Government vows attention to oil industry concerns

Government vows attention to oil industry concerns

JAKARTA (JP): President Soeharto said yesterday Indonesia
would continue to pay attention to the hopes and interests of its
business partners in the oil industry regarding the various
procedures and regulations that affect their operations.

"Creating a conducive climate and constantly adjusting to
developments will keep Indonesia attractive to new investors,"
Soeharto told the Indonesian Petroleum Association's 24th annual
convention, held at the Jakarta Convention Center.

Soeharto opened the three-day meeting in a ceremony which was
also attended by First Lady Tien Soeharto, Coordinating Minister
of Trade and Industry Hartarto and Minister of Mines and Energy
I.B. Sudjana.

Soeharto said oil and gas resources are still needed to
stimulate economic growth and that, consequently, new investments
have to be stimulated in order to discover new oil and gas
reserves.

He said that the state-owned oil company, Pertamina, has
worked together with its business partners on the basis of a
spirit of mutually beneficial cooperation.

Cooperation

"Naturally, problems may arise in such cooperation. What is
important is that they should be resolved through dialog and
consultations," he said.

The President asked Pertamina to improve its management in
accordance with corporate economic principles that are oriented
toward efficiency, productivity and profit.

Meanwhile, the president of Chevron Corporation of the U.S.,
Kenneth T. Derr, said that the Indonesian government should renew
the concept of the production-sharing contract, including tax
consolidation.

"Giving further tax incentives will increase oil and gas
exploration in Indonesia," he told the convention.

He said he hoped that the risk of exploration would be
included in the production-sharing contract system, in order to
decrease operational costs.

Chevron Corporation of California together with Texaco of
Texas own Indonesia's largest and oldest oil producer, PT Caltex
Pacific Indonesia (CPI).

Answering reporters's question, CPI president Baihaqi H. Hakim
confirmed that IPA had submitted suggestions for further tax
incentives to the government.

"We will soon discuss the suggestions with the government," he
added.

Earlier, Minister of Mines and Energy I.B. Sudjana said that
the suggestions for additional tax incentives would be approved
by the government if there were benefits for both Indonesia and
oil investors.

Coordinating Minister of Trade and Industry Hartarto, in his
keynote address to the convention, said that the government will
continue to liberalize trade and investment, with a steady stream
of deregulatory measures.

He said that the government would remove all obstacles that
may hamper the flow of investment, including investment in the
oil industry.

IPA currently has 55 member companies operating in oil
exploration and production and 151 associate members operating in
services supporting the oil industry.

The convention's agenda includes technical discussions on
various aspects of the petroleum industry. (04)