Fri, 16 Jun 2006
Govt told to simplify import procedures for oil industry

The Jakarta Post, Jakarta

The Indonesian Petroleum Procurement Association (APPI) has called on the government to simplify import procedures for equipment used in oil and gas exploration and production.

APPI's secretary-general M.H. Thamrin told reporters during a media gathering Wednesday that the government needed to act quickly by issuing a joint ministerial decree, considering that the area involved four different ministries -- the Energy and Mineral Resources Ministry, Finance Ministry, Trade Ministry and the Industry Ministry. Not only were many of the prevailing regulations excessively complicated, but many also conflicted with each other.

"Because of the regulations, we have to have our imports checked by three different institutions," Thamrin said, adding that this not only took time but was also very costly.

At present, imports of oil and gas equipment have to be verified by the Oil and Gas Upstream Regulatory Agency (BP Migas), customs and excise, and the Trade Ministry. These procedures are intended to prevent illegal markups resulting from the fact that under the production sharing contracts with the oil and gas producers, expenditure incurred on exploration and production is reimbursed by the government.

"Given the existing mechanisms, differing perceptions frequently emerge among the various institutions involved. This tends to slow down imports and results in us falling behind schedule in the field," he said,

Thamrin said that such delays had resulted in importers suffering heavy losses arising out of extra rental payments for the warehouses where the imported goods were stored prior to being allowed to leave port.

He said, for example, that the regulation that allowed customs and excise to exempt particular goods from inspection was not recognized by the other two institutions.

"I think it would be better for the government to have only one regulation, and only one inspecting agency, such as PT Surveyor Indonesia," he said.

Indonesian Oil and Gas Drilling Contractors Association chairman Bambang Purwohadi said that it was essential that the APPI proposal be acted upon soon by the government in order to support the growing level of prospecting by the country's oil and gas industry.

Bambang said that as things stood at the moment, a company could expect to wait for more than a month before taking delivery of their imported equipment/goods. (09)



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