Celebrating The Domestic Oil And Gas Investment Climate, The Government Will Provide Tax And Incentive Facilities

JAKARTA - Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif revealed, starting this year, the Indonesian government is promoting the addition of new oil and gas working areas every year.

Investors can participate through the work area offer process carried out by the government or negotiate directly with the government.

"To maintain the investment climate, we also provide several tax facilities and incentives for upstream business activities to provide an attractive investment climate to investors related to the economic aspect of oil and gas development," Arifin said in his remarks at the opening of the Indonesia Petrelleum Association (IPA) Convex 2024 on Tuesday, May 14.

The tax facility, explained Arifin, will include several indirect tax exemptions that have been regulated in Government Regulation Number 27 of 2017 concerning Amendments to Government Regulation Number 79 of 2010 concerning Operational Costs that can be returned and Income Tax Treatment in the Upstream Oil and Gas Business Sector, and Government Regulation Number 53 of 2017 concerning Tax Treatment for Upstream Oil and Gas Business Activities with a Gross Split Sharing Contract.

The Hulu Business Activity Incentives will cover all matters under the authority of the Ministry of Energy and Mineral Resources, as stipulated in the Decree of the Minister of Energy and Mineral Resources Number 199 of 2021 concerning Guidelines for Providing Incentives for Upstream Oil and Gas Business Activities.

In addition, currently the Ministry of Energy and Mineral Resources and related government agencies are in the final stages of revising Government Regulation Number 27 and Number 53 of 2017. This revision aims to improve the economic eligibility of oil and gas projects.

Meanwhile, in accordance with Net Zero Emission's commitment, the Government has also stipulated Regulations regarding CCS/CCUS, including Presidential Regulation Number 14 of 2024 concerning the Implementation of Carbon Arrest and Storage Activities. This regulation includes aspects of CCS Implementation, where this has not been regulated in the Regulation of the Minister of Energy and Mineral Resources Number 2 of 2023 concerning the Implementation of CCS/CCUS activities at Upstream Oil and Gas Business Activities.

"Currently, there are 15 CCS/CCUS projects in various stages. With a total CO2 Storage Resource of more than 500 Giga Tons, we believe Indonesia has the opportunity to expand the CCS/CCUS business development," he explained.

At the end of his speech, Arifin emphasized the need for collaboration of all stakeholders in facing the challenges of energy fulfillment in the energy transition era.

"I want to emphasize the importance of increasing collaboration and partnerships in facing the challenges of meeting energy needs while reducing emissions. I invite all participants to actively contribute to promoting cooperation in efforts to increase investment, reserves, and oil and gas production while still considering the target of reducing emissions," concluded Arifin.