Indonesia to allocate special funds for oil, gas development
An Indonesian senior official said that in a bid to boost national oil and gas production, the government is drafting a bill to revise the 2001 Oil and Gas Law and set aside a portion of state revenues from the annual production of oil and gas to fund the development of the industry, local media reported on Thursday.
The allocation called “Petroleum Fund” would be used to finance capital expenditures for the construction of core infrastructure as well as for research and development, particularly in the gathering of data on oil and gas reserves to lure investors.
Deputy Energy and Mineral Resources minister Rudi Rubiandini, said that approximately five percent of non-tax state revenues from the oil and gas sector would be allocated annually to sustain the fund,
The non-tax state revenue from the energy sector reached a total of 352 trillion rupiah (about $37.3 billion) or 29.4 percent of the overall state revenues, according to the ministry’s website. Out of the 352 trillion rupiah from the energy sector, 272 trillion rupiah came from the oil and gas sector.
“If we want to make our oil and gas blocks appealing to the big fish (investors), we must ensure that we provide reliable data on potential reverses,” he said as quoted by the Jakarta Post.
In the past 10 years, Indonesia managed to sell a total of 295 oil and gas blocks, with 10 blocks sold in the first semester of 2012, said the deputy minister. He added, however, many of the investors were not big players in the industry.
Formerly a Southeast Asian member of the Organisation of Petroleum Exporting Countries (OPEC), Indonesia’s oil production has dwindled over the past couple of years. Indonesia’s oil and gas production was 2.4 million barrels of oil equivalent per day ( boepd) in 2011, declining from 2.5 million boepd in 2010. Production was 2.3 million boepd in 2009.
Rudi said the condition stemmed from the fact that until now, the state budget had never reserved funds specifically to support research.
“Approximately, we need a total of 100 million US dollars to conduct a 3-D seismic study for one assumed oil and gas block,” he said.
Presently, there was no legal mechanism to allow for a specific budget allocation for oil and gas industry development, he said, while highlighting the fact that Indonesia’s newest oil refinery was build 17 years ago.
Indonesia has not built new refineries since 1994, when former president Soeharto established state-owned oil and gas producer PT Pertamina’s refinery in Balongan, West Java. Currently, Pertamina has a total of seven refineries across the country, with a total of processing capacity of 1.15 million bpd.
http://www.globaltimes.cn/content/723429.shtml
Category: ResourceAsia
