BPMigas to simplify permits procedures

Ika Krismantari ,  The Jakarta Post ,  Jakarta   |  Thu, 05/15/2008 12:35 PM  |  Business

To encourage oil and gas firms to develop abandoned fields that still have reserves, the country's upstream oil and gas regulator will ease procedures for securing exploration permits.

BPMigas chairman Priyono said the move was necessary to help support the country's efforts to boost oil and gas exploration, and in particular help increase oil production, which has been on the decline over the past five years.

Priyono said in an interview Tuesday the new exploration permits would not require delineation wells or demand development plans (PODs) be submitted.

"We don't need those kinds of requirements for abandoned fields as the previous contractors will have already fulfilled them, and our main focus is to increase oil production, pronto," Priyono said.

Abandoned fields are those left idle by previous contractors for various reasons, including production inadequacy.

To become eligible for an exploration permit under the current regulation, new contractors must drill wells to ascertain the field's reserves, and then submit PODs and budget plans.

Priyono said the process handicapped the country in its bid to meet this year's oil production target of 977,000 barrels per day (bpd).

However, he said the agency would consult with the Energy and Mineral Resources Ministry before implementing the revision.

He said two companies, Sumatra Persada and Malaysian-based oil firm Genting Oil, were requesting permits to develop two fields, each estimated to be able to produce 4,000 bpd.

BPMigas data shows the country's average oil production for the first four months of the year reached 976,825 bpd, slightly below this year's target.

BPMigas said it was confident of meeting the target as 10 new oil blocks were expected to come onstream this year with a combined additional output of 9,300 bpd.

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