Govt signs nine oil, gas deals
Govt signs nine oil, gas deals
Fitri Wulandari, The Jakarta Post, Jakarta
The government signed on Tuesday oil and gas contracts with
nine production sharing contractors (PSC), while expecting to get
another eight deals next month, which would revive the sector
after being in the doldrums for the last two years.
"This shows that the oil and gas industry in the country is
still promising," Minister of Mineral Resources and Energy
Purnomo Yusgiantoro said.
The contracts were signed in conjunction with the 29th
Indonesian Petroleum Association (IPA) Conference and Exhibition.
Apart from the current contracts, the government expects to
sign another eight oil and gas contracts through a direct offer
next month, Purnomo said.
It will bring the total number of contracts to 17 this year
which was better than last year where only one oil and gas
contract was signed.
The nine contracts are mostly awarded to local companies. The
contractors won the oil and gas concessions via an open tender in
July.
They are PT Medco Energi Internasional Tbk.; PT Sele Raya;
Sebana Ltd.; a consortium of Korean National Oil Corporation
(KNOC) Nemone Ltd., Petrovietnam Investment and Development
Company and SK Corporation; a consortium of KNOC and
Petrovietnam; PT Eksindo South Madura; Santos Pty., Ltd.;
Provident Energy Indonesia LLC and Orna International Ltd.
The contracts cover a six-year exploration period, drilling a
total of 33 exploration wells. The deals have a total value of
US$170.27 million.
Purnomo said the new deals were expected to increase the
country's oil and gas production which has been steadily
declining for the past couple of years.
Last year, Indonesia auctioned off dozens of blocks, but none
attracted investors. In 1997, Indonesia signed 29 oil and gas
contracts.
The declining investment partly contributed to the declining
oil and gas output. The government revamped its procedures for
exploration and production contracts in oil and gas concessions
in a bid to lure investors and boost output.
Indonesia currently produces 1.1 million barrel per day, lower
than the quota of 1.32 million bpd set by the Organization of
Petroleum Exporting Countries (OPEC).
Natural gas production, meanwhile, declined from 2.9 trillion
standard cubic feet (tcf) per day in 2000, to 2.8 tcf in 2001.
In addition to new contracts, the government also will
officially offer 10 new oil and gas concessions.
The ten new blocks are Lhokseumawe (Nanggroe Aceh Darussalam),
onshore and offshore Ujungkulon (Banten), offshore East Java
(North East Madura III, IV, and V), offshore Rote Island, East
Nusa Tenggara (Rote I and II), Babar block (offshore Babar
Island, Maluku), Selaru (offshore Selaru Island, Maluku), and
Manokwari block (offshore and onshore Berau, Papua).
Interested bidders can obtain bidding information from
December 2003 to May 2004. Bidders must submit their offer by
June 30, 2004. Evaluation of bidding documents will take about
one-and-a-half months.