Govt awards eight contracts in the oil and gas sector<\/p>\n
JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana
\nawarded yesterday seven production sharing contracts (PSC) to
\nforeign and local companies to explore for oil and gas in the
\ncountry.<\/p>\n
The minister also awarded one technical assistance contract
\n(TAC) to a local contractor to operate one of Pertamina's old oil
\nwells.<\/p>\n
Sudjana said the signing of the eight contracts took the total
\nnumber of contracts signed by the government this year to 29 -- a
\nnew record -- and showed that investors were still keen to invest
\nin the country's upstream oil sector.<\/p>\n
"This also refutes the allegation that investors have lost
\nconfidence in Indonesia's business climate," the minister said.<\/p>\n
The PSCs were awarded to the Korea Petroleum Development Corp.
\n(PEDCO) of South Korea to hunt for oil in the Wokam Block
\ncontract area off Irian Jaya; Talisman (Madura) Ltd, a subsidiary
\nof Talisman Energy Inc. of Canada to explore for oil in the
\nMadura Block off the island of Madura; Santos (Sampang) Pty. Ltd,
\na subsidiary of Australia's Santos Petroleum, to hunt condensate
\nin the Sampang Block, also off Madura.<\/p>\n
Other PSC recipients are Apex (Bengara II) Ltd which is to
\nexplore the Bengara II Block in and off the shore of East
\nKalimantan; the consortium of Nusamba Kaltim Pratama and Unocal
\nRapak Ltd which will explore the Rapak Block off East Kalimantan.<\/p>\n
The final two PSC recipients are Britain's Kondur Petroleum
\nS.A which got the Selat Malaka Block in the Straits of Malacca
\nand Union Texas Tomori Inc. of the U.S., which was awarded the
\nToili Block in and off the shore of Central Sulawesi.<\/p>\n
The TAC contract was awarded to a consortium of PT Pancacitra
\nMulti Jaya and PT Energitama Abdi Nusa to develop the Ibul
\nTenggara field in South Sumatra.<\/p>\n
Investment<\/p>\n
Pertamina exploration and production director Priyambodo
\nMulyosudirjo said the PSC contractors would have concessions over
\ntheir contract areas for 30 years, compared with the TAC
\ncontractor's concession period of 20 years.<\/p>\n
He said PSC contractors had committed to invest US$258.64
\nmillion in exploration and development over the first ten years.<\/p>\n
The contractors had to pay Pertamina $5.45 million in
\ncompensation for the information provided by Pertamina, another
\n$1.8 million for equipment and services, and $1.01 million to an
\neducation fund.<\/p>\n
The contractors also have to give Pertamina the so-called
\nproduction bonus at an amount relative to their production
\nvolume.<\/p>\n
"The bonus as well as the funds are not counted as operating
\ncosts," said Priyambodo.<\/p>\n
The contractors should also allocate a portion of their output
\nfor the country's oil refineries, he said.<\/p>\n
According to Priyambodo, the contractual terms set by
\nPertamina were acceptable to investors as indicated by the large
\nnumber of contracts signed this year.<\/p>\n
He projected at least 20 contracts would be signed next year.<\/p>\n
Sudjana said factors which boosted investment in the country's
\noil and gas sector included the increase in the world's oil and
\ngas demand, the stability of oil prices, and Indonesia's large
\noil and gas resources, and the country's large market potential.<\/p>\n
He said the country was expected to become a net oil importer
\nin the next decade, but he believed Indonesia could maintain its
\nposition as a net oil exporter for longer than predicted since
\nmuch of the eastern part of Indonesia remained unexplored. (jsk)<\/p>",
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