Jakarta (ANTARA News) - The government should soon amend Law No. 22/2001 on Oil and Gas as part of its efforts to attract foreign investors, particularly for development of new oil fields in the country, oil observer Kurtubi said here on Saturday.
He said investment in Indonesia had been made even more difficult by the adoption of illogical procedures such as the lengthening of the investment licensing procedure. Previosly an invstment license could be obtained by completing formalities through various agencies functioning under one roof but now the investor`s application had to pass through at least five offices, he said.
Investors were now also reluctant to invest in oil exploration business in Indonesia because they had to pay taxes and other levies even before they had found any oil reserves.
"It is only logical that the number of investors in Indonesia has decreased drastically. The investment climate in the oil and gas sector is not conducive," Kurtubi said.
The best way to find clear indicators of the unfavorable investment climate in Indonesia was by looking back at exploration activities in the past, he said.
He said in the 1980s and 1990s, some 250 new oil wells were explored annually but since 2000, only about 60 new wells a year had been explored. There was even a period when only 30 wells were explored a year.
Kurtubi said geological research had shown that Indonesia still had oil and gas reserves totaling 80 billion barrels which were enough to meet the country`s needs over 100 more years.
"The oil reserves are to be found in 60 cavities in Central Sumatra, Natuna, Makassar Strait, West Java, East Java, Papua, West Nusa Tenggara offshore and around Maluku," he said.
The oil observer said that to explore the oil reserves about US$200 to US$400 million were needed annually.
Besides, he said, the country`s liquefied natural gas (LNG) reserves also were also estimated to still reach 350 trillion cubic feet. One of the regions in Indonesia which had a large LNG deposit was Central Sulawesi where a factory could be set up with a capacity of three million cubic feet per annum. (*)