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pstream oil and gas watchdog SKKMigas has warned 11 oil and gas contractors that they are not doing enough in their exploration activities.

The upstream oil and gas regulatory body'€™s head, Rudi Rubiandini, said in Jakarta on Wednesday that at least 11 out of 113 oil and gas contractors in the exploration stage were labeled '€œblack'€ by the regulator after only conducting seismic studies in three years of exploration.

'€œSome of them have yet to meet their commitment in exploration activities and, of course, these contractors need to be careful because we will not think twice before giving them punishment,'€ he said in Jakarta.

The punishment, he said, included recommendations from the regulator to the Energy and Mineral Resources Ministry to terminate contracts belonging to the oil and gas companies.

So far, he added, SKKMigas had already recommended 22 oil and gas contractors to terminate their contracts ended amid years of below-par performance.

Out of 113 exploration contractors, according to SKKMigas data, only 5 of them had managed to find profitable hydrocarbon reserves after three years of exploration, and thus had earned '€œgold'€ status from SKKMigas.

These five contractors include Salamander Energy, a British-based oil and gas firm, which found hydrocarbon reserves in its working area in Bontang, Kalimantan; and local company PT Sele Raya Resources, which found reserves in the Belida working area in South Sumatra.

The rest of the contractors varied, from those that only managed to fulfill several of their exploration commitments to those that found hydrocarbon reserves but were in the technical process of determining the profitability of the blocks.

'€œAs for the 11 oil and gas contractors earning '€˜black'€™ status, we opt not to mention their names just yet as we are still pushing them to work harder,'€ said Rudi, a former deputy energy and mineral resources minister.

As previously reported by The Jakarta Post, one oil and gas contractor expected to have its contract terminated was the New York-based Hess Corporation. In total, according to Rudi, there were 22 contractors set to have their contracts terminated this year.

Earlier this year, after deeming their basins uneconomical, oil and gas contractors such as US-based ExxonMobil, Norway'€™s Statoil, US-based ConocoPhillips, US-based Marathon and the Netherlands-based Tately NV, have all decided to return their blocks in the Makassar Strait, Sulawesi.

Commenting on this, Rudi said the regulator had requested the Finance Ministry to provide an incentive package to oil and gas contractors in the exploration stage to make the investment climate much more attractive.

Last year, Southeast Asia'€™s biggest economy produced only around 860,000 barrels per day (bpd) of oil, a significant decrease from the original target of 930,000 bpd as specified in the 2012 state budget, despite having drilled 840 development wells and worked over 740 existing wells.

In the first half of this year, the country produced 832,000 bpd of oil, still below the revised target of 840,000 in the revised 2013 state budget.

The country reached its peak production level at 1.6 million bpd in 1995 but production continued to decline amid aging oil fields, which forced Indonesia to leave OPEC in 2008 after becoming a net oil importer.