Govt to revise regulation on marginal fields

The ministry of energy and mineral resources (MEMR) is revising MEMR Regulation No. 0008/2009 on Incentive for the Development of Marginal Oil Fields in order to attract investors to develop such fields, the directorate general of oil and gas said in a statement on Friday.

Marginal field is a field located in producing block whose development is considered uneconomical using conventional Production Sharing Contract (PSC) terms.

Djoko Siswanto, Director for the Management of Upstream Activities at the directorate general, said on the sidelines of the 5th Oil and Gas Investment Forum Indonesia 2015 said that the government plans to issue a new regulation which is akin to the recently-issued regulation on non-conventional oil and gas.

?Non-conventional is similar to marginal, meaning (like non-conventional oil and gas) the marginal field is costly to develop,? he said.

The new regulation will adopt 90 percent of the content of MEMR Regulation No. 38/2015 on the Acceleration of Non-Conventional Oil and Gas Development. ?Marginal field happens to already have a regulation. We just need to revise it and copy paste the content of the recently-issued regulation on non-conventional oil and gas, which has been warmly welcome by all PSC holders and the international community,? he said.

Once the new regulation on the marginal field has been issued, fields whose development have been hampered by the project economics such as Block A PSC in Aceh and the field in Natuna operated by Santos will be economically feasible for development, he said

Editing by Johannes Simbolon