Govt to provide new incentives for development of marginal oil fields

The government is preparing a package of incentives to spur oil and gas production activities in the country's marginal oil fields and aging oil wells, Neraca daily reported on Tuesday.

"A part of the incentives could be in the form of investment credit," Kardaya Warnika, the vice chairman of BP Migas, the government's agency in charge of oil and gas exploration activities, said in Jakarta on Monday.

Kardaya did not specifically unveil the other incentives for the development of marginal and aging oil wells. The government earlier said that companies operating marginal and aging oil wells would receive a large share from the production in these wells.

According to Kardaya, the introduction of the new incentives would be necessary to support the government's commitment to increase the country's crude oil production.

At present there are at least 66 marginal and 21 aging oil fields in the country which are still potential enough for further development. Besides providing incentives to such oil fields, the government also plans to provide more incentives for the development of new oil and gas fields especially those located in a frontier areas and deep sea locations.(*)