Government prepares for first oil block tenders

Government prepares for first oil block tenders

JAKARTA (JP): The government is, for the first time in years,
preparing the tendering of 21 new oil blocks, after it took over
the task this month from state-owned oil and gas company
Pertamina, a senior government official said.

The Ministry of Energy and Mineral Resources' director general
for oil and gas, Rachmat Sudibyo, said the government was
expecting to complete the entire tender process within the first
quarter of 2001.

"The tenders will be held by a joint team with Pertamina,"
Rachmat told The Jakarta Post on Saturday.

Rachmat refused to say when his office expected to start the
tendering, and which of the 21 oil blocks it would offer first.

"Let's not get too precise with the timetable. I fear that
there might be delays, and then we will have to push back our
schedule," he explained.

He said he was still preparing the documents for the tenders,
and that his office would still worked closely with Pertamina
when holding the tender.

Asked whether tender procedures would be different under the
government, he answered, no.

"I don't think there will be much difference. Our (tender)
procedures will be more or less the same as Pertamina's."

Before, Pertamina prepared and conducted the entire tender
process, but needed the government's approval for its outcome.

Now, according to a Pertamina official who refused to be
named, foreign oil and gas investors are wary about the transfer
of the tender task.

"The government's weakness is human resources," he said.

The official said that even the joint team with the government
to prepare the tender process was formed long before the
government took over the task.

Pertamina, he said, had proposed the joint team to boost the
efficiency of the tender process, after investors complained that
it takes the government too long to approve a tender outcome.

He could not confirm whether the team could now perform its
task as efficiently as it did when it was under Pertamina.

Previous oil-block tenders were held by Pertamina, which
assumed the task in the late 1960s from the government.

However, a letter last year from the then Ministry of Mines
and Energy reversed the situation.

The government requested Pertamina to return the handling of
oil-block tenders to the directorate of oil and gas beginning in
January this year.

The letter, signed by the then minister of mines and energy
Susilo Bambang Yudhoyono, raised questions within the oil and gas
industry.

Conflicting statements between Pertamina and government
officials when clarifying the letter added to the confusion.

An official at the directorate for oil and gas has argued that
transferring the tender process was part of preparing Pertamina
for the new oil and gas law.

Under the current bill, Pertamina would become a limited
liability company, and the government would entirely control the
tender for oil blocks.

The official added that Pertamina was suppose to only
temporarily conduct the tenders.

He said that during the late 1960s, when Ibnu Sutowo held two
positions as Pertamina chief and the director general for oil and
gas, he delegated the tender process to Pertamina.

Pertamina, he said, then continued to assume the task of
tendering oil blocks long after Ibnu left office.

But officials at Pertamina maintained that by law, the
management of oil and gas resources, including their tendering,
had been delegated to the state company.

"It said so in oil and gas Law 44 1960 under article three,
and is further mentioned in Law 8 1971 on Pertamina," one of the
officials said.

However, he was unsure whether taking over Pertamina's task to
tender oil blocks was tantamount to violating the two laws.

"There seems to be different interpretations of the same
laws," he said.

For this year, the government put up for tender 21 oil blocks.

Six are located in the Arafura Sea, south of Irian Jaya,
comprising Amborip I to Amborip VI.

Six are located in the Makassar Straits, namely Taritip,
Jangeru, Tanjung, Aru, Donggala, Popodi and Papalang.

Two blocks, Nila and Anambas are located in the Natuna Sea,
southeast of China Sea.

Two are located in South Sulawesi, Polewali and Enrekang; two
in the Seram Sea, Biga and Segaf; and two blocks in Tigau and
Mentana, East Kalimantan.

One oil block, the Bangkanai block, was discovered in Central
Kalimantan.

Pertamina and foreign oil and gas companies are eying in
particular the oil blocks in the Makassar Straits. (bkm)