Pertamina plans to sign 20 oil and gas contracts in 1999

JAKARTA (JP): State oil and gas company Pertamina expects to sign at least 20 oil and gas contracts this year, almost on par with the 22 inked last year.

Pertamina's director of exploration and production Priyambodo Mulyosudirjo said on Wednesday the country's economic and political crises were not dissuading investment in the oil and gas sector.

"Investors say the widespread unrest in various parts of the country amid the political crisis have not discouraged them from investing here since they have experienced worse situations elsewhere in the world, including in Africa," he said at an annual news conference reviewing results of oil and gas exploration in the country in the previous year and prospects for the coming year.

"We've never heard any company complaining that its exploration was obstructed by social unrest."

He added the sharp decline in oil prices was also not a discouragement since oil exploration was a long-term business and oil prices may rebound in the near future.

Priyambodo announced the company's completion of negotiations with several oil companies on contracts for the exploration and development of four oil and gas blocks. They are the Aika block offshore in Irian Jaya, Lapangan Kaya onshore block in South Sumatra, Bengara-1 block offshore in East Kalimantan and Yapen block onshore in Irian Jaya.

"The contracts are ready for signing now following the approval given by President B.J. Habibie."

He said Pertamina was in negotiations with several other oil companies on contracts for exploration and development of eight oil and gas blocks.

"We are also set to start negotiating contracts for the exploration and development of three oil and gas blocks and are in the process of tendering five oil and gas blocks," he added.

Priyambodo said Pertamina would offer 36 new oil and gas exploration contracts in 1999 for blocks situated mostly in the eastern part of the country.

Of these, 31 contracts will be based on the standard production sharing arrangement and the remainder through technical assistance.

Priyambodo said 14 of the contracts would be tendered and the 17 awarded through direct negotiations.

Blocks available through direct negotiations include the Bunguran block offshore (Natuna Islands), Masalima block offshore (Strait of Malacca), Sabaru block offshore (South Sulawesi) and Jayapura block offshore and onshore (Irian Jaya).

Among blocks on the open bidding list are Anambas in the West Natuna Sea, Tarempa (West Natuna Sea), Papalang (Strait of Malacca) and offshore Vlake block (Irian Jaya).

Blocks available under the technical assistance scheme are Betung block offshore (Jambi), Jatirarangon block onshore (West Java), Mambang Sebasa block onshore (South Sumatra), Telaga Said block onshore (North Sumatra) and Securai block onshore (North Sumatra).

Deputy chairman of Pertamina's office for foreign contractor supervision Herutjokro said most blocks offered this year were located in the eastern part of the country.

"Contractors' interest in the region has been increasing following significant oil and gas discovery in Irian Jaya." He added that most of the blocks in the eastern region were underexplored and classified as frontier projects.

Priyambodo said as of January, 1998, the country's proven and probable oil reserves were estimated at 9.68 billion barrels and its proven and probable gas reserves at about 124.7 trillion cubic feet.

Although capable of producing 1.52 million barrels of crude oil per day (bpd), the country only produces 1.28 million bpd in line with the quota set through its membership in the Organization of Petroleum Exporting Countries. (jsk)