Oil and gas exploration slows down in Indonesia

BP Migas head Rachmat Sudibyo said many investors had decided to postpone their exploration activities because of the government's decision two years ago to end a tax waiver on imported materials and equipment for petroleum exploration and production activities.

"Investors are confused because they have to pay tax even before they obtain oil or natural gas from exploration, so they have put their exploration on hold until this issue is sorted out," Sudibyo told The Jakarta Post.

In the past, investors only paid import taxes if exploration proved successful. Oil exploration has also been hampered by the government's autonomy policy, started in 1999.