Indonesia Gives New Incentive to 8 Oil Field Operators

JAKARTA Apr 26, 2005 (Dow Jones News via Comtex)

The Indonesian government Tuesday granted a new incentive to eight companies operating a total of 30 marginal oil fields in the country, as part of measures to reverse a steady decline in oil output.

"The incentive is expected to bring in an additional 50,000 barrels a day to our crude oil production," said Iin Arifin Takhyan, the director general of oil and gas at the Mines and Energy Ministry.

The new incentive allows the eight companies to claim from the government another 20% of incurred costs on top of the 100% currently allowed, Iin said.

However, the incentive is applicable only if the rate of return on the field is below 15%, he said.

The eight companies are PT Bumi Siak Pusako-Pertamina, which has three fields; PT Energi Mega Persada (ENRG.JK), which has two fields, and its subsidiary Kondur Petroleum S.A., which has five fields; PT Medco Energi Internasional (MEDC.JK), which has two fields; China's CNOOC (CEO), which has six fields; the U.K.'s Premier Oil Plc. (PMO.LN), which has one field; the U.K.'s BP PLc. (BP), which has nine fields; and PT Caltex Pacific Indonesia, which has two fields.

Indonesia, a member of the Organization of Petroleum Exporting Countries, is struggling to boost its crude oil output as most of its current fields are almost mature.

The country produced 961,200 b/d of crude oil in March, far below its current OPEC quota of 1.43 million b/d. (C) 2005 FWN Financial News. All Rights Reserved

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