Novus disappointed by RI's energy policy

Australian independent oil and gas company Novus Petroleum Limited voiced disappointment over Indonesian fuel subsidy policy, saying the policy had prevented it from further developing its gas field in Wunut, East Java.

"The Indonesian government's policy of maintaining artificial energy prices through a complex system of fuel subsidies leads directly to major abuses and inefficiencies in using the country's indigenous resources," Novus's chairman RC Wiliams said in his speech during the annual general meeting in Sydney on Tuesday.

"Over two years after bringing our small Wunut gas plant on stream we are still only averaging around 8 million cubic feet gas per day which is less than 50 percent of the plant capacity and perhaps just 10 percent of the production rate that we could sustain with an upgrade to the modular plant at fairly minimal additional capital cost," Williams said in the speech made available to Petromindo.Com

The Wunut field is located in the Brantas production-sharing contract (PSC), which is equally owned by Novus and Indonesian firm Lapindo Brantas.

East Java has already necessary network to transport gas and potential market in the province was also high but the low prices for oil-based fuel as the result of government subsidies make consumers prefer oil to gas.

"We look enviously at our North American counterparts who frequently bring onshore discoveries into full commercial production within a month of so of first fining an oil or gas payzone through their exploration drill bit," Williams said. (Bodega)