Govt provides incentives for development of marginal oil fields

The government has provided a number of incentives in order to encourage contractors to develop marginal oil and gas fields in the country.

According to the energy and mineral resources minister?s decree No, 0008/2005, the incentives will include the government?s guarantee to return 20 percent of the operating costs, if the rate of return received by a contractor was less than 15 percent.

However, the energy and mineral resources ministry said that the marginal fields which had received the government?s agreement to get incentives should be developed within a year after the agreement was made.

Under the incentive program, the contractors should report regularly the progress of their production. If the rate of return has exceeded 30 percent, the incentive will be stopped in the following year.

There are at least 52 marginal oil and gas fields in the country at present. But many contractors are mostly not interested to develop such fields because their development was often not economically viable. (kanti)