TotalFinaElf may cancel RI bid due to war

TotalFinaElf may cancel RI bid due to war

A'an Suryana, The Jakarta Post, Jakarta

French oil and gas giant TotalFinaElf might not proceed with
bidding for 11 oil and gas blocks being offered by the Indonesian
government because of the imminent war in Iraq, a company
official said.

"Our management is no longer enthusiastic to proceed further
with the bidding process," Ananda Idris, spokesman of
TotalFinaElf in Indonesia told The Jakarta Post on Wednesday.

"The stock values of the world's top companies have been in
the doldrums, and the worst scenario might occur if war breaks
out and lasts for a long time.

So, we will not ... (join in the bidding) in this turbulent
situation," Ananda added.

A government official said earlier that 17 local and
international companies, including TotalFinaElf and ExxonMobil,
had expressed interest in bidding for the 11 oil and gas blocks.

The 11 new contract areas are located in Jambi and South
Sumatra (two blocks), off the coast of Rembang in Central Java
(one), off the coast of East Java (five), off the coast of Bali
(two) and off the coast of Tarakan island in East Kalimantan
(one).

Final bids for the 11 concessions should be accepted by the
government in July, with contract signing in August.

The government is now offering investors better terms after
the government managed last year only to attract one investor for
14 oil and gas blocks being tendered.

Under the new proposal, the government is offering a higher
share of output to contractors.

They are now entitled to up to 25 percent of oil output and 45
percent of gas output, compared with 15 percent and 30 percent
respectively under traditional production-sharing contracts.

With the tender of the 11 blocks, the government has forecast
oil and gas investment to increase to US$6 billion this year, up
sharply from $3.42 billion last year.

Meanwhile, Deva Rachman, a spokesperson from ExxonMobil Oil
Indonesia could not confirm whether the company would proceed
with the final bidding stage.

"Whether or not we finally lodge a final bid depends on the
headquarters' assessment of the competitiveness of the 11
concessions, compared with other fields in the world," said Deva.