New regulation issued to boost oil, gas output

The Ministry of Energy and Mineral Resources has issued a regulation requiring production sharing contractors (PSC) to speed up the development of both new and old oil and gas fields in an effort to boost the country?s oil and gas production.

Under the Ministerial Regulation No. 6/2010, oil and gas contractors are obliged to inventory unproductive fields and submit the inventory to oil and gas upstream authority BPMIGAS within 14 days. They also have to submit the inventory attached with the proposal of reproduction to the ministry, through BPMIGAS, in a minimum of 30 days.

In the event the contractors are not interested to carry out reproduction at the fields, which still have potentials, they have to return the fields to the government.

Contractors are also required to submit the development plans for each of the unproductive fields within 90 days after the agency approve of their oil and gas reserves inventory. They are then asked to begin the development within 180 days after their development plans are approved. The regulation also requires the contractors to begin production within two years after their development plans are approved.

If the contractors want to cooperate with other companies in the reproduction, they should first ask approval from the ministry through BPMIGAS. (godang)