The Energy and Mineral Resources Ministry has issued Ministerial Decree No. 47/2017 on the mechanisms of investment return in upstream oil and gas business to amend the previous Decree No. 26/2017 on the same matter.
The decree, signed by Energy and Mineral Resources Minister Ignasius Jonan on Aug. 2, generally did not see many changes compared to its previous version except on unrecovered costs in oil and gas production, Deputy Minister Arcandra Tahar said.
“The decree has set the depreciation period of a work contract at five years at most,” he said in Jakarta on Friday. “The establishment [of the period] helps determine the value of investment to be returned as well as the [cost recovery] deadline.”
In the previous version, the government recovered all costs that had yet to be claimed in contracts without a time limitation. “In the new decree, only the latest investment can be reimbursed,” said Arcandra.
Furthermore, according to the new decree, the value of any investment return is subject to review by the Upstream Oil and Gas Regulatory Special Task Force (SKKMigas).