Indonesia committed to industry

 Indonesian Vice President Boediono waves to reporters prior to a press conference at his office in Jakarta, Indonesia, Friday, March 5, 2010. Indonesian President Susilo Bambang Yudhoyono on Thursday defended Boediono and Finance Minister Sri Mulyani Indrawati who are allegedly involved in a $715 million government bank bailout that parliament decided warrants criminal investigation. (AP Photo/Tatan Syuflana)

Committed: Indonesian Vice President Boediono

Indonesia's current government might only have six months more in power but it remains committed to supporting the oil and gas industry throughout that time, said Vice President Boediono.

“We will ask [upstream regulator] SKK Migas to look at all the regulations that need to be simplified,” he told delegates at the IPA convention.

Boediono admitted that there are “many problems and constraints” facing the industry and “he fears” Indonesia will not meet this year's target for either oil or gas production.

Issues needing particular attention include the slow land acquisition process and lengthy licensing procedures, according to Boediono.

Indonesia needs to provide more fiscal incentives to encourage exploration, according to Minister of Energy & Mineral Resources, Jero Wacik, who said that liquids production has been declining by between three and five per cent per annum.

Another area that needs to addressed is that of contract extensions, said Indonesia Petroleum Association president Lukman Mahfoedz.

About 30% of the republic's oil and gas output comes from contract areas that are due to expire in the next five years.

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