Govt drafts incentives for exploration<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
In a bid to attract exploration efforts in the country's eastern
\nfrontier, the government is drafting new incentives, which may
\ninvolve a shorter commitment period for exploration.<\/p>\n
Chairman of the Upstream Oil and Gas Regulatory Agency (BP
\nMigas) Kardaya Warnika said the agency would propose to the
\nMinistry of Energy and Mineral Resources that the exploration
\ncommitment be limited to geological studies and seismic testing
\nonly.<\/p>\n
\"Drilling, usually conducted after successful seismic tests,
\nwill be left as an option, not a commitment,\" Kardaya said on
\nFriday, after attending the inauguration of 13 oil and gas fields
\nvalued at US$1.2 billion by President Susilo Bambang Yudhoyono.<\/p>\n
\"The commitment (period) can be halved from six years to three
\nyears,\" he said. \"This proposal was based on inputs from
\ninvestors and hopefully can make the frontier area more
\nattractive.\"<\/p>\n
In regular tender process to get an oil and gas block, the
\ngovernment considers bidders' plans for geological and seismic
\ntests, as well as the number of wells to be drilled.<\/p>\n
Kardaya further said that the agency was still studying
\nincentive options for brown fields, which are fields that have
\npassed their peak period of production, to make them commercially
\nviable.<\/p>\n
\"We cannot generalize incentives for brown fields as the
\ncondition in one area differs from the others,\" he said.<\/p>\n
Meanwhile, state oil and gas firm PT Pertamina, which has 41
\nbrown fields identified so far, has already started offering the
\naging oil fields to investors.<\/p>\n
Pertamina's president director Widya Purnama said that four
\nmulti-national investors, including the China Petroleum &
\nChemical Corp., had shown interest in partnering up to develop
\nbrown fields.<\/p>\n
\"We are ready to open the data room. They can choose the areas
\nthey want to assist in developing,\" said Widya.<\/p>\n
Indonesia is in dire need for new oil discoveries, as crude
\nand condensate output decline by an average of 5 percent annually
\ndue to aging fields.<\/p>\n
With current production at 1.075 million barrels per day
\n(bpd), the country still has to import 300,000 bpd of crude and
\n400,000 bpd of fuel products to meet domestic demand.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-drafts-incentives-for-exploration-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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