Govt considers incentives to boost oil production

The Ministry of Energy and Mineral Resources is considering incentives to encourage oil companies raise their crude oil production, a senior official at the ministry has said.

Kardaya Warnika, the director general for exploration and production of oil, gas and geothermal, said in Jakarta on Monday that some companies such as Beyond Petroleum (BP) and Maxus had applied to benefit the incentives.

"We are still studying the proposals," he said, adding that his office also had yet to decide what kinds of incentives that would be given to companies capable of raising their production from the current level.

He said that the incentives could be in the form of a higher percentage in oil split with the government or in the form of tax incentives. But he said the incentives might be different from one to another company depending on their oil production achievement.

The government has admitted that it would be difficult for Indonesia to meet a higher oil production quota given by the Organization of Petroleum Exporting Countries (OPEC) as most of the existing oil companies had production at their maximum levels.

OPEC decided recently to raise its production level in order to curb the hike in oil prices in the international markets. (*)