Uncertainty in regional autonomy causes a drop in oil investment
Monday, May 28 2001 - 05:30 AM WIB
The uncertainty in regional autonomy has been partly blamed for the fall in investment in the country's oil sector this year, Bisnis Indonesia reported on Monday.
Vice President of Corporate Public Affairs of PT Caltex Pacific Indonesia (CPI), A.R. Chaidar said the uncertainty on the country's autonomy law had discouraged foreign companies from investing in Indonesia.
"Oil and gas investors are mostly still waiting for the clarification of the autonomy law," he said in a seminar on oil and gas exploration held in Bandung last week.
Chaidar said that the government only signed three production sharing contracts this year, only a half of the six contracts signed in the previous year.
According to him, the three production sharing contracts this year were based on investment applications submitted before the introduction of the regional economy law early this year.
He added that the realized investment has so far reached only US$400 million. "Many companies have delayed their investment commitments due to the uncertainty of the regional law," he said.
The number of contracts signed in the last years plunged sharply from 20 contracts on 1998. The drastic fall was not only due to the uncertainty of the regional autonomy but also due to the lack of confidence in the country's overall investment climate, he added. ( *)