Demand for drilling services in Indonesia on the rise

Demand for drilling services in Indonesia is expected to jump by 20% in 2009 as domestic and IOCs, eyeing government incentives and rising prices for crude, seek to increase their production.

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Oct. 6 -- Demand for drilling services in Indonesia is expected to jump by 20% in 2009 as domestic and international oil companies, eyeing government incentives and rising prices for crude, seek to increase their production.

Demand for drilling services has already increased during the past year due to rising oil prices, according to Bambang Purwohadi, chairman of the Indonesian Oil & Gas Drilling Contractors Association.

"Despite the [recent] decline in the oil prices, the prices are still higher on average than in previous years," Bambang told the Jakarta Post. "This will lure oil companies to increase their production, meaning more drilling projects will be available."
Bambang said, "I think demand will increase by 20% next year," adding that plans by the government to tap marginal wells would contribute to this increase.

The energy and mineral resources ministry recently issued regulations allowing domestic oil and gas companies to exploit wells formerly managed by international oil companies.

Bambang said management of several marginal wells previously owned by state oil and gas company PT Pertamina had already been transferred to local firms.

"About 12 drilling companies will begin work on this project immediately," he said.

Contact Eric Watkins at hippalus@yahoo.com.

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