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n a bid to ramp up its oil and gas production, Indonesia needs to boost exploration efforts in remote areas, particularly in the eastern part of the country, which is still considered relatively “virgin”, a senior official says.

Energy and Mineral Resources Ministry expert staffer Kardaya Warnika promised that the government would improve efforts to invite major oil and gas investors to pursue developments in the areas.

“We’re ready to promote eastern Indonesia as a potential oil and gas industry investment destination,” he told reporters after a ceremony inaugurating several new senior officials at the ministry in Jakarta on Friday.

Indonesia is currently in dire need of finding new oil reserves, as national production remains incapable of keeping up with growing domestic demand. The last major reserve was discovered more than a decade ago by US-based ExxonMobil at the Cepu block in Central Java.

According to official BPMigas data, Indonesia failed to reach its oil production target of 965,000 barrels per day (bpd) in 2010, producing 954,000 bpd, or 1.1 percent below target.

The government has set the production target at 970,000 bpd for 2011, which many observers view as very unlikely, especially because the production rate, as of Monday last week, was only 916,000 bpd.

The national demand for oil is estimated to stand at around 1.3 million bpd.

The Indonesian Petroleum Association (IPA) has promised that it would work hand-in-hand  with the government to promote more investment, particularly in exploration activities, through its convention and exhibition, which would be held from May 18 to 20  in Jakarta.

IPA chairman Ron Aston, who is also the general manager of Australia-based oil and gas firm Talisman, recently said that looking for investors to develop remote areas was very difficult because these types of projects would require very expensive investments.

“Eastern Indonesia has very big potential. However, to explore and exploit oil and gas reserves requires extremely expensive investments, in addition to high-risk operations,” he said.

IPA vice chairman Sammy Hamzah agreed with Aston about expensive investments required to explore Eastern Indonesia, saying that the investment costs might be 10 times more than compared to those incurred in Java or Sumatra.

Despite the multitude of challenges, Aston and Sammy were committed to helping the Indonesian government seek investors to develop these areas.

The Energy and Mineral Resources Ministry said that investments in the oil and gas sector may exceed US$16 billion this year, up 18.5 percent from $13.5 billion last year. The ministry claimed that the government was ready to offer several incentives for investors in the sector.

Investments in the oil and gas industry have shown encouraging overall growth over the past four years. Investment realization was $10.08 billion in 2007. That increased by 28.5 percent to $12.96 billion in 2008, dropped to $11.21 billion in 2009, but climbed again to $13.50 billion last year.