10 oil contracts awarded to foreign and local firms
JAKARTA (JP): Minister of Mines and Energy Kuntoro Mangkusubroto awarded on Monday 10 contracts to foreign and local contractors for the exploration and development of oil and gas resources in the country.
The 10 contracts comprise seven production sharing contracts (PSCs) awarded to foreign oil and gas contractors and three technical assistance contracts (TACs) to local contractors.
Kuntoro said the awarding of the contracts amid the country's economic and political crisis demonstrated that the oil and gas sector was barely affected by the financial and political crisis.
"The awarding of the contracts shows that the oil and gas sector is not significantly impacted by the turbulence in the political arena," Kuntoro said.
Analysts earlier feared that the awarding of contracts would be canceled following bloody clash between students and security forces during antigovernment demonstrations which rocked the capital during the Special Session of the People's Consultative Assembly, which ended on Friday.
The contracts were signed by Pertamina's president Soegianto and representatives of the 10 contractors.
The seven contractors awarded PSCs include American energy companies Unocal Corp, Atlantic Richfield Company (ARCO), Conoco Inc, Japan's Indonesia Petroleum Ltd (INPEX) and Ramu Nuigini Limited Liability Company.
ARCO was awarded PSC contracts on two blocks: the East Arguni block and the West Arguni block offshore and onshore Irian Jaya.
The 4,865 square kilometer East Arguni block will be operated by ARCO's subsidiary Atlantic Richfield East Arguni Inc in a joint venture with INPEX.
The 3,495 sq km West Arguni Block will be operated by a joint venture involving Atlantic Richfield West Arguni Inc and INPEX.
Unocal was awarded PSC contracts on two oil blocks: the 7,957 sq km Sangkarang offshore block in South Sulawesi and the 10,268 sq km Lompa offshore block in the Makassar Strait.
The Sangkarang block will be operated by its subsidiary Unocal Sangkarang Ltd and the Lompa block by Unocal Lompa Ltd.
Conoco, through its subsidiary Conoco Tobong Natuna BV, was awarded a PSC contract for the exploration of the 4,400 sq km Tobong block in the Natuna Sea.
INPEX was also awarded a PSC contract for the 5,725 sq km Masela offshore block in the Timor Sea.
Ramu Niugini was awarded a PSC contract for the 11,590 Rombebai offshore and onshore block in Irian Jaya.
TACs, licenses given to companies to manage Pertamina's old oil and gas fields, were awarded to PT Putra Kencana Diski Petroleum for the Diski oil field in North Sumatra; to Intermega Linda Sele Pte Ltd for the Linda A, C/G, and Sele oil fields in Irian Jaya; and to PT Insani and EBM Nusa Energi for the Selo oil field in South Sumatra.
Pertamina's exploration and production director Priyambodo Mulyosudirjo said the PSCs were for 30 years, including the period of exploration, and TACs were for 20 years.
Under the PSCs, the government, through Pertamina, will receive 85 percent of the oil production or 75 percent of gas production while the remaining output goes to contractors. With TACs, contractors will have a smaller share of the oil and gas production.
He said the contractors were committed to invest a total of US$377.3 million in the first 10 years.
The contractors will also pay Pertamina bonuses totaling $15.5 million in exchange for information provided by the state company.
They will also pay Pertamina a total $2 million fee for services and equipment provided by the company.
They also have to give Pertamina $2 million in education funds, said Priyambodo.
The new deals bring the number of oil and gas contracts awarded this year to 22.
The government awarded a record of 29 oil and gas contracts last year. (jsk)