Foreign oil and gas companies ignore 'local content' requirement

The association of Indonesian oil and gas drilling companies (APMI) has accused foreign companies operating in the country's oil and gas exploration activities of ignoring the government's requirement to use 'local content' for at least 30 percent of their business activities, Suara Karya reported on Wednesday.

The association's chairman Eddyono Salatun said in Jakarta on Tuesday that many foreign oil and gas companies in the country did not meet the 30 percent local content requirement due to the lack of the government's control.

"BP Migas should pay serious attention to the problem. The regulation has been clearly defined, but it could not be fully implemented due to the lack of control," he said.

According to the regulation, foreign oil and gas companies should hire local companies to handle at least 30 percent of their business activities.

Eddyono said that the involvement of the local companies in Tangguh gas development project in Papua, as an example, was less than 10 percent. "BP Migas should improve its control so that this would not occur again," he added.

He also proposed the government to establish a special team in controlling the implementation of the 30 percent local content requirement. "To make it more effectively, the government should also include the association's members in the team," he added. (*)