Oil and Gas Law revision aimed at boosting investment: minister

Trading

One of the revisions to the Oil and Gas Law aims to boost national investment through improvements in fiscal terms and ease of doing business, among others, Energy and Mineral Resources Minister Arifin Tasrif has said.

“(It is hoping to boost investment) By making improvements to the fiscal terminal, assumption and disposal, ease of doing business, and contract certainty,” he informed during the “2022 International Convention III of the Upstream Oil and Gas Industry” in Nusa Dua, Bali, on Wednesday.

The government is making breakthroughs in the form of contract flexibility, fiscal and non-fiscal incentives, online submission permits, and regulatory adjustments for unconventional investment—all in order to encourage more upstream investment in the country, he noted.

The relaxations have been provided considering that the upstream oil and gas industry is currently troubled, especially in terms of exploration costs, production, and increased access to resources, he informed. The oil and gas industry is also facing critical challenges due to the need for a clean energy transition and carbon reduction.

These developments have forced the financial sector to stop providing financing for new oil and gas projects and direct funds toward renewable energy development, which has resulted in an investment deficit, the minister explained.

In response, the business sector has diversified its operations by investing in non-core sectors, including the development of renewable energy, electricity, and batteries, despite the continued growth in demand for oil and gas, especially in developing countries such as India and Asian and African countries, due to significant urbanization and industrialization.

The government has set its oil production target for 2030 at one million barrels per day and gas production target at 12 billion standard cubic feet per day to meet domestic needs.

Indonesia has large upstream oil and gas potential with 68 potential unexplored basins and proven oil reserves of 2.4 billion bbl (blue barrels) and proven gas reserves estimated at 43 trillion cubic feet.

Meanwhile, the House of Representatives (DPR) has confirmed that discussions on the revision of the Oil and Gas Law will be completed and the revised law will be finalized in 2023.

Chairman of Commission VII of the DPR, Sugeng Suparwoto, confirmed that the Oil and Gas Draft Law will be completed in 2023 as the legislature has already prepared an academic text.

“Regarding the specificity, thus the need for Oil and Gas Law to be immediately up,” Suparwoto said.

Head of the special task force for upstream oil and gas business activities (SKK Migas), Dwi Soetjipto, said that the Oil and Gas Law would provide legal certainty to investors.

“Of course, you need (a legal basis). So, the (foundation) is in the Oil and Gas Law. What’s expected later if there is a (foundation) is that investors will get clearer (picture),” he added.

 

Source: Antara News