Jakarta oil contractors agree to export ruling

JAKARTA: Indonesia's oil and gas contractors have all agreed to comply with a controversial rule that forces them to put their export proceeds through a local bank rather than directly offshore, the central bank said yesterday.

The agreement follows protests by at least two energy contractors and a warning from the government that their shipments could be blocked if they refused to abide by the rule, being implemented this year.

"All the oil and gas contractors agreed to comply with BI regulations on export proceeds and use local banking services," central bank spokesman Difi Johansyah said in a text message to reporters.

Southeast Asia's largest economy is pushing for massive expansion of its energy sector to meet rapidly expanding domestic demand.

Indonesia's top oil producer Chevron Corp has warned that investment will decline if confusing and sometimes overlapping regulations are not resolved, including the central bank regulation.

Another leading contractor, Total SA, has said it would be impossible to comply.

The issue has been seen as adding to the complexity of investing in Indonesia and which a number of companies have warned could start to deter foreign investors. For the moment, however, they are pouring record amounts into the world's fourth most populous nation and one of its fastest growing economies. Reuters