2017, Indonesia's Oil and Gas Investment Climate Plummets

Based on the 2017 Global Petroleum Survey report, Indonesia's upstream oil and gas investment climate plummeted to 92nd out of 97 jurisdictions, down from 79th the previous year. This indicates that Indonesia's oil and gas investment climate is less competitive than other Southeast Asian countries.

The 2017 Policy Perception Index survey conducted by the Fraser Institute ranked Indonesia with a score of only 35.01 out of 100. This investment climate score lags behind other ASEAN member states such as Thailand, Brunei, and Malaysia. Indonesia even ranked below Cambodia, which scored 41.35 and ranked 90th out of 97 jurisdictions.

The imposition of taxes during exploration activities and the implementation of the gross split scheme (replacing the previous production sharing contract or PSC) are cited as reasons for investors' reluctance to invest in the domestic oil and gas sector. This is evident in the lack of interest in several oil and gas working area tenders. The 2017 oil and gas block auction was also postponed due to the incomplete tax regulations for the gross split scheme.