Losing Competitiveness With Other Countries On Climate Investments, This Is Migas Practitioners' Assistance

Illustration of oil and gas (Photo: dock. Antara)

JAKARTA - Migas practitioner Hadi Ismoyo assesses that the Indonesian government still has to improve Indonesia's oil and gas investment climate in order to compete with other countries.

"By not reducing respect, the government has actually done a good thing, including now fiscal term, it can cost recovery, it can be gross split, but the competitiveness atmosphere abroad is so big that good things must also be better," Hadi told the media quoted on Friday, February 17.

Hadi emphasized that in terms of taxes and splits, according to him, the government must provide the best offer so that Indonesia's basin areas are more attractive to explore.

According to him, in terms of splits, which previously amounted to 15 percent for contractors and 85 percent for the government, it was changed.

"If necessary, 85 contractors and 15 for the state because the new base is very high and difficult to explore," he added.

Meanwhile, in terms of taxes, Hadi advised the government to reduce the previous tax amount by 44 percent to only 30 percent or 25 percent.

Hadi further said that the government must foster a sense of crisis so that it can really convince investors to invest in Indonesia through profitable policies.

"We have to think strategically that we are in a crisis right now. Our imports are huge, so there must be a sense of crisis so we have to really convince big investors to re-enter Indonesia with an interesting term," concluded Hadi.

It is known, previously the Director General of Oil and Gas at Tutuka Ariadji revealed, to increase the attractiveness of upstream oil and gas investment, since last year the Government has improved terms and conditions at the auction offer for oil and gas working areas. Among other things, oil and gas sharing can reach 50:50 for the Government and the KKKS.

The government has conveyed changes to these terms and conditions since last year. So for profit sharing, there is no more 85:15, now starting from 80:20 for the Government and the private sector (KKKS) for oil and 75:25 for gas. We start with that number, along with the increase in risk, the government will shrink," he said on Wednesday, December 7, 2022.

Changes to oil and gas yields of up to 50:50 for the Government and the KKKS have been applied to the cooperation contract for the Agung I and II Cooperation Areas managed by BP. The signing of the oil and gas WK contract will be carried out on June 20, 2022.

"In the Agung I and II Projects, the distribution is 50:50. This has been communicated to industry and the world, so hopefully it will increase attractiveness so that it can compete with neighboring countries," said Tutuka Ariadji.