Government relaxes rulings on PSCs operating in frontier areas

The government has exempted production sharing contractors (PSCs) that carry out exploration drillings in deep sea and frontier areas for providing firm commitment in conducting drilling exploration in the first three years.

The policy aims at stimulating the development of oil and gas in the deep sea and frontier areas, in particular in remote areas of eastern and western Indonesia.

Under the new policy, PSCs are only required to conduct seismic survey in three years after PSC is signed. If the seismic survey finds no prospect for drilling, then the contract is ended.

Exploring oil and gas in frontier and deep sea areas, in particular in eastern Indonesia, is not easy because it requires advance technology and huge investment. Not all investors are willing to take the risk. Therefore foreign investors are needed.

At present there are 22 basins that have not been explored, mostly are located in deep sea and frontier areas. The basins are: Ketungau, Pembuang, Lombok Bali, Flores, Tukang Besi, Minahasa, Gorontalo, Sala Bangka, South Sula, West Buru, Buru, South Obi, Nort Obi, North Halmahera, East Halmahera, South Halmahera, South Seram, West Weber, Weber, Tanimbar, Waropen and Jayapura. (romel)