bp migas not for policy change

Is this what is holding up the likes of EWC and other stocks making progress in Indonesia in the short term?

Indonesia’s upstream regulatory body BPMigas said Jakarta’s planned regulation mooted to improve the cost recovery mechanism will hinder investment in the country’s oil and gas sector.
The government is looking at means to improve the integrity of the cost recovery mechanism, which provides for oil and gas operators to be reimbursed for past costs spent once their projects begin production.
However, BPMigas said the planned move from the contract regime to the public regime would hamper the investment climate in the industry, Jakarta Post reported.
Moving to the public regime would mean any violation on the clauses of the production sharing contracts will fall under the domain of criminal law rather than civil law, according to BPMigas.
This will invoke fear and decrease investment in the oil and gas sector, spokesperson Amir Hamzah told Jakarta Post.
The full content of the new regulation has yet to be revealed to the public, but during a recent Indonesian Petroleum Association (IPA) conference, BP Migas Priyono said that the regulation would reduce the contractors’ capital spending, but not their operating costs.
Jakarta has capped the cost recovery budget at US$11.05 billion this year and US$12 billion for 2010.
The budget cap is blamed for the lower than expected production and lack of investor interest in the last bid round for Indonesia’s oil and gas blocks.
The state budget sets the oil production target at 960,000 barrels per day, but, as of the end of October, oil production achieved was only at 948,670 bpd, Priyono said in a parliamentary hearing.
Priyono voiced concerns over unplanned shutdowns stemming from responses to caps on cost recovery payments.
These have contributed to production losses of about 20,000 bpd, the BPMigas chief said.
Data from BPMigas showed production for several contractors, including Hess and Kangean Energy, are below the set targets, Jakarta Post reported.
Hess is only producing less than half of the planned output and Kangean meeting only a quarter of its target.
Director general for oil and gas Evita Legowo has also blamed the cost recovery cap for the low take-up of concessions on offer from last December to this April.
Indonesia only managed to award five out of 16 blocks on offer.