Cost recovery must not be limited : energy minister
Jakarta (ANTARA News) - Energy and Mineral Resources Minister Darwin Zahedy Saleh said there should be no limit on cost recovery in mining, oil and gas investment projects.
"There should be no cap on cost recovery because it will obstruct investment," the minister said here Wednesday.
He said he would seek to communicate with the House of Representatives (DPR) to remove any caps on cost recovery in mining, oil and gas investments.
He said he had asked about it to the finance minister and she said that there was no limit on cost recovery.
"The essence is it should be more realistic with regard to which components deserve cost recovery," he said.
Darwin pledged the new formulation of cost recovery now still being discussed would not be effective retroactively and so "do not worry."
The minister believed investment in the mining and oil and gas sectors in 2010 would be better following improving global economic conditions.
The deputy chairman of the Indonesia Petroleum Association (IPA), Sammy Hamzah, meanwhile had called against including the cost recovery into the national budget.
He said cost recovery control could be done through tight supervision on costs outside operations cost.
House Commission VII member Satya Yudha shared his view saying the DPR planned to invite finance minister Sri Mulyani to a meeting to discuss the issue.
Based on the law on national budget the government is required to issue a government regulation on cost recovery before January 1, 2009 but until now the regulation has not yet been produced.
The ministry of energy and mineral resources meanwhile expects to be able to finish the formulation of the draft regulation before March 2010.
According to the 2010 budget law the cost recovery would reach US$12.005 billion.
The cost recovery issue has been considered one of the causes of the government`s failures in offering oil and gas operating regions to investors so far.
Only five out of 16 blocks offered in 2008/2009 have been taken. Meanwhile out of 17 blocks offered in the first round in 2009 only one was taken and out of seven offered directly only two were taken.(*)
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PubDate: 12/03/09 04:39
