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Policy & Regulation

Jakarta’s upstream incentives miss the mark

Industry players are unhappy with the Indonesian government's new incentives to attract investment and revive the country’s ailing upstream sector Industry players are unhappy with the Indonesian government's new incentives to attract investment and revive the country’s ailing upstream sector.
By Damon Evans 5 October 2016 Asia Pacific / Exploration & Production 0 22243
The Lampung FSRU. Without upstream investment, Indonesia could be a net energy importer by 2019. (Höegh)

The Indonesian government has unveiled a set of incentives to attract much-needed investment and revive the country’s ailing upstream sector, but industry players are unhappy with Jakarta’s changes. Failure will leave Indonesia increasingly reliant on energy imports as oil and gas production continues its rapid downward trend.

Investors are disappointed with the tax and non-tax incentives to be offered in the upcoming revision of Government Regulation 79 (GR79) – which voided a fiscal protection clause on cost recovery under production-sharing contracts (PSCs) signed before its implementation...