Release: IPA: Clarification on issues

(Jakarta, August, 26, 2005) Ahead of the IPA Convention opening on August 30, and following the media briefing on August 25, the IPA Board of Directors felt it necessary to clarify a number of matters to ensure the smooth running of the convention.

The IPA is not questioning the existence of BPMIGAS, it is the legally established upstream regulator with supervision and control responsibilities. Consistent with the IPA Charter, the IPA always seeks to maintain constructive and friendly relationships with BPMIGAS and other government institutions.

The IPA has, however, said that the IPA and BPMIGAS need to work harder to realize both the regulatory objectives of BPMIGAS along with investor objectives of investing as quickly and efficiently as possible.

The IPA fully supports the objectives of the Oil and Gas Law No. 22/2001 and, is not seeking a review of the law. The IPA has, however, suggested that the process of changes to Law 22/2001 required by the Constitutional Court, and in the absence of an Implementing Regulations on Non-Tax State Revenues, the opportunity should be taken to address the inconsistent tax aspects of Article 31 of Law No. 22/2001 with the terms in the Production Sharing Contract.

The IPA also fully supports the government objectives of reducing uncertainty by fully addressing oil and gas matters in the proposed new tax law.

The IPA Convention objectives are to provide a forum for regular exchange of knowledge and ideas through discussion and interaction among all participants in the Indonesian petroleum industry, which includes scientists and engineers, government officials, PSC contractors, service companies, suppliers and investors. It is not a forum for public dialogue on complex legal and regulatory issues.

There are over 1,700 delegates enrolled to discuss some 100 technical papers aimed primarily at enhancing key aspects of the industry such as reserves and production.

The IPA fully supports the government?s objectives of increasing production to 1.3 MMstb/d in 2009. Similar to the government, IPA aims to mobilize the required increase in investment to achieve this important target.(end of release)

On behalf of the IPA Board of Directors:

Ananda Idris, Communication Comittee Chairman

Indonesian Petroleum Association

Tel: +62 (21) 523-1944, HP: 0811 984 822

ananda.idris@total.com