Government further trims down oil, gas licenses to six

The government through the Ministry of Energy and Mineral Resources has further trimmed down the number of required licenses for investment in the country?s upstream oil and gas sector to only six.

Director General of Oil and Gas at the ministry IGN Wiratmaja Puja said in a statement on Thursday that Minister of Energy and Mineral Resources Ignasius Jonan has signed the new policy and is currently in the process of legislation.

The government has previously cut down the number of licenses in the upstream oil and gas sector from 104 to 42.

Wiratmaja said that the move is part of efforts by the government to help lure fresh investment in the upstream oil and gas sector.

He said that investment in the sector has been declining over the past years not only because of the weak oil price environment but also other factors including lengthy bureaucratic procedure and permitting process. He said that such problem has discouraged investors from participating in tender for new oil and gas working areas. ?We had offered new oil and gas working areas, but failed to gain interest from deep players. Shell, for instance, did not made a bid. Chevron, Exxon also did not participate,? he said.

Wiratmaja said that as the new oil and gas working areas are located in frontier areas, they required huge investment and advanced technology as well as experienced human resources to be developed. ?This is a challenged for the oil and gas sector,? he said.

Editing by Reiner Simanjuntak