Oil & Gas Investment Climate Blossoms if Incentives Approved

Senin, 28 Januari 2013 | 09:09

The Government is preparing incentives for Production Sharing Contract (KKKS) holders for oil and gas exploration activities.The Minister of Energy and Mineral Resources (MEMR) Jero Wacik says Indonesia is a country with abundant gas resources. To that end, he asked the investors, both local and foreign to continue exploring oil and gas in the country.


The problem is that, those investors are not given the sufficient facilities in exploration. In example, there is still a burdensome regarding the tax issues in exploration activities.


"Currently, there are still problems in the area of taxation. We ask on behalf of their favor, therefore it would generate a lot of investors put their money for exploration within five to ten, "said Wacik., Monday (1/21).


Later, the incentive plan will be submitted to the Ministry of Finance. The PIC Director General of Oil and Mineral Resources Ministry said Eddy Hermantoro says the exploration incentives will be given to the PSC exploration, both in the sea and onshore (terrestrial). One incentive is the liberation of land and building tax (PBB) during exploration.

In addition to the land tax-free to be given to the KKKS holders, the Government plans to provide exploration data. The current the oil and gas data is less complete. To that end, the Government will push the data improvement.

Wacik adds that currently there are more KKKS investors to explore oil and gas reserves in the western part of Indonesia. The reason, to explore the eastern part of Indonesia needs more investment yet more risky.

Therefore, for investors who want to explore in eastern part of Indonesia, incentives or facilities should also be provided. "For eastern Indonesia, we would simplify again. Moreover, for the eastern part offshore drillers since the fields in that region are tougher. "

The Special Unit of Upstream Oil and Gas (SKK Migas) estimates the Country will get additional revenue of US$1.2 billion of signing a gas sales contract four days.

At least there are fourth signing gas contracts in the form of the principal - the principal agreement (Head of Agreement / HOA) and three gas sale and purchase agreement (PJBG).

The contracts, among others are, a new contract is signed between the JOB Pertamina - Medco E & P Tomori Sulawesi and PT Panca Amara Utama (PAU). Both had signed the HOA is valid for one year until PJBG signed. The plan, Pertamina - Medco E & P Tomori Sulawesi will supply some 55 million cubic feet (million standard cubic feet per day / mmscfd) with a total volume of 275.75 trillion British thermal units (TBTU) and last in 12.5 years from its kickoff at around April 2015.

The three other contracts, namely the contract amendment Energi Mega Bentu (Limited) – the state-run power plant (PLN_ with a volume of 30 MMscfd for 8.5 years starting in December 2012, PT Medco E & P Indonesia and PT PGN (Limited) by 20 MMscfd for 2 years starting September 2012, and PT Medco E & P Indonesia - PT Metaepsi Pejebe Power Generation with a volume of 14.47 MMscfd and will increase to 17.32 MMscfd for 1.5 years starting in January 2013.

"The contract signing of the National Gas Company (PGN) will pocket the government’s revenue around US$ 1.2 billion," says the Head of SKK Migas Rudi Rubiandini, in a separate occasion.

As for the contract detail with Medco – the State will earn at least US$1.02 billion. The EMP - PLN contract will mobilize some US$180 million, Medco-PGN contract will compile some US$37.5 million, and Medco - Metaepsi will gain around US$ 22 million. The total cumulative revenue to be expected is US$1.26 billion in total. (dpr/aph)

by Riendy Astria
source http://en.bisnis.com