RI to boost oil production

Indonesia's state oil company Pertamina said on Thursday it planned to boost oil production through the development of marginal fields and by encouraging exploration in deep waters.

"There are many marginal fields that can boost oil production. However, the government has to give incentives for the development of those fields," Pertamina exploration director Gatot K. Wiroyudo as saying.

He said that one incentive could be to allow foreign contractors to incorporate interest expense on bank loans used for exploration as "cost recovery" in eventual production sharing contracts.

This would mean the government or Pertamina would cover such interest expenses from revenues from the field under operation.

Wiroyudo said there were about 40 potential marginal fields in Indonesia. From those marginal fields he predicted around 320,000 barrel per day could be pumped.

He said that the marginal fields had an estimated total reserve of around 10 million barrels of oil. (*)