Govt eyes incentives from gas fields<\/p>\n
Leony Aurora, The Jakarta Post\/Jakarta<\/p>\n
In a bid to increase gas output and secure domestic supply, the
\ngovernment is planning to draft another incentive package to lure
\ninvestors to exploit the country's marginal gas fields.<\/p>\n
Upstream Oil and Gas Executive Agency (BP Migas) chairman
\nKardaya Warnika said on Friday that although the details of the
\nincentive package were being studied, one definite requirement
\nwould be for the output to be sold on the domestic market.<\/p>\n
\"Within one or two months we will come up with a more concrete
\nproposal,\" Kardaya said.<\/p>\n
Potential marginal gas fields are situated offshore Java,
\noffshore and onshore Sumatra and East Java, said Kardaya.<\/p>\n
\"We are yet to make a genuine inventory of the potential,\"
\nKardaya said.<\/p>\n
He said the incentive might not be similar to that given to
\nthe small oil field operators.<\/p>\n
Only recently, to reach its target of increasing crude oil
\noutput to 1.3 million barrels per day (bpd) from the less than
\none million bpd currently, the government launched an incentive
\nscheme for operators of marginal oil fields.<\/p>\n
Oil operators of such fields -- fields with a rate of return
\nof less than 15 percent and located within a producing block --
\nwill be able to recover 20 percent more of the costs incurred on
\ntop of the 100 percent already stipulated in their contracts.<\/p>\n
At least eight oil companies, including PT Medco Energi
\nInternasional, BP Plc., Caltex Pacific Indonesia and Energi Mega
\nPersada, have submitted applications to work in 30 marginal
\nfields located within their operational areas.<\/p>\n
Indonesia has a massive reserve of gas, one of the world's
\nlargest, estimated to be 188.34 trillion standard cubic feet
\n(tscf), although annually, the country only manages to produce
\nabout three tscf, some half of which is exported.<\/p>\n
The government has said that local industries as well as power
\nplants needed to rely more on gas, amid record-high oil prices
\nand surging state subsidies, and concerns over the availability
\nof the conventional fuel in the future.<\/p>\n
Elsewhere, BP Migas is studying options for an incentive for
\noperators to develop aging oil fields, also called brown fields,
\nto stem the steadily dwindling oil output.<\/p>\n
\"Brown fields are much more complicated than marginal fields,\"
\nKardaya said.<\/p>\n
\"Each area differs from the other. Most likely we will
\ncalculate the incentive based on the difference between the
\nfield's oil output, with and without the incentive,\" he added.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-eyes-incentives-from-gas-fields-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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