Indonesia scraps land tax on E&P

Indonesia has scrapped a land tax on oil and gas exploration, in a move to encourage exploration at a time of concern about falling oil prices. According to a Finance Ministry decree, the tax office will no longer assess a 0.5% ‘land and building tax’ charged on areas of exploration activity. Oil companies operating in Indonesia include Chevron, Exxon Mobil, ConocoPhillips and Pertamina.

Meanwhile, Indonesia’s new oil and gas governance team has recommended that Petral, the trading arm of Indonesia’s state energy company Pertamina, should undergo a management shake-up, forensic audit and be stripped of its rights to handle oil imports. However, there is no suggestion to disband the Hong-Kong based organisation or relocation to bring more transparency to operations that supply Indonesia with one third of its daily oil needs.