Govt mulls another incentive for deep sea projects

The government is discussing the possibility of waiving land and building tax on offshore exploration activities for oil and gas contractors, the latest incentive to help encourage the development of deep sea operations.

If materialized, this would come on top of other incentives already in place for deep water projects, including attractive splits (up to 65:35 for oil and 60:40 for gas), zero percent import tax and a ruling not obliging contractors to submit firm commitment in the form of exploration drilling activities in the first three years of operation.

Evita Legowo, Director General of Oil and Gas at the Energy and Mineral Resources Ministry, said in a statement that the Ministry is engaging talks with the Finance Ministry on eliminating land and building tax for offshore explorations.

?We are working on the best way to deal with this issue. We have started to talk. But the discussion is still underway. Nothing is fixed yet, but the responses are positive,? she said.

Editing by Dadan Wijaksana