Four companies win contracts for oil and gas exploration

JAKARTA (JP): Four companies yesterday were awarded contracts from the state oil company Pertamina for oil and gas exploration and production.

One of the four companies will be allowed to operate under a production sharing contract in a new area, while the other three, under technical assistance agreements, will operate and manage Pertamina's old oil fields by using the enhanced recovery method.

The four companies were the first to sign contracts with Pertamina for hydrocarbon exploration and production.

Petrocorp Exploration Indonesia Ltd., a subsidiary of a New Zealand oil corporation, yesterday won the right to explore oil in the 980-square-kilometer Karang Besar block off the coast of East Kalimantan.

The three technical contracts went to PT Patrindo Persadamaju, PT Binawahana Petrindo Meruap and PT Babat-Kukui Energi.

Patrindo will operate Pertamina's former oil field in the 197.54-square-kilometer Wasian-Mogori block in Irian Jaya, Binawahana the 245.94-square-kilometer Meruap block in Jambi and Babat-Kukui an 8.96-square-kilometer oil field in Lapangan Babat and Kukui in South Sumatra.

Minister of Mines and Energy I.B. Sudjana said he was upbeat that more companies will soon enter the oil exploration industry.

"We hope we will be able to sign more contracts in the remaining months of this year," he said at the signing ceremony.

He said incentives introduced by the government in January are attractive enough and "I don't think the government should introduce a new measure to bolster oil exploration activities."

However, oil company executives said yesterday that the number of companies entering the country's oil exploration industry is likely to decline sharply this year despite the issuance of new incentives in January.

"The government certainly needs to issue more incentives to make oil exploration more appealing," Baihaki Hakim, the president of Caltex Petroleum Indonesia.

Baihaki said the government should at least help finance the costly seismic surveys.

Other contractors also appealed to the government to strengthen the banking industry's role in exploration.

David Salman of Patrindo said the banking industry should be encouraged to back up exploration activities so that more local investors will be involved in oil exploration.

Domestic investors are now mostly engaged in enhanced oil recovery (EOR) activities in Pertamina's old wells. (hen)