BP-MIGAS warns oil output to finish in 10 years' time
Oil watchdog BPMIGAS warned that the country's dwindling oil reserves could be exhausted in 10 years' time if no new reserves are found, Reuters reported.
Indonesia has struggled to develop its rich energy resources, turning into a net importer of crude oil in recent years.
"The declining rate in production is between 8 to 10% per year. That means production will finish in 10 years' time if we have not found new reserves," Edi Purwanto, deputy chief of watchdog, BPMIGAS, said.
"There are certain factors about the investment climate that make investors worry about investing in Indonesia," he said.
Foreign investors in Indonesia's resources sector often complain about the uncertain regulatory environment and lack of respect for contracts. "There are several issues, such as cost of production, nationalism issues, and a levy by regional governments" which deter investors, Purwanto added.
Purwanto said that there had been little response from investors when the government offered 26 oil blocks for exploration last October. The government has signed only four contracts so far for the blocks offered.
"We have to improve the investment climate. Because investors may look to other countries instead of Indonesia to find oil," Purwanto said. "Indonesia's oil production will become history."
Indonesia has said it is considering a windfall tax on oil firms or an export tax as possible options to boost energy revenue in the country, steps which could also deter foreigners.
The country's crude oil production has sagged from around 1.5 million barrels per day (bpd) in the 1990s to about 860,000 bpd now; partly due to a failure to tap new fields fast enough to offset ageing reservoirs.
Indonesia has around 8.6 billion barrels of proven and potential oil reserves, but most of these reserves are located in remote or deep sea areas.
Indonesia has struggled to develop its rich energy resources, turning into a net importer of crude oil in recent years.
"The declining rate in production is between 8 to 10% per year. That means production will finish in 10 years' time if we have not found new reserves," Edi Purwanto, deputy chief of watchdog, BPMIGAS, said.
"There are certain factors about the investment climate that make investors worry about investing in Indonesia," he said.
Foreign investors in Indonesia's resources sector often complain about the uncertain regulatory environment and lack of respect for contracts. "There are several issues, such as cost of production, nationalism issues, and a levy by regional governments" which deter investors, Purwanto added.
Purwanto said that there had been little response from investors when the government offered 26 oil blocks for exploration last October. The government has signed only four contracts so far for the blocks offered.
"We have to improve the investment climate. Because investors may look to other countries instead of Indonesia to find oil," Purwanto said. "Indonesia's oil production will become history."
Indonesia has said it is considering a windfall tax on oil firms or an export tax as possible options to boost energy revenue in the country, steps which could also deter foreigners.
The country's crude oil production has sagged from around 1.5 million barrels per day (bpd) in the 1990s to about 860,000 bpd now; partly due to a failure to tap new fields fast enough to offset ageing reservoirs.
Indonesia has around 8.6 billion barrels of proven and potential oil reserves, but most of these reserves are located in remote or deep sea areas.