Govt to issue special regulation on deepwater blocks

The government is preparing a special regulation to attract investors to explore oil and gas potentials in Indonesian deepwater areas.

Director General of Oil and Gas IGN Wiratmaja said that experts believe Indonesian deepwater areas have significant potentials but thus far investors? interest in the areas is still small.

?We are preparing a special regulation to make our deepwater areas such attractive as those in other countries. At present, ours is less attractive,? Wiratmaja said during the 40th IPA Convention & Exhibition 2016.

He said Indonesian deepwater potentials are less attractive because their Internal Rate of Return (IRR) on investment is small compared to those in other countries, such as Mexico, while the risk is high. ?The return must be relatively high because the risk is high. (The IRR) must be over 20 percent. We are now much lower,? he said.

He said countries that have offered a relatively high IRR to investors now have seen their deepwater areas better developed compared to Indonesia.

Editing by Johannes Simbolon