Eric Watkins
Senior Correspondent
LOS ANGELES, Jan. 19 -- Indonesia will require oil and natural gas contractors to return concessions to the government if they fail to develop any resources within a 3-year period.
Indonesia's upstream oil and gas development director R. Priyono said the regulation was issued after contractors had left an increasing number of working areas idle, contributing to the decline in the country's crude oil production.
Drilling is required in the western area of the country where exploration is eased by the presence of existing infrastructure.
However, Priyono said, the ruling exempts contractors with concessions in eastern Indonesia, where the level of difficulty is higher for exploration. Nevertheless, they will be required to return their concession if they find that the area has no profitable reserves.
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