|Subject: AN: Timor Gap not yet attractive
Date: Thu, 25 Feb 1999 21:47:43 -0500
From: "John M. Miller" <email@example.com>
INDONESIA MINISTER SAYS TIMOR GAP NOT YET ATTRACTIVE JAKARTA, Feb 26
Mines and Energy Minister Kuntoro Mangkusubroto said that Timor Gap, which is reported to have large oil and gas reserves, is not yet attractive for investors as they are not yet convinced about the magnitude of the reserves.
In addition they want larger incentives with the risk they have to face operating in the difficult area, Kuntoro said.
"Most investors still hesitate to invest in the Timor Gap. They ask for more incentives than they already have such as in tax. If we give them what they want we would get nothing," he said after a meeting with Australian Minister for Industry, Science and Natural Resources Nich Minchim in Bali Thursday.
In the meeting the two ministers discussed exploration in the Timor Gap especially in the Elang and Kakatua oilfields in Zone A, a joint operation area of the two countries.
Minchim described as encouraging the results of explorations in that area saying the two oilfields had turned out oil valued at US$ 1.1 million since exploitation began there in July 1998.
Kuntoro said that the oilfield could produce oil worth US$ 2.2 million a year.
He said the oil and gas reserves in Timor Gap were not as big as previously estimated.
"There are many failures in drilling," he said.
Drilling has been made in six places in Zone B which is within the operational area of Australia and no oil was found so far there.
Meanwhile, exploration has been stopped in other areas in Zone A as any oil and gas reserves found were considered not feasible for exploitation.
Oil has been produced only from the Kakatua and Elang areas.
Earlier the government said that Indonesia and Australia would review agreement signed in 1989 on natural resources exploitation in the Timor Gap following a major shift in the country's East Timor policy.