Santos, ConocoPhillips bid for new oil and gas blocks
Santos, ConocoPhillips bid for new oil and gas blocks
Leony Aurora, The Jakarta Post, Jakarta
Twenty-three companies, including major global players like
Australia's Santos and U.S. companies ConocoPhillips and Anadarko
Petroleum Company, have submitted bids for 11 oil and gas blocks
currently on offer, an official says.
Ministry of Energy and Mineral Resources' Director of
Exploration and Production Novian M. Thaib said Thailand's PTT
Exploration & Production Pcl, the country's second-largest gas
producer, and Indonesia's second biggest publicly listed oil and
gas company PT Energi Mega Persada, are also bidding for the
blocks.
"We will evaluate (the bids) and announce the winners early
next month," said Novian.
The government put forth 13 blocks through direct offering --
meaning that the areas were proposed by investors -- in early
June. Three acreages attracted several bids, namely Citarum in
West Java, West Kampar in Riau and Bungamas in South Sumatra,
said Novian.
Two other blocks, the North East Madura V in East Java and
Amborip V in the Arafura Sea, failed to get any bids, despite
incentives being offered, such as a bigger share of 35 percent
for contractors proposed for the high-risk deep sea area.
Aside from the 13 blocks, the government has put on offer 14
other oil and gas blocks through regular tender in the first
round of offering. The second round, with another 28 blocks on
sale, is expected to take place in October.
To attract more investors, the government has scraped value-
added tax and import duty on all capital goods to be used during
exploration and exploitation periods.
It has also lowered its share of the oil output to between 65
percent and 80 percent from around 85 percent applied in previous
contracts, giving a bigger piece of the pie to the winning
bidders.
Indonesia is in dire need of new oil findings amid steadily
declining output due to aging fields. The country's crude oil and
condensate production currently stands at about 1.056 million
barrels per day (bpd), lower than the target of 1.125 million bpd
assumed by the government.
Rocketing global oil prices and rising domestic demand are
expected to nearly double the cost of the fuel subsidy to an
estimated Rp 138 trillion ($14 billion) from the Rp 76.5 trillion
allocated in the state budget.