Govt awards 12 new oil and gas bloks
Govt awards 12 new oil and gas bloks
Dadan Wijaksana, The Jakarta Post/Jakarta
The government awarded on Tuesday 12 new oil and gas blocks for
exploration to local and foreign companies, including Petroliam
Nasional Bhd. (Petronas) and PT Medco Energi Internasional, in an
effort to boost the country's dwindling oil output.
Of the 12 blocks, three were awarded through a tender
mechanism and the rest were direct offerings, said Novian Thaib,
director for exploration and production at the Ministry of Energy
and Mineral Resources.
"The government expects to officially sign the exploration
contract with the companies on Dec. 4," Novian said, adding that
President Susilo Bambang Yudhoyono was scheduled to sign the
contracts along with other stakeholders.
The blocks were among a total of 21 oil and gas blocks the
government put up for offer earlier this year.
Investment in oil and gas drilling in the country fell by more
than half in 2003, as existing companies reduced exploration
activities and new companies failed to materialize. With oil
output in Indonesia sharply declining, exacerbated by aging
facilities, the government has attempted to find fresh reserves
by inviting investors to begin new explorations.
Last year, 16 new gas and oil blocks were awarded for
exploration.
As of the end of September, the country's oil production was
at 966,465 barrels a day, below the 1.2 million quota set by the
Organization of Petroleum Exporting Countries.
New exploration deals would be expected to help push
production up over the long term.
Under Law No. 22/2001 on oil and gas, contractors for oil and
gas exploration must cooperate with the country's Oil and Gas
Regulatory Implementing Body under production-sharing mechanisms.
According to Novian, the benefits of the exploration deals
were already apparent.
"The total commitment from the companies in the first three
years of exploration stands at US$163 million.
"The companies will also give a signing bonus to the
government of $17.25 million," he said.
Novian said exploration rights in the offshore Nunukan Block
in East Kalimantan had been awarded to PT Medco E&P Indonesia, a
unit of Medco Energy, the country's largest listed oil and gas
company.
Malaysia's Petronas, through its Petronas Carigali Sdn unit,
was awarded the right to explore for oil and gas in the offshore
Northeast Madura IV Block in East Java.
Anadarko Petroleum Corp. was awarded exploration rights to the
offshore northeast Madura III block in East Java, Genting Oil &
Gas Ltd. (offshore West Natuna block in Natuna Sea), Transworld
Exploration & Production Inc. (offshore Seruway block in Aceh)
and PT Waropen Perkasa (Manokwari block in Papua).
Other companies awarded exploration rights on Tuesday were PT
Tropik Energi (onshore Pandan block in South Sumatra), PT Bina
Karindo (onshore Air Komering block in South Sumatra), PT Kutai
Etam Petroleum (onshore Sei Nangka Senipah block in East
Kalimantan), PT Sele Raya (onshore Yascoagung Belida block in
South Sumatra), PT Easco East Sepanjang (offshore East Sepanjang
block in East Java) and ALTAR Sociedade de Investimento SA
Northwest (onshore Barito block in Central Kalimantan).
Novian said the government planned to open bidding for another
10 new oil and gas blocks next month, including blocks that
failed to draw interest from investors the first time they were
offered.