New Cost-Recovery Scheme for Oil-and-Gas Contractors Finally Regulated

In response to the sluggish conditions which currently prevail within the oil-and-gas industry, the government has finally decided to introduce a number of incentives and flexible provisions which address the cost-recovery scheme for oil-and-gas contractors (“Contractors”) through the issuance of Government Regulation No. 27 of 2017 (“Amendment”).The Amendment substantially changes a number of provisions which were originally stipulated in Government Regulation No. 79 of 2010 on Recoverable Operational Costs and Income Tax Treatment within the Upstream Oil-and-Gas Business Sector (“Regulation 79/2010”) and encompasses: