Indonesia Plans 'Fund' for Oil, Gas Sector

Indonesia is mulling establishing a fund to finance exploration and research in oil and gas sector. The source of the fund will be government’s non-tax revenue.

The country has been criticized for not doing enough to encourage exploration as oil and gas firms have had to venture into riskier areas, Jakarta Globe said in a report.

“Large firms are reluctant to invest in Indonesia because of the lack of accurate data and low-level technology adaptation. We want to address the issue by forming a petroleum fund,” the newspaper said quoting Deputy Energy Minister Rudi Rubiandini .  

The government has submitted a proposal for a revision of the 2001 Oil and Gas Law that would allow some of the revenue from the sector to be channelled into the new fund. 

In a bid to attract investors, the government is considering reviewing its current profit-sharing scheme with oil and gas contractors. 

In the current scheme, the state receives 70 percent of the profit.