Petroleum Fund proposed for deepwater exploration

By Godang Sitompul

The government will push for the creation of Petroleum Fund to be used among others for preliminary explorations in deepwater area in order to attract investors into high-risk areas, Vice Minister of Energy and Mineral Resources Rudi Rubiandini has said.

Rudi said the ministry, representing the government, will push for the inclusion of Petroleum Fund in the revised oil and gas law.

The ministry and the House of Representatives are scheduled to start deliberations on the amendment of the oil and gas law.

?One of the reasons that investors are reluctant to enter deepwater areas is the high risk of failure in the areas. Ideally, the Indonesian government carries out preliminary explorations in the areas using Petroleum Fund. Once we have preliminary data on the areas, investors will come in droves to explore the areas,? he said.

Rather than using state budget, the fund will be established using 5 percent of gross revenue of all PSC holders, Rudi said, adding that the ministry will communicate the proposal with the Ministry of Finance and upstream authority BPMIGAS.

Editing by Johannes Simbolon