RI to explore energy blocks

RI to explore energy blocks

Bloomberg, Jakarta

Indonesia, Southeast Asia's biggest oil producer, said companies submitted bids to explore for oil and gas in 11 new areas as soaring crude prices encourage suppliers to seek more reserves.

The companies chose the areas, rather than bidding for blocks offered by the government, said Iin Arifin Takhyan, director general of oil and gas at the energy ministry. He said the bidders include major international oil companies, though he declined to be more specific.

"Investors interested in the oil and gas blocks have to submit bidding documents by Sept. 30," Iin said. "If after advertisement, (we receive) no new applications from other companies, we will award them to those who already applied."

Crude oil futures last month soared to a record high in New York as demand rose in China and on concern about threats to exports from Iraq and Russia. Increased oil exploration may help Indonesia find new supplies and boost falling production.

Oil companies applied to explore offshore in the Bulungan, the Nunukan, and the East Ambalat blocks off East Kalimantan, the Seruai block off Aceh, the Northwest Natuna block and the East Sepanjang block in East Java.

The five onshore areas are Sei Nangka Senipah in East Kalimantan, the Barito block in Central Kalimantan, and the Air Komering, Belida and Pandan blocks in South Sumatra province.

The applications are separate from the 10 new areas offered by the government in its normal biding round.

The Indonesian government said last month it had received 12 bids for the 10 areas. Exxon Mobil Corp., Total SA, PetroChina Co., ChevronTexaco Corp. and Malaysia's Petroliam Nasional Bhd. are among oil companies that submitted bids.

Indonesia is struggling to find reserves to replace aging fields and increase flagging production. Investment in drilling for oil and gas, which account for almost a quarter of Indonesia's exports, fell by more than half last year.

Oil and gas production has fallen by more than 6 percent a year for the past five years, according to industry regulator BPMigas. The government signed 16 new oil and gas production contracts last year.