Oil companies threaten to cancel projects

Due to uncertainty regarding regulation on import duty and taxes on oil equipment, several local and foreign oil and gas companies have threatened to delay and even cancel their projects in Indonesia, BPMIGAS official said as quoted by Republika.

Deputy Chairman of the Upstream Oil and Gas Regulatory Body, BPMIGAS, Abdul Muin said in Jakarta Thursday that companies complaining about the new regulation on the import duty and taxes on oil equipment are mostly new companies that will conduct offshore projects with high cost and high risk.

One of the companies that have lodged complaint is US-based oil firm Marathon Oil, he said.

The company once left Indonesia but later decided to return after seeing investment climate had improved in the country.

"But, when the came back to the country, there was a new regulation on import duties," Abdul said. (*)