JAKARTA, Dec 29: Indonesia’s Finance Ministry announced new fiscal incentives on Saturday to boost the country’s oil production, which is likely to be below this year’s target.

Indonesia is expected to produce 899,000 barrels per day this year, below the target of 950,000 bpd in the 2007 budget.

Indonesia has been offering new exploration rights and financial incentives for oilfields in a bid to stem a steady decline in production because of its ageing wells.

The incentives announced in a bylaw on Saturday include eliminating tariffs for importing equipment used in oil, gas and geothermal production, such as drilling platforms, offshore production and undersea exploration facilities.

The bylaw, which also aims to raise domestic gas and geothermal production, will also shift the burden of paying value-added tax for importing production equipment from operators to the government.

Indonesia, Asia-Pacific’s only Opec member, has been struggling to maintain output as the country has failed to tap new oilfields fast enough.

In August, the country’s president said that oil lifting in Indonesia was expected to be 1.034 million bpd next year, up from 950,000 bpd in this year’s budget.---Reuters