9 Stimulus Packages Offered to Maintain Oil and Gas Investment

Saturday, 24 October 2020 - Dibaca 708 kali

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 315.Pers/04/SJI/2020

Date: 24 October 2020

9 Stimulus Packages Offered to Maintain Oil and Gas Investment

The government ensures that it will continue to maintain the investment climate in the upstream oil and gas subsector. This is done by providing nine stimulus packages, which is part of an effort to curb declining investment in the upstream oil and gas due to the Covid-19 pandemic.

"We are taking steps to prevent a greater decline in investment (of oil and gas) in Indonesia. There are 9 stimulus packages that have been and are being processed," said Dwi Soetjipto, Head of Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas), in a virtual press conference on Friday (23/10).

The stimulus package that has been implemented is the postponement of reserve funds for post-operation activities or Abandonment and Site Restoration (ASR). This incentive has been provided by SKK Migas. A total of 30 oil and gas contractors have been recorded to enjoy the relaxation of the ASR funds payment for this year.

Next, there is the postponement or abolition of Value Added Tax for Liquified Natural Gas (LNG) through the revision of GR 81/2015 on Import and/or Delivery of Certain Taxable Goods that are of Strategic Nature and Exempted from VAT, abolition of rental fees for State Asset in the upstream oil and gas, and gas sales at discounted prices for all schemes above Take or Pay (TOP) and DCQ.

The government has also made fiscal adjustments (flexibility) by providing incentives for a certain time period, such as accelerated depreciation, temporary split changes, and full price DMO.

Meanwhile, the stimulus packages that are still being processed are tax holiday for income tax in all oil and gas working areas and postponement or reduction of up to 100% of indirect taxes. "These packages will be discussed between Directorate General of Oil and Gas, Directorate General of Taxes, Directorate General of Budget, and the Fiscal Policy Agency," Dwi explained.

There is also the elimination of utilization cost of Badak LNG Refinery Plant of USD0.22/MMBTU currently being discussed between SKK Migas, LMAN, and the evaluator team of Directorate General of State Assets.

Finally, support is also gained from the ministries that foster the upstream oil and gas supporting industries (steel, rig, services industries) on taxes for these supporting businesses.

"A variety of efforts have been prepared to improve investment in the upstream oil and gas in Indonesia," said Dwi. (IY)

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