Indonesia offers 11 oil and gas concessions
The Jakarta Post, Nusa Dua, Bali
The government is offering 11 new oil and gas concession for investors this year, promising better contractual terms, enabling the investors to reap larger rewards.
"The government will consider offering a more attractive production split based on the technical and economic aspects of the oil and gas potential," Minister of Energy and Mineral Resources Purnomo Yusgiantoro said in a statement distributed during the "Dialog Forum of Oil, Energy and Mining Stakeholders" here on Saturday.
The forum, which was opened by President Megawati Soekarnoputri, was attended by dozens of top executives from oil, energy and mining companies and several ministers, including Purnomo, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti, Minister of Industry and Trade Rini Soewandi, Minister of Forestry M. Prakosa and Chairman of the Investment Coordinating Board (BKPM) Theo F. Toemion.
He did not provide details of the production split, but under existing production-sharing contracts, investors are entitled to take 15 percent of their oil output and 30 percent of their gas output. The remainder goes to the government.
Purnomo said the recipients of the 11 contracts were expected to invest a total US$160 million in exploration activities in the first three years, which would have a real multiplier effect on the national and regional economies.
The 11 new contract areas are located respectively in Jambi and South Sumatra (2 contracts), off the coast of Rembang, Central Java (1), off the coast of East Java (5), off the coast of Bali (2) and off the coast of Tarakan island, East Kalimantan (1).
The oil and gas sector has been the main source of income for the government over the past three decades.
Last year, 29 percent of the government's income came from this sector, where investors spent $5 billion to $6 billion on exploration and production activities, or about 40 percent of total investment in the country during that period.
Several companies took an opportunity at the forum to sign contracts.
Publicly-listed mining company PT Aneka Tambang (Antam) signed an investment agreement with publicly listed nickel producer PT INCO for the exploitation of nickel in East Pomalaa, Southeast Sulawesi.
Antam's president Aditya Sumanegara signed the agreement with his counterpart from INCO, E.W. Hodkin, in the presence of Megawati.
Aditya said that under the agreement, INCO would provide Antam with nickel ore supplies for the latter's ferronickel plants.
INCO is 58 percent owned by INCO Ltd of Canada, 20 percent by Japan's Sumitomo and the rest by the public.
Purnomo hailed the signing saying, "this is a good start for increasing investment in 2003."
He said he hoped Indonesia could retain its position as the world's fifth-largest nickel producer following the signing of the agreement.
Another contract signed during the forum is the one between Antam and local cooperative Inkopintra for the supply of raw materials for silver handicraftsmen in Bali worth Rp 500 million.
State-owned electricity company PT PLN also signed two power purchase agreements respectively with the investors for the building of a coal-fired power plant in Sibolga, North Sumatra, worth $238 million and a coal-fired power plant in Amurang, North Sulawesi, worth $134 million.
State-owned gas distribution and transmission firm PT PGN signed a gas sales and purchase agreement with petrochemical firm PT Chandra Asri at a contract value of $5 million per year.
PT Indonesia Power, a subsidiary of PLN, signed a contract with Australian firm Santos Pty Ltd for the 10-year sale of gas to the former's 766-megawatt open-and-combined-cycle power plant in Grati, East Java, at a contract value of $36 million per year.
Santos will supply the power plant with gas from its Oyong field off the coast of East Java.