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.