Govt awards seven oil and gas contracts
JAKARTA (JP): The government awarded on Monday seven oil and gas contracts -- the first of the year -- to four international and three local companies.
The contracts, with a total investment commitment of over US$112 million for 10 years, were described by Minister of Mines and Energy Susilo Bambang Yudhoyono as a sign of investors' confidence in Indonesia.
"The signing of these contract today confirms that Indonesia is still an attractive country for oil and gas investment," Bambang said during the signing ceremony.
The seven oil companies signed three production-sharing contracts and four technical assistance contracts with state oil and gas company Pertamina.
The oil companies awarded the production-sharing contracts were Australian-based Energy Equity Pty. Ltd., which will operate Sulawesi's offshore Bone Bay; Kalrez Petroleum, also from Australia, which will operate Maluku's Bula block, and Kuwait's Kufpec Indonesia Ltd., operating on Maluku's offshore Seram block.
The recipients of the technical assistance contracts were Energy Equity for South Sumatra's Gajah Besar field; PT Indama Putera Kayapratama for South Sumatra's Kaya field, PT Binatek Reka Kruh for South Sumatra's Kruh field; PT Wahana Sad Karya and Taiwan's First Union Resources Co. Ltd. for the Jatirarangon field in West Java.
Under the existing regulation, oil companies must sign all contracts with Pertamina, which holds the monopoly right to the oil and gas sector.
Under the production-sharing contracts, oil companies are entitled to receive 15 percent of the oil and gas production, while 85 percent is transferred via Pertamina to the government.
Bambang said he expected more contracts to be signed this year, given the significant contribution of this sector to the government's revenue.
He said that oil and gas contributions accounted for some 32.8 percent of the government's total revenue during the 1999 to 2000 fiscal year.
Pertamina's director of exploration and production Gatot K. Wiroyudo said that aside from the first 10-year investment commitment of over $112 million, the seven oil companies had agreed to provide education aid totaling $205,000.
He said the investors must pay Pertamina a total of $1 million in information fees and bonuses.
The companies, he added, had also agreed to pay Pertamina a total of $405.000 in fees for its equipment and services.
Meanwhile, Kufpec said it was committed to spending $29 million in exploration activities in the next six years.
It said in a statement that it, along with its partners, it had invested some $109 million in oil and gas exploration activities in the eastern part of Indonesia up to 1999. (bkm)