Indonesia to Push More Subsidy Reform, Resolve Legal Problems For Investors - Economy Minister

   By Ben Otto 
 

JAKARTA--Indonesia will revamp long-outdated oil and gas contracts, untangle legal problems that have hit companies like Chevron (CVX) and IM2, and create foreign-friendly incentives as it seeks to top 8% growth in the coming years, its chief economics minister says.

The country could also adjust its policy of subsidizing fuel prices in Southeast Asia's largest economy again this month, Sofyan Djalil, new coordinating minister for the economy, told The Wall Street Journal in an interview.

In the past, "we have said to investors, come to Indonesia; but they come here and their hands are tied, their legs tied," Mr. Djalil said. "By implementing good policy, we believe we can attract more investors to Indonesia."

He also said the former OPEC member will revise its decades-old scheme of oil and gas production-sharing contracts "very soon" to launch an era of new era of exploration and production--addressing a major complaint of investors who say the current contracts, which have their origins in the easy-oil era of the 1960s, don't reflect the costs of today's riskier deep-water and remote-region plays.

"We have so much potential is our waters," he said. "But we have to change the PSC scheme, because the scheme is very archaic already."

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