New environmental law feared to halve national oil production

Nearly half of the national oil production target this year will be lost due to changes in the new environmental law No 32/2009, which rules quality standard of the environment, a senior official says.

Evita H. Legowo, Director General of Oil and Gas at the ministry of energy and mineral resources, said on Wednesday many oil industry players could not afford to comply with the new law, which requires the production sharing contractors to lower the temperature of their liquid waste from 45 degree Celsius to 40 degree Celsius.

?In the near future many companies will be unable to comply with the new regulation so that we will miss about 40 percent of the national oil production target of 965,000 barrels per day,? Legowo said.

She said the contractors would spend much more money to lower the temperature of the liquid waste.

Legowo predicted that companies to be affected the most by the government regulation, which will take effect since April, would be the US energy giant Chevron and state oil and gas company Pertamina, respectively first and second largest producer of oil in Indonesia.

She said that another cause for concern would be Criminal charges against the oil and gas firms resulted from their violations of the law.

According to her, her ministry will study other articles of the environmental law that are considered detrimental to the oil and gas industry, and they will consult the Environmental Ministry in order to solve the environmental problem. (godang)