Indonesia Offers Oil and Gas Rights

The Indonesian Government is offering new exploration rights and financial incentives to international oil companies to share in the benefits of what it says is a reserve valued around 8.6 billion barrels.

It says up to 5 trillion cubic meters of untapped natural gas lies in the eastern part of the country, where a lack of transport and communications facilities has hampered development.

It is now looking for oil and gas companies to help raise its output of proven and potential oil and gas reserves.

In a bid to make the process easier for explorers in the east, it will not be compulsory to drill when seismic studies show little prospect of finding reserves.

In other areas companies have six years for exploration and will have to drill at least one well after seismic studies. The government will also ease taxation regulations, which includes waiving of value-added taxes during exploration.

Three areas have attracted several bids: Citarum in West Java, West Kampar in Riau and Bungamas in South Sumatra. In the first round 14 more oil and gas blocks have been put on offer through regular tender. The second round, with a further 28 blocks is expected to take place in October.

Indonesia aims to raise its oil and gas output by 30% by the end of 2009.

By staff writer