Indonesia May Offer Incentives as Exxon Plans Shale-Gas Survey
February 08, 2012, 7:18 PM ESTBy Yoga Rusmana
Feb. 8 (Bloomberg) -- Indonesia, seeking to develop the nation’s shale-gas reserves, said it may fund the drilling expenses of explorers including Exxon Mobil Corp. that are interested in conducting joint surveys with the government.
The companies may also be offered long-term production- sharing contracts of more than 30 years, Evita Legowo, director general at the Energy and Mineral Resources Ministry, said today in a statement on the ministry’s website. The government is drafting a regulation for shale-gas exploration to be issued later this year, she added.
Indonesia, Southeast Asia’s largest crude producer, is trying to develop alternative energy sources after declining output from aging fields turned the country into a net oil importer. Extending incentives traditional oil and gas companies receive from the government to shale-gas explorers will attract investments to tap 574 trillion standard cubic feet of potential shale-gas reserves spread over seven basins in Sumatra, Java and Borneo islands.
There are 15 companies, including Exxon, that have requested to conduct joint studies to explore shale-gas in Indonesia, the energy ministry said in a statement on its website yesterday. Oil and gas companies in Indonesia can reimburse exploration and exploitation expenses every year under a production sharing-contract with the government.
--Editors: Indranil Ghosh, Amit Prakash
To contact the reporter on this story: Yoga Rusmana in Jakarta at yrusmana@bloomberg.net
To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net; Amit Prakash at aprakash1@bloomberg.net
