Govt awards eight contracts in the oil and gas sector
Govt awards eight contracts in the oil and gas sector
JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana
awarded yesterday seven production sharing contracts (PSC) to
foreign and local companies to explore for oil and gas in the
country.
The minister also awarded one technical assistance contract
(TAC) to a local contractor to operate one of Pertamina's old oil
wells.
Sudjana said the signing of the eight contracts took the total
number of contracts signed by the government this year to 29 -- a
new record -- and showed that investors were still keen to invest
in the country's upstream oil sector.
"This also refutes the allegation that investors have lost
confidence in Indonesia's business climate," the minister said.
The PSCs were awarded to the Korea Petroleum Development Corp.
(PEDCO) of South Korea to hunt for oil in the Wokam Block
contract area off Irian Jaya; Talisman (Madura) Ltd, a subsidiary
of Talisman Energy Inc. of Canada to explore for oil in the
Madura Block off the island of Madura; Santos (Sampang) Pty. Ltd,
a subsidiary of Australia's Santos Petroleum, to hunt condensate
in the Sampang Block, also off Madura.
Other PSC recipients are Apex (Bengara II) Ltd which is to
explore the Bengara II Block in and off the shore of East
Kalimantan; the consortium of Nusamba Kaltim Pratama and Unocal
Rapak Ltd which will explore the Rapak Block off East Kalimantan.
The final two PSC recipients are Britain's Kondur Petroleum
S.A which got the Selat Malaka Block in the Straits of Malacca
and Union Texas Tomori Inc. of the U.S., which was awarded the
Toili Block in and off the shore of Central Sulawesi.
The TAC contract was awarded to a consortium of PT Pancacitra
Multi Jaya and PT Energitama Abdi Nusa to develop the Ibul
Tenggara field in South Sumatra.
Investment
Pertamina exploration and production director Priyambodo
Mulyosudirjo said the PSC contractors would have concessions over
their contract areas for 30 years, compared with the TAC
contractor's concession period of 20 years.
He said PSC contractors had committed to invest US$258.64
million in exploration and development over the first ten years.
The contractors had to pay Pertamina $5.45 million in
compensation for the information provided by Pertamina, another
$1.8 million for equipment and services, and $1.01 million to an
education fund.
The contractors also have to give Pertamina the so-called
production bonus at an amount relative to their production
volume.
"The bonus as well as the funds are not counted as operating
costs," said Priyambodo.
The contractors should also allocate a portion of their output
for the country's oil refineries, he said.
According to Priyambodo, the contractual terms set by
Pertamina were acceptable to investors as indicated by the large
number of contracts signed this year.
He projected at least 20 contracts would be signed next year.
Sudjana said factors which boosted investment in the country's
oil and gas sector included the increase in the world's oil and
gas demand, the stability of oil prices, and Indonesia's large
oil and gas resources, and the country's large market potential.
He said the country was expected to become a net oil importer
in the next decade, but he believed Indonesia could maintain its
position as a net oil exporter for longer than predicted since
much of the eastern part of Indonesia remained unexplored. (jsk)