Ministry to make exemption on cabotage

Some foreign-owned vessels, including drilling rigs, will be exempted from the law on cabotage until May 2011, Transportation Minister Freddy Numberi says as quoted by The Jakarta Post.

The temporary exclusion from the law, which restricts foreign-owned vessels from operating in Indonesia?s waters, would support the government?s oil production target, Freddy said.

"We will postpone the regulation for certain vessels. We still have several months to review the regulations on cabotage," he said adding that the government would seek approval of the exemption from the House of Representatives.

Freddy said he was optimistic the House would approve the plan. "The revision is for the national benefit."

Upstream oil and gas operator BP Migas said on Tuesday it would lose US$2.6 billion a year if the law on cabotage went into effect in January as planned. (*)