New oil exploration a must: Association

Wahyoe Boediwardhana, The Jakarta Post, Malang, East Java

At the current pace of production, and without new exploration, Indonesia's existing productive oil wells -- which account for some 25 percent of the country's estimated total reserves -- will run dry in the next 22 years, says the Indonesian Association of Geologists.

Indonesia produces about 1.1 million barrels of oil per day, mostly coming from wells located in Sumatra, Kalimantan and West Java.

It is therefore high time for the government to increase efforts to boost investment in the sector in order to find new wells, association chairman Andang Bachtiar said on Thursday.

Aside from that, a change in existing regulations would do some good as well, he added. Andang was speaking during a one-day seminar on Sedimentology and Petroleum Geology in Indonesia at the Brawijaya University here.

"The policymakers in the oil and gas sector must change their thinking about the exploration cycle. Oil and gas reserves in Indonesia are not unlimited, but they are not fully explored and that should be the basis of our regulations," Andang said.

"The paradigm should be changed. We have plenty of potential other than the existing explored oil wells."

He cited as an example the need to revise current exploration contracts with investors, by among others, stipulating that investors should open at least one new oil well within three years or risk fines. This was aimed at encouraging more fresh exploration in untapped areas.

Aside from that, Andang also pointed to the need for a transparent data policy. At present, a company is allowed to keep its exploration data for 10 years.

"If the data can be publicly accessed, then other companies could make better exploration concepts. Ideally, the data should be open to the public and universities," he said.

"But there is the price for the information."

Indonesia has been struggling to lure fresh investment into the country due mostly to the adverse investment and business climate here.

Because of ever-increasing domestic consumption, Indonesia has to import large amounts of crude oil and refined oil products to meet demand.