Eight investors vie for oil and gas concessions
The Jakarta Post, Jakarta
Eight oil and gas companies are vying to gain concessions for eight oil and gas blocks in the country, a senior official said on Thursday.
Director General of Oil and Gas Iin Arifin Takhyan said the companies had submitted proposals to the government to explore and develop hydrocarbon resources in the blocks, even though the government had not offered them in an open tender.
"We are now checking the blocks' coordinates and the companies' working commitment," Iin said.
Among the eight companies are U.S.-based ConocoPhilips and Malaysian Genting Oil & Gas Ltd.
The eight blocks are in Java, the Natuna Islands in the South China Sea, Central Kalimantan, Papua, Maluku, South Sumatra and East Kalimantan.
The companies will not automatically get the concessions, as the government plans to issue a competitive tender for the blocks in order to maintain transparency in the sector.
"The government will advertise the blocks in the newspapers and invite other companies to make a bid," Iin said.
If no other companies are interested in the blocks, the government would award them to the eight companies.
"If other companies voice their interest in the blocks, the winners would be those with the best working proposals," he said.
The government revamped its procedures for exploration and production contracts in oil and gas concessions in a bid to boost its declining oil and gas output.
In the past, oil and gas companies could only receive a concession through an official tender. Now, the government also accepts proposals for blocks that are not included among those offered in open tenders.
Last month, the government awarded eight blocks to foreign and local oil and gas companies through a competitive tender. The winning companies are to bring a total of US$170 million in fresh investment to the sector.
The better-than-expected tender result has raised hopes that the sector is picking up after being in a slump for several years.
Declining investment partly contributed to the declining oil and gas output.
Indonesia currently produces 1.1 million barrels of oil per day (bpd), lower than the quota of 1.317 million bpd set by the Organization of Petroleum Exporting Countries (OPEC).
The government plans to offer more oil and gas concessions next month through competitive tenders.
List of companies and blocks
Blocks offered Companies
1. Offshore Biliton, Java Sea PT Mitra Archipelago Indonesia
2. Offshore East Natuna Genting Oil & Gas, Ltd (formerly Anambas)
3. Onshore Central Kalimantan PT Kaliprada Mulia
4. Offshore Salawati, Papua Pearl Holdings Ltd
5. Onshore Asmat, Papua PT Indonesia Papua Petroleum
6. Offshore Halmahera, Maluku PT Trivisindo
7. Onshore South Sumatra ConocoPhillips
8. Offshore Bontang, East Kalimantan PT Exsindo Petroleum Tabuhan
Source: Directorate General of Oil and Gas, the Ministry of Energy and Mineral Resources