Indonesia needs 2 years to increase crude output to meet OPEC quota

Indonesia will need two years to raise its crude production level to meet its quota of 1.31 million barrels per day allocated by the Organization of Petroleum Exporting Countries (OPEC).

Minister of Mines and Energy Susilo Bambang Yudhoyono said that Indonesia would have to revive marginal wells to increase its output as explorations would need some more time to result in oil production.

"I think other countries would also need time to increase productions by reviving marginal wells. And of course we need to give some incentives for oil firms to revive marginal wells," he said at the Jakarta International Energy Conference (JIEC) on Tuesday.

But the minister refused to detail what incentives the government would give to oil contractors.

According to the Director General of Oil and Gas Rachmat Sudibyo, the government would not give incentive in the form of large revenue split for contractors.

"We hope we can give incentives in the form of competitive investment credit, with competitive interest rates," he said.

He said Indonesia would need one or two years to increase its production by 37,000 barrel per day to the meet the quota of 1.31 million barrels per day.

Commenting on the remaining high oil prices of over $30 per barrel, Minister Susilo Bambang said that the government had not yet taken any position on the matter.

"We are monitoring the development if this high prices will stay for 20 days of trading. If that happens, Indonesia will take a position then," he said. (*)