Muklis Ali, PlanetArk 25 Feb 10;
JAKARTA - Indonesia's oil production, which has slumped in recent years, could be hit by new environment laws in Southeast Asia's biggest economy, a senior official in the energy ministry said on Wednesday.
Indonesia has said it would produce 965,000 barrels per day (bpd) of crude oil and condensate this year, compared with 949,100 bpd in 2009, and 1.5 million bpd in the 1990s.
"If the environment law comes into force then many oil companies could reduce activities, and oil production will fall sharply this year," Evita Legowo, director general oil and gas, told reporters.
Legowo said that state-owned oil and gas company Pertamina could be affected by the new law.
"There are laws affecting water quality which in the oil sector can not be implemented, especially in the enhanced oil recovery projects like in Duri field," Legowo added.
Duri field in central Sumatra is operated by a unit of Chevron. Several other major global oil firms, including ConocoPhillips and France's Total, operate in Indonesia.
Environment Minister Gusti Muhammad Hatta told Reuters in October 2009 that he intended to enforce a new environment law that allows the government to cancel the operating permit of any company found to be breaching the terms of its environmental impact assessment.
"The investment in oil sector will also fall as the environment law provides for strong punishment," Legowo said.
Indonesia has struggled to attract fresh investment to develop new fields, partly due to uncertain regulations and red tape. Many of its remaining unexploited fields are in remote areas or under deep water, requiring high levels of investment and specialized technology.
Proven and potential oil reserves in Indonesia dropped to 8.3 billion barrels last year, down from 9.6 billion barrels in 2001.
(Editing by Sara Webb)
Environment law may cause 50-pct drop in oil, gas production
Antara 24 Feb 10;
Jakarta (ANTARA News) - Energy and Mineral Resources Ministry officials said Indonesia`s oil and gas production could drop by up to 50 percent if the industry had to comply with standard environmental quality requirements stipulated in a new environment protection law.
Under Law No 32/2009 on Protection and Management of the Living Environment due to come into force on April 1, 2010, oil and gas companies would have to reduce the temperature of waste water from their oil and gas production processes from 45 degrees to 40 degrees Celsius.
"The national oil production target has been set at 965,000 barrels per day but this will have to be lowered by almost 50 percent because of the requirement in the new ennvironment protection law," the energy and mineral resources ministry`s director general for oil and gas affairs, Evita Legowo, said here Wednesday.
The oil and gas contractors in the country would not be able to meet the standard environmental quality requirement in the law, she said.
The obligation to reduce the temperature of the oil and gas companies` waste water would increase their production costs and the process for them to meet the requirment would take a long time, she said.
Noting that the law also carried sanctions for failure to meet the standard quality requirement, Evita said among the oil and gas companies to be affected the most by the legal provision were PT Chevron Pacific Indonesia and PT Pertamina.
Meanwhile, Budi Indianto, the Oil and Gas Industry Regulatory Agency (BP Migas) deputy chief for operations control, said the agency was proposing to give the industry two or three years` time to comply with the mandatory standard environmental quality requirement.
He said the implementation of the environment protection law would imply an increase in the state`s cost recovery obligation toward oil and gas companies. "We must first study this implication. We cannot allow the state`s obligation to become too expensive," he said.(*)
No revision to environmentlaw: Ministry
Adianto P. Simamora, The Jakarta Post 2 Mar 10;
The Environment Ministry has insisted that it would not delay the implementation of the 2009 Environment Law as it did not believe it would hamper the mining of the country’s rich natural resources.
The ministry also asserted that it would not amend an article of the law, which has created controversy as it was initiated purely by the House of Representatives.
The statement was made in response to calls from the Energy and Mineral Resources Ministry and oil and gas business groups for a two-year delay over fears that the law’s tightened standards of emissions and waste water levels could hurt oil and gas production.
“The complaint against the new emissions and waste water standards is baseless. We have not yet discussed the draft of the government regulation to set the new standards,” Illyas Asaad, deputy for environmental compliance at the Environment Ministry told The Jakarta Post on Tuesday.
Article 100 of the 2009 Environment Law stipulates that anyone violating standards of waste water, emissions and noise levels will face a maximum of three years imprisonment and/or up to Rp 3 billion in fines.
