IPA files judicial review on cost recovery ruling

Indonesian Petroleum Association (IPA) has filed judicial review petition with the Supreme Court, asking the court to drop a number of articles in Government Regulation Number 79/2010 on Cost Recovery.

Director General of Oil and Gas Evita Legowo confirmed the judicial review but declined to give further detail.

IPA officials contacted by Petromindo.Com also declined to comment, but a government source said that the judicial review was filed on Thursday.

The source said that IPA opined that a number of articles in the GR 79/2010 contained a number of inconsistencies with higher regulations, including the articles that required existing PSC contractors to retroactively adjust clauses in the PSC in accordance with GR 79/2010 and excessive authority of Tax Office in PSC.

Industry players have been voicing concern that the GR 79/2010 has created uncertainty in upstream oil, gas industry and would shy away investment as it has the potential to breach sanctity of contract. (godang)