Indonesia treading water

The government wants higher oil production. The prospects are dim

Desperate to boost production for an energy-starved nation of 264m people but faced with a yawning capital expenditure gap, Indonesia is hoping that reluctant foreign investors will buy into 14 unexplored mainly offshore oil and gas blocks under a raft of financial incentives unveiled in April. In a belated recognition that Southeast Asia's biggest economy cannot fund its future energy needs, Indonesia will offer tax-free imports of drilling equipment and other upstream technology as well as revised "gross split" contracts that, the government argues, should help operators recover costs sooner. But foreign operators have been slow to show up at the party, citing excessive red tape, politicki