Indonesia Expects Increase in Exploration Spending
BP Migas, the Indonesian oil watchdog, said that exploration spending in 2003 is expected to increase to $500 million, up from $200 million in 2002. "We expect oil contractors to drill 108 exploration wells in 2003, compared to 75 wells in 2002," Zanial Achmad, planning deputy chief of BP Migas said in a statement. This spending increase is a result of the country's efforts to find new oil reserves and boost production from declining fields.
Indonesia's May crude output fell to one million barrels per day from 1.03 million bpd in April. Head of BP Migas Rachmat Sudibyo said proven Indonesian oil reserves had declined to 4.2 billion barrels from 5.2 billion in the past three years. "We expect the proven reserves to remain productive for around 10 years. Therefore, we will encourage oil contractors to find new reserves by giving them incentives for new exploration," Sudibyo said. The government is also offering tax incentives to oil companies on the 11 exploration blocks offered in the latest licensing round.