Speeding up land use permit in forest area will help raise oil lifting

The country?s oil lifting is expected to increase in 2014 as the Ministry of Forestry will speed up the issuance of permit for oil and gas exploration and production activities in forest area, according to head of BPMIGAS, the upstream oil and gas regulator, R. Priyono.

Priyono was quoted by Kompas daily as saying that many oil and gas fields are located in forest areas with potential reserves estimated at more than 100 million barrel, but such huge potential could not be realized as the forestry ministry has not provided the necessary permit.

If the issuance of the permit can be sped up, exploration activity can be carried out within the next 3-6 years. ?So oil and gas fields in forest area can start production by 2014 at the soonest,? Priyono said.

Oil and gas operating in forest areas will be required to provide $141.45 million worth of abandonment and site restoration funds in a number of state-owned banks. The funds will be used to finance site restoration works before the oil and gas contractors abandon and shut down their concession areas in the forest.

?Compared to other mining activities, oil and gas is relatively less destructing to the environment because the working area is not extensive and the activities are carried out under the ground,? said Priyono.

Minister of Forestry Zulkifli Hasan has recently said that he would prioritize the speeding up of licensing process for oil and gas activities in forest area to support the government?s target to raise oil lifting. He said that he would also issue regulations to support the target of higher investment in geothermal sector.

According to Law No. 41/1999 on Forestry, the Minister of Forestry holds full authority over land use in forest area. (*)