Purnomo okays plan to waive drilling obligation in frontier area

Minister of energy and Mineral resources Purnomo Yusgiantoro said on Wednesday that the government has agreed to BPMIGAS proposal to provide new incentive to enhance exploration in Indonesia?s frontier areas.

Purnomo said his ministry is currently drafting regulation that will enable waive exploration drilling obligation if the seismic surveys conducted failed to locate potential drilling targets.

Under the current system, contractors or concession holders who failed to perform drilling activities as stated in the PSC contracts would be heavily fined.

Purnomo, however, failed to say when the new incentive would be offered.

BPMIGAS chairman Kardaya Warnika proposed that incentive to waive drilling obligation be given to contractors that are operating in remote areas or new frontiers to lightened contractors? burden and to enhance contractors to explore Indonesia?s unexplored areas.

Indonesia is desperately seeking new oil discoveries to avoid production from falling, as more than 80 percent of current crude production come from maturing fields with declining trends. (godang)