Pertamina signs four oil production sharing deals

JAKARTA (JP): State-owned oil company Pertamina awarded on Monday four contracts for the exploration and development of Indonesian oil and gas resources, the first oil mining deals signed this year.

Pertamina's president Martiono Hadiyanto said that the production sharing contracts, lasting for 30 years, were awarded to Apex (Yapen) Ltd. of Japan, PT Petromer Bengara Energi of the United States, Lasmo Krueng Mane Ltd. of Britain and Ambalat Shell BV. of the Netherlands, for a total area of 22,274 square kilometers.

The companies are committed to investing around US$96 million for exploration in the first 10 years, he said.

"These contracts will hopefully send a clear signal to the international community that Indonesia still remains attractive for investment, especially in the oil and gas sector," Minister of Mines and Energy Kuntoro Mangkusubroto said in his speech at the signing of the contracts.

Under the production sharing contracts, the government will receive 85 percent of the oil production or 75 percent of gas production.

Apex will explore oil in the Yapen offshore block, Irian Jaya, with a total investment of $18 million in exploration.

The Bengara offshore block, Irian Jaya, was awarded to Petromer with a committed investment of $22.4 million.

Lasmo, which will spend $39.1 million, was awarded the Krueng Mane offshore block in North Sumatra and Shell won the Ambalat offshore block in East Kalimantan, with a planned investment of $16.5 million.

The contractors will also pay information bonuses to Pertamina amounting to between $125,000 and $300,000 for each block within 30 days after the signing of the contracts.

Pertamina will also receive $375,000 in fees for services and equipment from the four contractors.

In 1998, the government awarded 22 oil and gas contracts, down from 29 in 1997.

Martiono said the signing of the new contracts indicated that international companies remained confident in the Indonesian oil and gas sector.

"Investors believe that the Indonesian government always honors its commitments," Kuntoro said. (02)