Jakarta: Encouragement of the government for oil, gas and geothermal energy sectors - which amounts to 2.5 trillion Rupiah (U.S. $ 225 million) - can contribute to the consolidation of the exploration of schedules, but the years of incitement may be too short to long-term benefits.
However, Sammy Hamzah, Vice President of the Indonesian Petroleum Association (IPA), said the incentive conditioning, launched by the Government would be very useful for oil and gas contractors to their current activities in the middle of the present crisis.
"With the momentum, we expect that the exploration could take place as planned, even if the economic situation is now similar to that of six months," said Sammy through a Short Message Service (SMS) on Tuesday.
The government Monday launched an exercise for a total value of Rp 50 billion (U.S. $ 4.6 billion) to help the country survive the economic crisis. The package will be applied to the year 2009.
Included in the package of incentives to import duties, taxes and value added tax on some imported products used in oil, gas and geothermal industry. The policy is in fact an extension of a scheme of the Ministry of Finance in 2008.
For 2009, the government considers that the exemption of fees for the three companies generated Rp 2.5 billion of government revenue, now lost.
The government said oil and gas expected this year to attract investment to $ 16.64 billion, an increase of $ 12.21 billion in 2008.
Sammy said the incentive would have indirect positive effects on production.
Meanwhile Suryadarma, chairman of the Indonesian Geothermal Association (API), said that the incentive that a year making it difficult for geothermal operators in the calculation of the long-term costs and values their projects.
"There is no guarantee that the impetus will be given again next year?" he said.
Suryadarma said the incentives should ideally be given for the entire duration of a contract for geothermal energy, which last between 25 and 30.
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