Minister Sudjana upbeat on oil investments
Minister Sudjana upbeat on oil investments
JAKARTA (JP): The country's oil industry looks promising
despite an estimated decline in new contracts this year, Minister
of Mines and Energy I.B. Sudjana said yesterday.
"Although we see less contracts this year, foreign and local
investors are still interested in investing in oil exploration
and production," the minister said at a signing ceremony for oil
contracts.
He said the government was processing several production deals
with private companies, indicating the oil sector remained
attractive.
The minister said the government believed upstream-oil
investment prospects were still bright and new incentives to
boost investment were unnecessary.
The state oil and gas company Pertamina signed two production-
sharing contracts with PT Risjad Salim Resources Asahan of
Indonesia and Santa Fe Energy Resources of the United States.
Pertamina also signed four technical assistance contracts with
four Indonesian firms: PT Ranya Energy, PT Western Nusantara
Energy, PT Indospec Asia Petroleum Bangadua and PT Gunakarsa
Glagah-Kambuna Energy.
Sudjana said Pertamina signed nine production-sharing
contracts and six technical assistance contracts this year,
compared to 12 production-sharing contracts and eight technical
assistance contracts last year.
The country, particularly its eastern provinces, has large oil
and natural gas reserves.
The minister encouraged investors to look east. He said the
government would continue to improve business conditions for
private investors in those frontier areas.
Sudjana, who left immediately after the ceremony without
answering reporters' questions, reminded private investors that
the recent negative press reports on him were untrue.
"I hope that all of you, especially the investors, can wisely
sort out the stories. If necessary you can ask me for further
explanations on the reports," he said.
According to the reports, the minister asked PT Tambang
Batubara Bukit Asam to transfer Rp 50 billion (US$21.55 million)
in government royalties to his personal bank account.
Sudjana also revoked the authority of Kuntoro Mangkusubroto --
the ministry's director general of general mining -- following
two Canadian mining companies', Bre-X Minerals and Barrick,
battle for the Busang gold mine in East Kalimantan.
Sudjana denied these reports: "I asked the company to transfer
the funds to the ministry's bank account, not mine, to save the
state's share of coal output. And the revocation of Kuntoro's
authority had nothing to do with Busang gold mine. It's part of
our efforts to streamline the ministry," he said.
Pertamina's director of exploration and production, Priyambodo
Mulyosudirjo, said that according to the production-sharing
contracts PT Risjad Salim Resources Asahan would have a 4,200-
square-kilometer exploratory concession off the coast of Asahan,
North Sumatra, and Santa Fe would have an 8,595-square-kilometer
concession off the coast of Pagatan, South Kalimantan.
PT Risjad Salim is required to spend at least US$73.7 million
on exploration in 10 years.
Santa Fe, which signed a production-sharing contract with
Pertamina for exploration in Irian Jaya in October, is required
to spend $25.8 million in 10 years.
The companies are also required to supply the domestic market
with their oil after 60 months of production.
The technical assistance contracts were awarded by Pertamina
to four local firms to explore the Bangadua field in West Java;
Glagah-Kambuna in North Sumatra; Pamanukan, West Java; and
Tanjung Miring in South Sumatra.
Asked why there were less oil contracts this year, Priyambdo
said the oil industry fluctuated. He shared Sudjana's view that
the country, particularly its eastern provinces, was promising
for oil and gas investments.
"We don't think it necessary for the government to issue new
incentives to accelerate oil exploration," he said.
He said Pertamina was negotiating seven oil contracts, which
were expected to be signed next January. (bnt)