Govt announces incentives for marginal fields

The government allows contractors to recover larger costs spent for the development of marginal oil fields as part of the efforts to boost the development of such fields.

Director general of oil and gas Iin Arifin Takhyan said on Tuesday that contractors would be allowed to recover 120 percent of the costs they had spent for the development of marginal fields with a rate of return (ROR) of less than 15 percent.

Once the fields? ROR tops 15 percent, the incentive will be revoked and thus the contractors can only recover 100 percent of their costs, according to Iin.

?Aside from the (above) incentive, the contractors of marginal fields can still enjoy other incentives that have been in place,? Iin said.

The government offered the new incentives for eight contractors, that is American firm Caltex Pacific Indonesia, Indonesian firm Medco E&P, Chinese firm CNOOC, Indonesian firm Kondur Petroleum, Indonesian firm Energi Mega Persada, British firm Premier, British firm BP PLC, and Indonesian firm BOB Bumi Siak Pusako-Pertamina.

They have a total of 30 marginal fields containing 76 million barrels of recoverable oil, according to Iin.

?The peak production of all the fields reach 50,000 barrels of oil per day,? Iin said.

The government has boosted efforts to increase the national oil output as reserves have dwindled. Despite being a member of the Organization of Petroleum Exporting Countries, Indonesia became a net oil importer for several months last year.

Recipients of marginal field new incentive:

No	PSC	Number of fields	Reserve (MMBO)	Peak Rate (BOPD)
1	BOB - BSP Pertamina	3	9.6	1,371
2	Kondur	5	6.6	3,654
3	Medco E&P	2	0.6	146
4	CNOOC	6	13.7	12,232
5	Energi Mega Persada	2	19.0	10,000
6	Premier	1	2.6	3,213
7	BP	9	23.2	24,500
8	CPI	2	1.0	500
?	Total	30	76.21	55,616

(Alex)