The Indonesian Petroleum Association says there are differing opinions between the Tax Directorate and oil and gas contractors regarding the statement that 13 contractors have underpaid their taxes. The Vice President of the IPA, Sammy Hamzah, stated that this difference of opinion has occurred due to the interpretation of the usage of tax tariffs according to pre-existing treaties as well as the findings of an unfinished audit regarding cost recovery.
Jakarta – With effect from 28th July 2011, Jim Taylor, General Manager of ConocoPhillips Indonesia and previously Vice President of the IPA, will replace Ron Aston and assume his position as the new President of the Indonesian Petroleum Association (IPA). Ron Aston is leaving the country for his new assignment as the new General Manager of Talisman Malaysia Limited.
On July 28, 2011 a gathering was held at the Bimasena Lounge to bid farewell to Pak Ron Aston, the President of the Indonesian Petroleum Association (IPA) who is leaving the country for his new assignment as the General Manager of Talisman Malaysia Limited.
The Executive Agency for Upstream Oil and Gas (BP Migas) stated that the issue of Rp 1.6 trillion in tax arrears of three oil and gas companies from 1991-2008 is caused by the tax treaty and royalties for transfer of ownership of oil and gas working areas.
The Energy sector, particularly oil and gas, is in a dire condition due to the mismanagement of natural resources, when actually as a nation we should be grateful to have such abundant resources. Due to overcomplicated management, crude oil production has consistently missed targets for the last couple of years while in the downstream sector,consumption keeps increasing uncontrollably.
The Executive Agency for Upstream Oil and Gas (BPMIGAS) have requested that the Government Regulation no. 79 of 2010 on Recoverable Operating Costs and Income Tax Treatment in the Oil and Gas Upstream Sector (GR Cost Recovery) should not be applied to existing contracts in order not to disturb the contracts that have been running for a long time, says the BPMIGAS Chairman. The implementation of the policy will affect the return on investment and the legal security of investors.
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).
The Indonesian Petroleum Association (IPA) believes the cost recovery policy could potentially depress oil production. “Not only reduce production, the regulation is predicted to reduce the interest of foreign investors in investing,” said IPA President Ron Aston in Jakarta late last week.
JAKARTA: Despite the government having prepared the implementing regulation on Government Regulation No.79/2010 regarding cost recovery, the GR is still unworkable because it is fundamentally contrary to the prevailing law. The Indonesian Petroleum Association (IPA) Attorney Todung Mulya Lubis said that basically there should be no rules which conflict with its higher regulations.
Indonesian Petroleum Association (IPA) said on Monday that Indonesia may lose at least 150,000 barrels per day of its existing hydrocarbon production if the government continues to apply new cost recovery ruling that the association saw detrimental to upstream investment.