VIVAnews - In the past months, a number of players in oil and gas industry viewed Indonesia as a promising country for oil and gas investment. However, the view has been altered, as concluded by PriceWaterhouseCoopers Indonesia (PwC) after a survey conducted over the companies which represent 68 percent of oil production in the country.
"The light (of hope) is likely beginning to fade," said William Deertz, technical adviser of PwC on oil and gas issues today, May 21.
Deertz explained that the general perception from respondents saw that the decrease in capital expenditure would likely occur within the next five years.
According to Deertz, the situation is resulted from significant concerns about the industry. The similar survey set out in 2008 showed that the majority of respondents considered that capital expenditure would rise within future years. "Such a pessimistic view is worrying," said Deertz.
Deertz concluded that the investment climate in Indonesia should be improved. Indonesia should provide certainty in regulations, consistencies and competitiveness aiming at earning more investments.
In the previous survey, PwC found several issues that may hamper investment in Indonesia's oil and gas sector such as:
1. Intervention from state agencies like tax authority. 2. Uncertainty on cost recovery and audited result from Oil and Gas Regulator or Finance and Development Supervisory Agency 3. Validity of oil and gas contract 4. Corruption, collusion and nepotism 6. Ambiguous regulation, such as Law No.22/2001 on Oil and Gas