Oil and gas investment for 2012 predicted at Rp 195 trillion
Wednesday, June 20 2012 - 09:33 AM WIB
Upstream authority BPMIGAS Chairman R. Priyono said that it had been an encouraging fact to see the increasing investment during the last few years and it had grown a feeling of optimism for the future. ?The key to the development of the oil and gas upstream industry is the investment,? he said when opening the 2012 economic and financial forum in Bandung, on Wednesday.
The oil and gas investment consist of four activities, namely production, development, exploration, and administration. Production contributes the most with an estimated amount of US$ 12,84 billion, followed by development with US$ 4,56 billion, exploration US$ 2,125 billion, and administration US$ 1,4 billion.
Priyono stated that for global investors Indonesia was attractive for investments. It has been indicated by several positive factors, including a relatively high economic growth, higher financial rating. The oil and gas upstream industry is expected to take the chance of getting the investments, as geologically speaking Indonesia has an attractive potential reserve of oil and gas.
To attract more investments, BPMIGAS has been active in dialogs with the ministry of finance with a view to providing more fiscal incentives to investors. ?The ministry has agreed to give incentives,? he said, adding that he hoped the production sharing contractors (PSC) would give more inputs on the incentives that should be given so that the government could better tailor its incentive policy to the need of investors.
BPMIGAS Financial Control Deputy Akhmad Syakhroza said that BPMIGAS would control the cost recovery consistently and sustainably. It is to maintain the economy of the project, the profitability of the oil and gas sector, and to keep it as a positive parameter of investments in Indonesia. ?In 2011 average cost recovery compared to the state income is 26 percent,? he said.
He said that the percentage was better if compared with those of other countries, such as Libya at 35 percent, Ivory Coast at 40 percent, Angola at 50 percent, and Uzbekistan at 60 percent. ?It has shown that the scheme of cooperation contracts in Indonesia is better than those applied by other countries,? said Syakhroza.
Editing by Benget Besalicto Tnb.