The government admits the dilemma regarding several articles within Government Decree No. 79/2010 on Cost Recovery.
“We are waiting for the result of judicial review proposed to Supreme Court. It appears that they (Indonesian Petroleum Association/IPA) want to capitalize on the timing to bring the whole issue up,” said the head of Upstream oil and gas regulator BP Migas Security and Formality Division, Gde Pradanyana, at Hotel Mulia, Monday (04/07/2011).
He also admitted that BP Migas was currently in a tough and dilemmatic position to enact government policies while maintaining business with investors in mining sector.
“We are caught between a rock and a hard place. On one hand, we are a government agency. On the other, we must ensure investors’ comfort so that they won’t panic and abandon production,” he said.
If the investors were panicking, he feared explorations would be delayed and oil lifting target left unachieved.
As previously reported, on June 16th, IPA filed a judicial review on Government Decree No. 79/2010 on Cost Recovery and Income Tax Implementation in Upstream Oil and Natural Gas Industry.
IPA filed the judicial review as the decree might hamper investors in achieving their production target. The decree was signed by President Susilo Bambang Yudhoyono on December 20th, 2010.