11:43 | 21/09/2015 Global Economy
A large number of foreign investors in the oil and gas industry operating in Indonesia – one of the leading oil exporters in Asia – have decided to discontinue their business projects due to the country’s complicated procedures.
Illustrative image (Photo: AP)
According to Elan Biantoro, an Indonesian official working in the oil and gas field, regulations related to payments for land and construction tax and working age restrictions on petroleum experts are barriers for foreign investors keen to invest in the country.
Many big US companies have chosen to halt their investments in Indonesia, including Chevron which terminated its deep-water gas project worth 12 billion USD.
The situation is taking place as Indonesia’s oil and gas industry is facing difficulties; last year, the island country’s oil output dropped to the lowest level in the last 40 years.
Previously, the Indonesia State-owned oil and gas corporation Petamina announced that it is likely to cut 50 percent of its investment capital this year.
According to the Indonesian Petroleum Association, Indonesia will have to import 575,000 barrels of oil per day in 2015 in order to meet the country’s supply shortages.
Indonesia is now home to eight oil refineries with a designed capacity of nearly 1.17 million barrels per day, yet the actual capacity of projects stands only at 800,000 barrels per day./.