Oil and Gas Regulator, Government Optimistic Positive Trends Upstream Oil and Gas Investment Continues

By : Hariyanto And Aldo Bella Putra | Sunday, May 20 2018 - 23:00 IWST

Wakil Menteri Energi Dan Sumber Daya Mineral, Arcandra Tahar

INDUSTRY.co.id - Jakarta - Since its implementation in 2017, the gross split Production Sharing Contract (PSC) scheme has had a positive impact on the development of oil and gas investment in Indonesia.

The government is optimistic that the upstream oil and gas upstream trend will continue with the introduction of new oil and gas blocks, either new blocks or termination blocks.

Deputy Minister of Energy and Mineral Resources (ESDM) Arcandra Tahar asserted that in 2015 and 2016 no single oil and gas blocks auctioned by the government (22 blocks) attracted investors. It was still using the PSC Cost Recovery scheme.

"After we turn into gross split in 2017, five blocks of oil and gas (from 10 conventional WK) we offer for this year there are 4 blocks, we wait until June how much more behavior, we are optimistic will continue to sell, this is very positive ", said Arcandra on TV One News Jakarta, Friday (18/05/2018),

In addition to the new oil and gas block offered, continued Arcandra, also recorded 13 termination blocks using gross split scheme from 2017 range until now. One of them is the Jambi-Merang termination block, where the investment value of a 5-year commitment must be USD 239 million, with Pertamina contractor.

"This commitment is very big and it only happened this year", added Wamen Arcandra.

Another policy by the government to attract investors and provide ease of investment is the issuance of Government Regulation No. 53 of 2017 on Tax Treatment on Upstream Oil and Gas Activities with Gross Split Distribution Contract.

Arcandra explained, with the issuance of the PP, the Ministry of Finance provides incentives in the form of not charging the cost to the contractor in exploration activities, where indirect tax (indirect tax) is now free until first oil.

"In PP 53 of 2017, the Ministry of Finance provides more incentives, indirect tax is released, even up to First Oil", he added.

Arcandra also believes that in the future, investment in upstream oil and gas sector in Indonesia will be more excited, as world crude oil price increases. "I am optimistic that there will be many investors", concluded Arcandra.