- The Indonesia Deepwater Development project remains a national priority as a part of efforts aimed at maintaining gas production in Indonesia. The government is therefore currently in the process of preparing various stimulus measures and incentives aimed at accelerating the completion of said project. A recent statement issued by Indonesia’s Minister of Energy and Mineral Resources, Arifin Tasrif, affirmed that this project has the full support of the government in terms of its aim to fully exploit the country’s available gas sources.
- In response to the above goal, the Chairman of the Special Task Force for Upstream Oil and Gas (SKK Migas), Dwi Soetjipto, has stated that a total of nine stimulus measures have been proposed to the government in order to attract investment to the upstream oil-and-gas sector. Mr. Soetjipto has also further clarified that under one of the newly relaxed policies, several Cooperation Contract Oil-and-Gas Contractors (Kontraktor Kontrak Kerja Sama /KKKS) will now be able to monetize any oil-and-gas potential that they manage.
- The nine proposed stimulus measures break down as follows: 1) Postponement of cost reserves (pencadangan biaya) for post-operational activities; 2) Income-tax holiday; 3) Elimination of the utilization of liquefied natural gas (“LNG”) refineries; 4) Postponement or removal of value added tax for LNG; 5) Elimination of rental fees for upstream state oil-and-gas property; 6) Indirect tax postponements or reductions of up to 100%; 7) Allowing the sale of discounted gas; 8) Flexibility in relation to fiscal terms; and 9) Tax discussions for upstream oil-and-gas supporting businesses.
- Finally, in accordance with Regulation of the Government No. 79 of 2014 on National Energy Policy, gas is being targeted to make a contribution of up to 22% to the national-energy mix (bauran) by 2025. Meanwhile, national gas realization as per 2020 had already reached a level of 19.36%. (KEMENTERIAN ESDM)
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