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)