27 oil exploration areas on offer this year

JAKARTA (JP): State oil and gas company Pertamina is offering 27 areas for oil and gas exploration this year, including 15 in eastern Indonesia, the company's director for exploration and production, Prijambodo Muljosudirdjo, said yesterday.

He said 23 of the areas were being offered under the production sharing contract (PSC) and four under the technical assistance contract (TAC).

"Eighteen of the areas are subject to direct negotiations with Pertamina and the other nine will be awarded through competitive bidding," Prijambodo said.

He said he was optimistic oil exploration activities would increase this year.

"Last year, oil contractors spent only US$586.7 million on exploration. This year they are committed to spending more than $1 billion," he said.

He said total spending by foreign oil contractors on exploration, production development and administration would reach $5.34 billion this year, up from $4.21 billion last year.

He said exploring for oil in eastern Indonesia was more expensive than in western areas because of inadequate infrastructure and the remoteness of exploration areas.

"But I think the incentives we are offering are attractive enough to the contractors," he said.

Pertamina was offering case-by-case incentives to oil contractors in remote areas, he said.

In addition Pertamina was offering a production sharing scheme of 65:35 in frontier areas compared to the normal 85:15 split in other areas. The splits are in Pertamina's favor.

He said 16 wells were drilled last year in eastern Indonesia compared to five wells in 1995.

In the western parts, 84 wells were drilled last year compared to 70 in 1995.

Prijambodo said he expected between 10 to 15 oil contracts would be signed this year, as against 15 contracts consisting of nine PSCs and six TACs last year.

Last year's 15 contracts were awarded to Asamera in South Sumatra, Canadian Oxy in Maluku, Caltex Pacific Indonesia in North Sumatra, Eurafrep Resources in East Java, Garis Asta Tunggal in East Kalimantan, Gunakarsa in North Sumatra, Indospec in West Java, Opic in Aceh, Pilona in South Sumatra, Premier in East Java, Ranya Energy in West Java, Risyad Salim Resources in North Sumatra, Santa Fe in Irian Jaya and East Kalimantan, and Western Nusantara in South Sumatra.

Prijambodo said Pertamina expected to sign several oil contracts soon. "We have finalized negotiations with seven oil contractors for exploratory concessions in East Java, North Sumatra, Jambi, Riau, East Kalimantan and Southeast Timor," he said.

Pertamina is also negotiating eight contracts with oil companies and will soon start negotiating another eight, he said.

"We will continue encouraging explorations to increase proven oil reserves in order to sustain oil production," Prijambodo said.

Indonesia produced 1.57 million barrels of crude oil and condensate a day last year, compared with 1.59 million barrels in 1995. (bnt)