Govt?s oil block tender receives good response

The government?s tender of 10 oil and blocks has received positive response from both domestic and foreign investors despite uncertainty related to tax policy in the country?s upstream oil and gas sector, Investor Daily reported on Monday.

Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Arifin Takhyan said that investors were not really worried about the tax payment because they knew that the government was working hard to settle the problem.

In addition to the government?s strong commitment to settle the tax problem, it had also offered attractive incentives for those who wanted to develop the 10 oil blocks, Arifin said. Investors operating in certain location will, for example, receive a bigger oil or gas production split, he said.

The 10 oil and gas blocks, auctioned off earlier this month, are mostly located in Natuna Sea, Sulawesi Sea and Arafuru Sea.

Oil and gas analysts have earlier said that the government?s failure to settle the tax problem would discourage investors from entering the country?s high cost oil and gas exploration. They said that the government?s policy to collect import tax for the equipment procured for exploration activities should be removed. Otherwise, no investors will invest in the country?s oil and gas exploration and production activities. (*)