of the living environment includes a post-mine reclamation plan tailored to the Tata Room Detil Plan as Analysis On the Environmental Impact is approved;

c. The social program handling of the community on transition and program Sustainable development.

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Article 56

(1) The IUP holders are required to allocate collateral funds for post-mining activities of the geothermal resources in the Bank.

(2) The obligation as referred to paragraph (1) is carried out since the start of the term of exploitation and executed through the budget plan.

(3) The placement of the funds allocation as referred to in paragraph (1) and paragraph (2) are agreed by the IUP holders and the Governor as well as the Regent/Mayor as special reserve funds of activities reclaimed and post mines in the area of work concerned.

(4) The provisions regarding the method of the sequestery, the quantity and the thawing of the post-mine funds are set in accordance with the provisions and applicable laws.

BAB VIII

COACHING AND SUPERVISION

Article 57

(1) The Governor conducts the coaching and supervision of the city's hot mining efforts in the Province.

(2) The coaching and supervision as referred to in paragraph (1) is exercised by the Mining and Energy Service.

Article 58

Supervision to the conduct of safety and work health, environmental protection and mining technical services are carried out by the Mine Inspector, in accordance with the provisions and applicable laws.

Article 59

Coaching, supervision and control as contemplated in article 57 of the paragraph (1) includes: a. exploration;

b. Feasibility study; c. exploitation; d. financial; e. Geothermal data processing; f. The conservation of the quarry; g. health and safety work; h. Environment management and Reclamation; i. utilization of goods, services, technology, and capabilities

engineering and design built in the country;

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j. Workforce development of Indonesia; k. developing environment and community empowerment

local; l. control, development, and application of technology

geothermal mining; m. other activities in the area of the heat management enterprise activity

the earth along concerns the common interest; n. the application of the economy and its good will.

Article 60

(1) The coaching, supervision and control as referred to in Article 57 may be performed together with the associated agencies.

(2) More provisions further regarding coaching, supervision and control is established by the Governor.

CHAPTER IX ADMISSIONS SECTION

Article 61

(1) The IUP holders are required to pay the area tax on area and or regional levy appropriate. with the provisions and regulations applicable.

(2) In addition to Mandatory service taxes and/or regional retribution as referred to in the paragraph (1) the IUP holders are required to pay the country's acceptance of the fixed dues and the production dues in accordance with the provisions and applicable laws.

BAB X

ENVIRONMENTAL MANAGEMENT SECTION

Land Use Section 62

(1) The operation of geothermal management is carried out within the province's geothermal mining law area.

(2) The rights of the work region do not constitute the rights to earth surface land.

(3) The activity of the geothermal management efforts cannot be implemented at:

a. a burial place, a place considered sacred, a public place, general means and infrastructure, a cultural reserve, as well as a land belonging to the indigenous people;

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b. the country ' s field and defense buildings as well as the surrounding land;

c. the historic buildings and symbols of the country;

d. buildings, residences, or factories and the surrounding land;

e. other places that are prohibited to conduct business activities in accordance with the provisions of the applicable law-invitation rules.

(4) The provisions as referred to in paragraph (3) may be exercised in terms of obtained permission from the Governor, consent the community and the individuals associated with it.

(5) In terms of the use of land rights, land of state or forest area within the workspace, the IUP holders are required to enter into a settlement with the the right or the user of the rights above the land of the country in accordance with the rules Applicable law.

(6) If the location of the geothermal management activities is included in the area of the forest area then before carrying out its activities the IUP holders have permission to borrow the forest area from the Minister of Forestry in accordance with the provisions and applicable laws.

The Second Part of the Protection and Environmental Management

Article 63

(1) In order for environmental protection after obtaining IUP before conducting geothermal management activities IUP holders must have permission environment.

(2) Environmental Permit as referred to in paragraph (1) is provided by the Governor or Regent/Mayor as a result of the feasibility study of AMDAL, RKL-RPL or UKL-UPL documents according to its authority.

(3) The eligibility document environment AMDAL, RKL-RPL or UPL-UKL as referred to in paragraph (2) is a reference to the business or activities of the environment management.

(4) The execution of activities as referred to in paragraph (3) is reported to the service and the agency associated every 6 (6) months at once.

(5) Tata method of execution of management environment is set further by the Governor.

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Third Section of Community Development and Empowerment

Article 64 (1) The IUP holders are required to carry out the development program

and the empowerment of the community around the work area that it cultivated.

(2) The society's empowerment development program must be synergistic and mutually agreed in accordance with regional development programs, community wishes and IUP holders.

Article 65

(1) The community ' s development and empowerment program as referred to in Article 64 paragraph (1) becomes a guideline for the Provincial Government, the IUP holders and the local community.

(2) The loading of the Planning, execution and supervision of community development and empowerment programs is the burden and responsibility of the IUP-holder entrepreneurs.

(3) The implementation of mandatory community development and empowerment is reported every 6 (six) months to the Head of the Service.

BAB XI

SANCTION THE ADMINISTRATION

Article 66

(1) IUP holders who violate the provisions as

set up in Section 11 paragraph (3), Section 12, Section 28 of the paragraph (6),

Section 31 of the paragraph (1), Section 38, Section 39 of the paragraph (1), paragraph (2) and

paragraph (3), Section 47, Article 48, Section 49, Section 50, Section 52

paragraph (1), Section 53 of the paragraph (1), Section 55 verse (1), Section 56 of the paragraph

(1), Section 61, Section 62 of the paragraph (5) and paragraph (6), Section 63 of the paragraph

(1) and Section 64 verse (1) is subject to administrative sanction.

(2) administrative sanctions as referred to in paragraph (1)

are:

a. written warning; b. Temporary termination of all exploration activities and

exploits; or c. revocation of permits.

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TRANSITIONAL provisions

Section 67

All geothermal management cooperation contracts that have been

exist before the enactment of this Area Regulation, stated fixed

applicable to the end of the term contract.

BAB XIII

CLOSING provisions

Section 68

The things that are not quite set in this Section Regulation,

along the technical implementation will be set

further with the Regulation. Governor.

Article 69

These Regional Regulations go into effect on the date Uninvited.

So that everyone knows it, ordering the invitters

This area regulations with the placement in the Sheet

South Sumatra province area.

Set in Palembang on December 31, 2010

GOVERNOR OF SOUTH SUMATRA,

dto

H. ALEX NOERDIN

It was promulred in Palembang on December 31, 2010

Plt. REGIONAL SECRETARY OF SOUTH SUMATRA PROVINCE,

dTO

YUSRI EFFENDI

LEAVES OF THE PROVINCE OF SOUTH SUMATRA PROVINCE 2010 NUMBER 5 SERIES E

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PERGUB GEOTHERMAL MERGE TE lg