Indonesia Plans to Offer More Oil, Gas Blocks for Bidding This Year

Indonesia's Ministry of Energy and Mineral Resources (MEMR) will offer more oil and gas blocks in a new bidding round this year as the country seeks to increase production despite weaker investment interest due to a decline in oil prices, according to a report published in a local daily Saturday.

“We are in the preparation stage and will start the new bidding round soon,” MEMR’s Director General for Oil and Gas IGN Wiratmaja Puja said, as quoted by The Jakarta Post.

Potential bidders have a total of 10 conventional oil and gas blocks and two unconventional shale blocks, located across Indonesia, for selection.

Conventional oil and gas blocks available for regular open bidding are West Asri (offshore Lampung); Oti (offshore East Kalimantan); Manakarra Mamuju (offshore West Sulawesi) and Kasuri II (onshore Papua), while the two unconventional shale blocks offered under the same auction method are MNK Batu Ampar (East Kalimantan) and MNK Blora (Central Java).

Four conventional blocks offered by the government through direct negotiations are Rupat Labuhan (offshore Riau); West Berau (offshore West Papua); North Jabung (onshore Riau and Jambi) and Southwest Bengara (onshore East Kalimantan).

Meanwhile, MEMR announced Friday that government has completed the sigining of 12 oil and gas blocks in Indonesia awarded in March, comprising eight conventional blocks and four unconventional blocks.

The companies developing the eight conventional blocks are:

  • Kualakurun (onshore Central Kalimantan) -- Conocophillips Kalimantan Exploration Ltd.-PC Kualakurun Ltd. (direct offer)
  • Garung (onshore Central Kalimantan) -- Mentari Garung Energy Ltd. (direct offer)
  • Pulau Moa Selatan (offshore Maluku) -- Shell Pulau Moa Pte. Ltd. (direct offer)
  • Southeast Papua (onshore Papua) -- Sepapua Energy Pte. Ltd-Kau 2 Pte. Ltd. (direct offer)
  • Abar (offshore North West Java) -- PT. Pertamina Hulu Energi Abar (direct offer)
  • Anggursi (offshore North West Java) -- PT. Pertamina Hulu Energi Anggursi (direct offer)
  • North Madura (offshore East Java) -- PC North Madura II Ltd. (regular bid)
  • Aru Trough I (offshore Aru) -- Statoil Indonesia Aru Trough I B.V. (regular bid)

Firms that secured the four unconventional blocks through direct offers are:

  • MNK Kisaran (Riau - North Sumatra) -- Pacific Oil & Gas (MNK Kisaran) Limited - Bukit Energy Resources Barumun Pte. Ltd. - NZOG MNK Kisaran Pty Limited
  • MNK Sakakemang (South Sumatra) -- Bukit Energy Resources Sakakemang Deep Pte. Ltd. - PT. Pertamina Hulu Energi MNK Sakakemang
  • MNK Selat Panjang (Riau) -- Petroselat NC Ltd.
  • MNK Palmerah (South Sumatra) -- Bukit Energy Resources Palmerah Deep Pte. Ltd. - NZOG MNK Palmerah Pty. Limited - PT. Surya Selaras Sejahtera MNK Palmerah

According to the MEMR, the combined investment commitment from the 12 blocks reached $155.8 million, while the signature bonus is $13 million. 

Energy and Mineral Resources Minister Sudirman Said described the contract signings as positive for the Indonesian oil and gas industry against a background of low oil prices. "We are in energy crisis but we continue to work,” the minister said, as quoted by The Jakarta Post.

Meanwhile, the Ministry reported the signing of the Pase Working Area Contract Extension for three years, with an investment of $10.5 million and a signature bonus of $1.5 million.

Indonesia has been trying to raise production by encouraging companies to focus on explorations in the search for new hydrocarbon reserves as the country attempts to improve its appeal as an attractive oil and gas investment destination.

There has been a decline in new oil and gas contracts signed in Indonesia in recent years. In 2012, 25 new oil and gas contracts were signed and the figure fell to 14 in 2013 before reaching a low of seven last year, the local daily reported.


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