RI?s oil, gas investment rank drops

Investment in Indonesia?s oil and gas sector has been in a worrying stage during the past three years. In fact, since last year, the country is no longer included in the 100 world oil and gas investment destination, after its rank fell from 25th to 80th in the previous year, the evening Suara Pembaruan daily reported.

The paper quoted chairman of the Indonesian Petroleum Association (IPA) Brian Marcott as saying Tuesday that the decline in the oil and gas investment was due to the lack of investor confidence in the country.

The crisis of confidence intensified as the country?s oil and gas sector entered a transition period with the recent launching of the new oil and gas law, Marcott said during a press briefing on the 28th annual conference of IPA in Jakarta Tuesday, adding that at the same the country was also in a transition in other areas particularly in politics with the launching of the regional autonomy policy.

To maintain investment, IPA urged the government to guarantee oil and gas contract and oil and gas operations in Indonesia. ?Contract guarantee and business operation are the most important issues among us right now,? Marcott said.

He reminded that the oil and gas sector played an important role in the country?s economy as it contributed 30 percent to the state budget revenue. He added that the current decline in the oil and gas investment would affect the economy in the next 4-5 years.

Meanwhile, Kardaya Warnika, an expert at the Ministry of Mineral Resources, said that the main factor behind the decline in oil and gas investment in the country was poor security condition not because of the new oil and gas law.

He argued that the investment declined had occurred since a couple of years ago when the new oil and gas law had not been launched.

He added that the new law did not affect upstream activities but only downstream activities as the government opens the sector to allow foreign investment to come in.(*)