10 oil contracts awarded to foreign and local firms
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)