Urge the Government of Commission VII RPP Finish Soon Cost Recovery

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Urge the Government of Commission VII RPP Finish Soon Cost Recovery

Monday, 22 February 2010 09:47

                JAKARTA. The results of the Working Meeting (meeting) relating RPP and Cost Recovery of Oil and Gas Production Sharing between the Government (Minister of Energy and Mineral Resources and Minister of Finance) with Commission VII of DPR RI produce conclusions / decisions to the RPP on cost recovery as mandated by Law No. 26 Years 2009 to be realized Thursday (18 / 2).

The first decision is, of Commission VII DPR-RI urges the Minister of Energy and Mineral Resources of Indonesia, Minister of Finance and Head of BP Migas, to accelerate the completion of the RPP on cost recovery as mandated in the Law No. In 2009 about 26 amendments to the Law No. 41 Year 2008 on the state budget fiscal year 2009 which should become effective January 1, 2010.

Furthermore the second decision is, of Commission VII DPR-RI urges the Minister of Energy and Mineral Resources of Indonesia, Minister of Finance and Head of BP Migas, to improve the payment mechanism for the oil and gas funds to accelerate the repayment daerahdan deficiency payments to a number of areas that until now has not paid off.

Pemerinntah has prepared draft RPP where inside there are the main points of the return arrangements operating costs (cost recovery) and income tax provisions in the upstream oil and gas, as mandated by the Act, the RPP is made between the other main load - basic settings:

   1. Ensure that revenues derived from a Production Sharing Contract or other income as a result of the
       Cooperation Contract.
   2. Matters pertaining to provisions regarding the application of the principle of obtaining, collecting and
      maintaining the principles of fairness and income performed using good engineering principles applied to al
     l contracts.

Magnitude cost recovery vary widely, several factors that affect the amount of cost recovery is a characteristic of oil and gas operations, the macro economic conditions, world oil prices, and the imposition of cost recovery mechanisms. (ESDM)

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