Impact of Oil and Gas Investment Efficient Policy, More visible Tuesday, 22 May 2018 217

  • 2018.05.23 Wednesday
  • 18:02

 

The EMR Communications Team

 

 

JAKARTA - Government efforts to increase investment through various facilities, cuts bureaucratic and licensing began to show results, especially in the sector of Energy and Mineral Resources (ESDM), including in the oil and gas sector.

"It is impossible that the Government has deliberately impeded the investment, The proof is as early as this year the Minister of Energy and Mineral Resources has cut 186 licensing of the ESDM sector, 56 of which are related to oil and gas, which is not a discourse yet, but it was done last March.Results, the investment process is smoother, who feel the benefits directly, "said Agung Pribadi, Head of Communication, Public Information and Cooperation Services (KLIK) Ministry of Energy and Mineral Resources, Tuesday (22/5).

 

The result of the next oil and gas investment policy of 20 oil and gas blocks with the Gross Split scheme contract attracted investors. Nine of them are from the auction of oil and gas blocks in 2017 and 2018.

But the 2018 auction is also unfinished, potentially will add again later in June 2018 when the auction is complete. Whereas the auction of 2015 and 2016 with the Cost Recovery scheme contract there is absolutely nothing to sell.

 

"From January 2017 to May 2018, there have been 20 oil and gas block contracts using gross split, 1 ONWJ block, 5 blocks of 2017 auction results, 6 termination blocks 2018, 4 blocks of direct offer auction 2018 and 4 termination blocks 2019. regular auction 2018 results will be announced in June 2019. Can add more, "added Agung.

 

Deputy Minister of EMR, Arcandra Tahar, said that the gross split oil and gas contract is aimed to accelerate upstream oil and gas business processes. So that the time needed since the first oil and gas reserves was discovered (first oil) until the field is producing no longer takes a long time, which since the era of the 2000s could reach 15 years.

 

"Gross split is our choice because of the many challenges ahead, especially in accelerating the business process from exploration to exploitation," explained Vice Minister of EMR, Arcandra Tahar some time ago.

 

The government has also improved the oil and gas investment climate through the Government Regulation (PP) No. 27 of 2017 and Government Regulation No. 53 of 2017 related to fiscal incentives on oil and gas contracts. Substances include, among others, the exploration period of import duty has been waived. Value Added Tax (PPN), Sales Tax on Luxury Goods (PPnBM), Import Income Tax is also free of charge. Land Building tax there is a reduction of up to 100%. As for the period of exploitation can also be given based on economic considerations.

 

Agung then added the next investment policy that gives an opportunity to existing investors to be able to manage oil and gas blocks so that national investment and production are maintained, but still have to be more profitable to the State. The policy is implemented through Minister of Energy and Mineral Resources Regulation No. 23 of 2018 on Management of Oil and Gas Working Areas that Will End Their Contract of Work as amended through ESDM Regulation No. 28 of 2018.

 

"The spirit Minister of Energy and Mineral Resources Regulation is to maintain, even increase oil and gas production from block whose contract will expire and also to maintain the investment continuity in oil and gas blocks." The end result, the greatest benefit for the country, "added Agung.

 

Pertamina can still and very potential to get the right to manage oil and gas blocks termination. Pertamina may apply for the management of the oil and gas blocks and will be evaluated by the ESDM Ministry and inter-agency team.

 

"Since last year there have been 12 oil and gas termination blocks granted to Pertamina, and lastly, from 4 termination blocks in 2019, two of them are given to Pertamina, while the other two Pertamina are less interested or do not apply," said Agung.

 

The twelve blocks of termination make Pertamina control about 36% of national oil and gas production this year (April 2018 status).

(Author: Ariana Soemanto)k

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