Govt to provide incentives for marginal and brown fields

The government will provide incentives for oil and gas contractors to develop marginal and brown fields as part of the efforts to boost the nation?s oil production, a senior official of upstream authority BP Migas said on Tuesday.

Kardaya Warnika, deputy chairman of BP Migas, said there were tens of marginal and brown fields in the country that would potentially add to the nation?s oil output but contractors were reluctant to develop them given the lack of incentives from the government.

The government has identified between 30 and 50 marginal fields that will potentially increase the nation?s oil output by 50,000 barrels per day (bpd)

Besides, there are between 20 and 30 brown field in the contract areas owned by Caltex Pacific Indonesia, Medco Energy Intenational, CNOOC and Unocal, that can produce an additional 100,000 bpd.

For contractors that are willing to develop marginal fields, the government will offer investment credit, but the government was still formulating the appropriate incentives for the development of brown fields, Kardaya said.

?The incentive package will be announced in one or two months,? he said.

Kardaya has been elected by the House of Representatives to become the new chairman of BP Migas, but the government has yet to endorse the House?s decision.

Indonesia has seen its oil output declining over the past several years due to the lack of investment in the sector. Last year, the output stood at about 960,00 bdp, well lower than OPEC?s quota for the country at approximately 1.4 million bpd. (Alex)