Govt to maintain assume, discharge incentives for oil, gas contractors

The government will maintain the so-called assume and discharge incentives for oil and gas contractors in the current revision of the Government Regulation No 79/2010, Bisnis Indonesia reported on Wednesday.

The paper quoted Secretary General of the Ministry of Energy and Mineral Resources Teguh Pamudji as saying that the assume and discharge incentives, which exempt oil and gas contractors from various taxes, will be maintained for contracts signed after the issuance of the 2001 Oil and Gas Law and before the issuance of the GR No 79/2010.

?For production sharing contracts (signed) after the issuance of the oil and gas law and before GR No 79, the assume and discharge concept is still valid,? he said.

The government announced on September 23 it has completed the revision of GR No 79, which will become effective once it has been signed by President Joko Widodo. The revision of the regulation promises various fiscal and non-fiscal incentives primarily for exploration activities.

But some oil and gas contractors have expressed concern that the revised regulation would also be applied to contracts signed after to 2001 and prior to the issuance of GR No 79, fearing that it would end the assume and discharge incentives in their contracts.

Executive Director of IPA Marjolijn Wajong said that such plan is a breach of contracts.(*)