Problems In Land Clearance Hampering Oil Investment

Jakarta, Dec 19 (ANTARA) - Land clearance is one of the challenges hampering investments in the oil and gas sector, PT Sele Raya chairman Eddy Tampi said. "The compensation value of land clearance is rather high, as it is multiplied with market price. This serves as a main constraint in clearing land for oil and gas investments," Eddy said here on Wednesday. He said at a discussion on the status of oil and gas investors in Indonesia that besides the problem of compensation, negotiations on land clearance also took a long time, thereby hampering the drilling process. "The average length of time needed for the negotiation process is one year, and this delays state earning," he said. He mentioned several matters that had to be attended to in investing in the oil and gas sector, such as principle licenses on drilling, police permits, permits from the customs office to take drilling equipment to the location, and the creation of conducive conditions for investors. Eddy said a company had to spend some US$150 thousand on one-month�s preparation. Therefore, if the process took one year, the company would need to spend some US$1.8 million. "The other impact of a delay in production is that the state has to import fuels; that would reduce foreign exchange reserves," Eddy added. He expressed hope that the authorities would issue speedy drilling principle licenses in the investment process. "We also hope that the police will also be speedy in issuing a permit, and (the permit) would be effective longer than it used to be. We hope it can be extended for one year," he said.