Government to give incentives for deep sea explorations

To encourage the development of deep sea explorations, the Government will give an incentive package which consists of investment credit and attractive scheme of profit sharing.

Based on the Directorate General of Oil and Gas? website on Monday, the investment credit for explorations and production of oil and gas in the depth of between 200 and 1,500 meters is 110% and 125% for depth of over 1,500 meters.

The profit sharing scheme for oil explorations and production based on the Incentive Package issued in August 1992 is 80:20 for frontier areas and 75:25 for deep sea with depth of over 1,500 meters. Meanwhile, the profit sharing scheme for gas explorations and production is 60:40 for frontier areas and 55:45 for deep sea with depth over 1,500 meters.

For the blocks located in eastern Indonesia in particular and some of the areas in the western part of Indonesia with similar conditions, where there were no adequate sub-surface data available, the government will provide a facility by implementing a contract model in which the contractors have no obligations to deliver a certain commitment in the form of exploration drilling for the first three years of the project. The contractors will only be required to perform a seismic survey, in which the contracts will be limited to a maximum of 3 years. If the contractor failed to find a prospective drilling site on the survey, then the contract would end.

National oil and gas potentials are spread in 60 sedimen basins, 22 out of which have never been explored and are located in deep seas mostly in the eastern part of Indonesia. The 22 basins are Ketungau, Pembuang, Lombok Bali, Flores, Tukang Besi, Minahasa, Gorontalo, Sala Bangka, South Sula, West Buru, Buru, South Obi, North Obi, East Halmahera, North Halmahera, South Seram, West Weber, Weber, Tanimbar, Waropen and Jayapura.

Editing by Benget Besalicto Tnb.