GR 79 on cost recovery under review
Wednesday, April 4 2012 - 02:43 AM WIB
Energy and Mineral Resources Ministry is reviewing Government Regulation (GR) Number 79/2010 on Cost Recovery to help improve investment climate in the oil and gas industry.
Evita Legowo, Director General of Oil and Gas, said that based on a recent evaluation by the Ministry the regulation has put investors in a wait-and-see approach in investing in Indonesia.
?We will talk about this again with the Finance Ministry. From our perspective, the Cost Recovery regulation will be reviewed,? Evita told petromindo.com. ?It?d be fine if there was only one or two investors objected to the regulation, but if all of them protest it, including IPA (Indonesian Petroleum Association), then it would definitely become our key consideration.?
IPA last year filed a judicial review petition against the regulation to the Supreme Court, but was rejected. Cost recovery is the amount of expenditures used by oil and gas contractors related with successful exploration and production of oil and gas that can be claimed back from (recovered) from the government. The GR 79 regulation issued last year limited the costs elements that can be recovered or claimed by the oil and gas contractors.
Editing by Dadan Wijaksana