Investment in the upstream oil and gas sector in the first half of 2017 reached US$3.98 billion, accounting for 29 percent of work program and budget set at US$13.8 billion, the Upstream Oil and Gas Regulatory Special Task Force (SKK Migas) said.

“The investment reaches only 29 percent of the target. The progress falls short of expectation. We are also not happy with the realization of investment which reaches 29 percent,” SKK Migas Chief Amien Sunaryadi said here on Thursday.

The lower-than-expected investment was the result of double impact of investment in the upstream oil and gas sector which caused the performance of supporting industries to decline. Hence, investment in the upstream oil and gas sector is important for the country, he said.

He noted that the declining global crude prices and complicated regulations in the past were among the causes of low investment in the upstream oil and gas sector.

“The wish to make investment depends on economic calculation. If the global crude prices are low, doubt still prevails particularly in exploration and no deposits are found, then exploration and development cannot be conducted,” he said.

He said the newly issued regulations are not the cause of low investment in the upstream oil and gas sector.

“As I have observed, the newly-issued regulations (have no impact on the low investment). Maybe the regulations issued a few years ago had an impact,” he said.

Moreover, the government has revised presidential regulation number 79 of 2010 concerning operating costs that can be returned, he said.

source: antaranews