Indonesia Output at Mercy of New Laws

24 February 2010 (Last Updated February 24th, 2010 18:30)

Indonesian oil production could be hit if new environment laws come into force, according to a top energy ministry official from Indonesia. Oil and Gas Director General Evita Legowo said that if the new laws are implemented many oil companies could reduce oil exploration, leading to a

Indonesian oil production could be hit if new environment laws come into force, according to a top energy ministry official from Indonesia.

Oil and Gas Director General Evita Legowo said that if the new laws are implemented many oil companies could reduce oil exploration, leading to a slump in production this year.

"State-owned oil and gas company Pertamina could be affected by the new law... There are laws affecting water quality, which in the oil sector cannot be implemented, especially in the enhanced oil recovery projects like in the Duri field," Legowo told Reuters.

Indonesia is expected to produce 965,000bpd of crude oil and condensate this year, compared with 949,100bpd in 2009, and 1.5 million bpd in the 1990s.

Indonesia's proven and potential oil reserves dropped to 8.3 billion barrels last year, down from 9.6 billion barrels in 2001.