The Minister Of Energy And Mineral Resources Admits That The Hulu Migas Policy Of Other Countries Is More Attractive

JAKARTA - Minister of Energy and Mineral Resources Arifin Tasrif revealed that his ministry is currently preparing a number of new policies to attract investors to invest in upstream Indonesia's oil and gas.

On the same occasion, Arifin also admitted that the policy of other countries such as Guyana and Mozambique is simpler and more attractive than Indonesian policies so that many KKKS have investments in other countries.

"Many KKKS run to other places, for example, Guyana, then Mozambique. They issue a simple scheme, namely tax and royalties," said Arifin in a discussion with the media at the Directorate General of Oil and Gas, Friday, August 2.

Arifin said, this is different from Indonesia, which still burdens the KKKS with indirect taxes, VAT, PBB, to import duties, even at the exploitation stage of the oil and gas working area (WK).

For this reason, continued Arifin, the Ministry of Energy and Mineral Resources improves PP Number 27 of 2017 and PP Number 53 of 2017 so that the domestic investment climate becomes more attractive.

However, Arifin ensured that he would not abolish the Land and Building Tax (PBB) for upstream oil and gas exploitation activities but only changed the existing scheme.

"So it should only be worn on the lifting of the KKKS section, but those who have the government have also been charged twice. This is indeed the new policy that we are trying to do. Taxes that burden too much will be adjusted so as not to pile up taxes," explained Arifin.

Then on the gross split Production Sharing Contract (PSC) side, the government will also simplify from 13 components to only 5 components.

There is no plan for the government to increase splits for contractors. This is because there are several upstream oil and gas activities such as non-conventional oil and gas drilling (MNK) which has a high level of difficulty, so it requires a greater cost.

"MNK can be bigger because the cost is a lot, the risk is high, the PSC is also gross split because if the cost recovery there is a procedure that takes a long time," concluded Arifin.