Indonesia offers incentive to oil investors

Apr 27, 2005 02:00 AM

The Indonesian government will offer a higher cost recovery for operators willing to work on small oil fields, in a bid to boost the country's oil production by 50,000 bpd and stem the steady decline in output.
Eight oil companies had already submitted applications and had been granted the incentive to work on 30 marginal fields located within their operational areas, the Ministry of Energy and Mineral Resources' director general of oil and gas Iin Arifin Takhyan said.

The director general said that the companies would be able to claim 20 % more of incurred costs.
"Other incentives that have been granted to the companies in the past will remain applicable," he added. Iin said the marginal oil fields were expected to produce 50, 000 bpd of oil within one year to add to the country's dwindling output.

Speaking in the same event, chairman of the Oil and Gas Upstream Regulatory Agency (BP Migas), Kardaya Warnika, said that the government would open registration for companies interested ingetting the incentive for one year.
Indonesia, the biggest oil producer in Southeast Asia, is struggling to maintain its oil output, which plunged from 1.52 mm bpd in 1999 to 1.07 mm bpd last year, due to lack of exploration and aging oil fields.

Source: Xinhua
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