Posted 04 August 2008 @ 11:10
Updated 04 August 2008 @ 12:55
JAKARTA, 04 August 2008 - Indonesia’s oil watchdog, BPMIGAS, warned on Friday that the country’s dwindling oil reserves could be exhausted in 10 years’ time if no new reserves are found. Indonesia has struggled to develop its rich energy resources, turning into a net importer of crude oil in recent years.
Southeast Asia’s biggest economy said earlier this year that it would quit the Organization of the Petroleum Exporting Countries (OPEC) because as a net oil importer it is not happy with high global crude prices. “The declining rate in production is between 8 to 10 percent per year. That means production will finish in 10 years’ time if we have not found new reserves,” Edi Purwanto, deputy chief of watchdog, BPMIGAS, told reporters.
“There are certain factors about the investment climate that make investors worry about investing in Indonesia,” he said. Foreign investors in Indonesia’s resources sector often complain about the uncertain regulatory environment and lack of respect for contracts. “There several issues, such as cost of production, nationalism issues, and a levy by regional governments” which deter investors, Purwanto added.
Purwanto said that there had been little response from investors when the government offered 26 oil blocks for exploration last October. The government has signed only four contracts so far for the blocks offered.
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