Three Upstream Oil and Gas Incentives Not Yet Approved

By Editorial Team 26/10/2020
oil and gas industry
Summary

The Upstream Oil and Gas Special Regulatory Task Force (SKK Migas) continues to seek incentives for the upstream oil and gas sector. Head of SKK Migas Dwi Soetjipto said the provision of incentives was an effort to curb the decline in upstream oil and gas investment as a result of COVID-19. "We're taking steps to prevent a bigger decline. There are nine stimuli that have been and are being processed," he said in a virtual press conference on Friday (10/23).

Currently, only three incentives are still being discussed. First, the tax holiday for income tax (PPh) in all oil and gas working areas. Second, tax incentives for businesses to support upstream oil and gas activities to maintain the business economy. This takes the form of postponement or reduction of up to 100 percent indirect taxes and support from ministries that foster upstream oil and gas support industries, namely the steel, rig, and oil and gas services industry. Third, the elimination of the cost of utilizing the Badak LNG Refinery of US$0.22 per MMBTU. "Currently, discussions are being held between SKK Migas, the State Asset Management Agency (LMAN), and the Finance Ministry's Directorate General of State Assets (DJKN)," Dwi said.

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