Indonesia Signs Nine PSC Deals

Indonesia has signed nine oil and gas production sharing contracts, including one located offshore Bali island with Santos, Mines and Energy Minister Purnomo Yusgiantoro said.

Indonesia is struggling to boost oil and gas reserves and to increase oil production to secure government revenue. "I believe that the investment climate in the oil and gas sector in Indonesia is still attractive... It is my honor to witness the signing of nine new contracts," Purnomo told the meeting of the Indonesian Petroleum Association. "Furthermore, allow me on this occasion to announce the opening of the offering of 10 new areas which extend from Aceh province to Papua province which will be followed by opening bid procedures," he said.

"We welcome those investors that are interested in other blocks within our territory. I hope this offering will obtain a good response from the investors," Purnomo said.

The government also signed contracts with Indonesian oil and gas firm PT Medco Energi Internasional Tbk, which was awarded an onshore block in Jambi, south Sumatra.

In addition, contracts were signed with a consortium of Korea National Oil Corp and Petrovietnam for North East Madura I offshore block in East Java province, while the offshore North East Madura II block deal was signed with a consortium of KNOC, Petrovietnam and SK Corp. Five other contracts were signed with mostly local firms.

Earlier this year Indonesia opened for tender 11 exploration areas: five off the coast of East Java province, one off north Central Java, two in north Bali, two in Jambi province on Sumatra island and one in East Kalimantan on Borneo island.

"The companies that signed the contracts plan to drill 33 wells with a total investment of around $170.2 million in six years," the mines and energy ministry said in a statement.

The ministry said the 10 areas that had been opened for tender included one offshore and onshore of Lhokseumawe block in Aceh, one of offshore and onshore of Ujung Kulon off Banten (West Java), three offshore north of East Java, two offshore of Rote in East Nusatenggara, two offshore in Moluccas province and one offshore and onshore Manokwari in Papua.

Purnomo said the government expected to sign more oil contracts next month after several companies, including ConocoPhillips and Malaysia's Genting Bhd, selected areas. The government has advertised the areas, looking for other bidders.