5 oil, gas contractors owe $113 million to the state

Five oil and gas firms, including U.S. energy giant ExxonMobil and Kangean Energy Indonesia, owe the state US$113 million in unpaid income tax bills, according to a document seen by The Jakarta Post.

The document was a paper presented in a meeting between Finance Minister Sri Mulyani Indrawati and a House of Representatives? committee on Thursday. The document said the figures were based on an audit done by the Development Finance Comptroller (BPKP) in 2008 and 2009, although said also that further clarification was needed to verify the figures, the newspaper said on Friday.

The five contractors are Exxon-Mobil Oil Indonesia Inc., Joint Operating Body (JOB) of Pertamina and Golden spike Raja Blok, Kangean Energy Indonesia Ltd, Santos UK (Kakap 2) Ltd, and JOB Kodeco Energy Co. Ltd.

According to the document, the largest debtor was Kangean Energy Indonesia Ltd with a total debt reaching U$45 million, which included $30.45 million in unpaid tax and $14.61 million in penalties.

The second largest is JOB Kodeco Energy Co. Ltd with a total debt at $32.23 million, which includes $21.78 million of unpaid income tax and $10.45 million in penalties.

ExxonMobil is the third debtor with a total debt of $22.82 million. ExxonMobil?s spoke person Maman Budiman said the unpaid tax bills were still in dispute.

?ExxonMobil always fulfills its tax obligations. The $22 million you mentioned is still being processed by the tribunal court because there are different opinions about it,? Maman said through a short message.

Efforts to get responses from Pertamina and EMP were unsuccessful.

Santos UK and JOB Pertamina Golden spike have debts of $2.39 million and $10.62 million respectively.

Mulyani said the income tax obligations were stipulated in Indonesia?s oil and gas contracts.

Private contractors must pay income tax based on as much as 48 percent of their gross revenue, while Pertamina?s obligation is only 40.5 percent of their gross revenue.

?As stipulated by regulations, the income tax must be paid by the 15th of the following month at the latest. The contractors must pay interest of 2 percent a month if they are late in this payment,? Mulyani said.

Data from the finance ministry shows that the income tax from the oil and gas sector last year reached $7.93 billion last year up from $3.54 billion in 2007. (*)