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The country’s main oil and gas group is concerned that Indonesian companies may not be able to produce the much-needed ships for the offshore exploration of crude oil and natural gas.

The government in May last year required all maritime vessels operating in the nation’s waters to register as Indonesian-flagged vessels.

But it excluded foreign companies from having to carry Indonesian flags until 2015, so Indonesian companies could prepare for potential offshore drilling activity.

“Is the government guaranteeing that local vessel producers can provide oil and gas vessels in Indonesian flag in two to three years from now?” said Jim Taylor, chairman of Indonesian Petroleum Association (API), which represents such companies as Chevron and Total.

“It needs three years for companies that are awarded offshore oil and gas blocks to do the exploration, otherwise the permission will be terminated,” he added.

Despite the high potential oil reserves in its fields, this nine-month-old regulation could potentially hamper investment in offshore drilling.

Widjajono Partowidagdo, deputy at the Ministry of Energy and Mineral Resources, said the government needed foreign companies to conduct the required exploration for oil and gas, and that an exception to the rule on Indonesian-flagged vessels was necessary for the industry.

“Offshore drilling and survey equipment are very rare. Perhaps there are only five to six of those kinds of tools in the entire world,” Widjajono said.