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.