Eric Watkins
Oil Diplomacy Editor
LOS ANGELES, Nov. 3 -- ExxonMobil Corp. and Inpex Corp. are among several international oil companies that have been awarded oil and gas exploration rights in Indonesia.
ExxonMobil subsidiary Esso Exploration International Ltd. won the rights to explore the Gunting Block in East Java, committing itself to a $17 million investment in the first 3 years of the agreement.
Inpex won exploration rights in the Semai II Block off West Papua, and will conduct exploration with partners Consortia Murphy Overseas Ventures Inc. and PTT EP. The group will invest $127.5 million in the first 3 years.
The two companies are among the winners of nine oil and gas blocks announced by the Energy and Mineral Resources Ministry on Oct. 31. The new awards include:
-- The offshore Semai V oil and gas block awarded to a unit of Hess Corp.
-- The Gunting block to Esso Exploration.
-- Two blocks to Lundin Oil: The offshore oil and gas Baronang and Cakalang blocks.
-- The offshore Kerapu block to Pearl Oil Ltd.
-- The offshore Semai II block to a consortium comprised of PTT Exploration & Production PLC, Inpex Corp., and Murphy Overseas Ventures Inc.
-- The offshore Mahakam Hilir block to SPC E&P Upstream Pte. Ltd.
-- The East Bawean I block to Sintezmorneftegaz, a unit of Russia's Sintez Group.
-- The onshore Mahakam block in East Kalimantan to Singapore Petroleum.
Evita H. Legowo, the ministry's director general for oil and gas, said the Indonesian government expects to see total investment of some $465 million from the nine blocks, including signing bonuses of $69.5 million.
The announcement for these blocks was due to be made 2 weeks ago, but Evita said a delay had been caused by "tough competition" among bidders.
"We had difficulties selecting the winners," Evita said, adding: "We needed more time to contact several authorities to help in the selection process."
She said that the Semai V block in West Papua was the most contested, with six oil firms, including Total E&P Indonesia, PT Pertamina, and Hess Corp., all seeking exploration rights for it.
Hess eventually won and pledged to invest $143 million for 3 years' exploration in the block.
According to state media, Indonesia's oil and gas industry adopts a production-sharing contract, under which the government and operating firms share the output of the block.
The government's share from the projected output from these nine blocks is 65-85% for oil and 60-70% for gas.
Contact Eric Watkins at [email protected].
