Indonesia to increase investor's sharing in oil, gas industry

The Indonesian government is planning to increase production sharing of oil and gas investors, and reduce or exempt taxes during their exploration period, a minister said here on Tuesday.

The policy aims at luring investment in exploration and increasing the country's oil production, which has dwindled in recent decades amid rising energy demand, Luhut Binsar Padjaitan, acting minister for energy and mineral resources disclosed.

The acting minister revealed that the sharing of output for contractor could increase by up to 40 percent from the current level of 15 percent, based on the level of difficulty and obstacles faced during the exploration activity.

Investors are expected to increase their investment in the activity to find new oil reserve in the vast archipelago country, he added.

Experts have revealed that most of Indonesia's oil and gas reserves are located in deep sea in eastern parts of the country.

Indonesian government has decided to step up exploration in the areas, which requires advanced technology and huge investments.

Indonesia has attempted to increase oil production as outputs have been dwindling since the country exited from OPEC membership in 2008.

For next year Indonesia targets to produce 780,000 barrel oil per day, higher than this year's target of 760,000 barrel per day.

Source : XINHUA