JAKARTA, Nov. 20 (Xinhua) -- A senior Indonesian official said that the country's investment attractiveness in the oil and gas industry may be lessened amid wariness of business players following a recent decision by the Constitutional Court to disband the nation's upstream oil and gas regulatory bureau, local media reported on Tuesday.
Deputy Energy and Mineral Resources Minister Rudi Rubiandini said that the disbandment of the regulator, BPMigas, would likely affect the former OPEC member's investment situation as illustrated in the annual Global Petroleum Survey for example.
Last year, Indonesia was ranked 111th out of 135 surveyed countries due to its Oil and Gas Law, which was deemed "not appealing to investors," poor coordination between the central government and local administrations, as well as the country's rampant corruption.
The survey, conducted by the Canada-based Fraser Institute, ranked Indonesia 111th out of 133 countries. The latest ranking is expected to be published later this year or next year.
"It is not impossible [for the Indonesia's investment level] to go down following the ruling even though the government has formed a task force under the supervision of the Energy and Mineral Resources Minister [Jero Wacik] to temporarily take over BPMigas' old functions," Rudi was quoted by the Jakarta Post as saying.
"The investors will see that in Indonesia, a law can be annulled like that. They will become cautious over their contracts, which are beneath the law itself. People [the investors] will be afraid," he said.
The top official said the government hoped that through the implementation of a presidential decree and two ministerial decrees on the formation of the task force, oil and gas contractors would become convinced to carry on their business here.
The court's decision came last Tuesday as part of their verdict granting parts of the judicial review petitioned by several organizations and individuals, ranging from former ministers to politicians, who deemed the erstwhile supervisory body " unconstitutional."
"Since Thursday last week, two days after the verdict was issued, the activities in the oil and gas business have been getting back on track," said Rudi, adding the estimated state loss following the two-day "vacuum" in the industry would be more than 2 trillion rupiah (about 207.7 million U.S. dollars).
Jero told reporters on Monday that he was "upbeat" that investment in the oil and gas sector would continue to grow after the formation of the temporary task force.
Around 303 oil and gas contractors currently operate in Indonesia, with 74 of them having entered the production stage, according to the latest data from the government.