Indonesia awards PSCs to 18 companies

Indonesia has awarded production-sharing contracts to 18 companies, including ConocoPhillips, Statoil ASA, and CNOOC Ltd. as a part of its efforts to boost the country's dwindling oil production.

Dec. 14, 2006

2 min read

Eric Watkins
Senior Correspondent

LOS ANGELES, Dec. 14 -- Indonesia has awarded production-sharing contracts to 18 companies, including ConocoPhillips, Statoil ASA, and CNOOC Ltd. as a part of its efforts to boost the country's dwindling oil production.

"We hope that with the awarding of the new oil blocks we can spur high oil production," said Luluk Sumiarso, Indonesia's director general for oil and gas. The government wants to increase oil production to 1.3 million b/d by 2009 from the current 1.04 million b/d.

In August, Indonesia invited companies to bid on 41 oil and gas blocks onshore and offshore Sumatra, Kalimantan, Sulawesi, and Java. Bids were accepted starting Aug. 28. At the time, Sumiarso said, "We will award contracts for 20 of the blocks through tenders and the other 21 on the basis of direct offers," (OGJ Online, Sept. 4, 2006).

Following the awards this week, Sumiarso said, "Of the 21 blocks put on the table, only 18 bidders met the requirements, one failed to attract an offer, while two weren't awarded because the proposal documents were inadequate."

He said the 18 winning bidders had committed themselves to drilling as many as 32 wells over the next 3 years at a total cost of about $235.78 million.

Under an incentive plan devised by the government last year, companies that have secured exploration rights in frontier areas will receive 80% of the net oil production, with the remaining 20% going to the government, while those operating in nonfrontier areas will receive 65% of net production.

Winners included ConocoPhillips and partner Statoil, which obtained rights to explore for oil and gas on the Kuma Block in western Sulawesi. Also CNOOC and its partner PT Gregori Gas Perkasa won rights for the Batanghari Block in central Sumatra.

A consortium of PT Mosesa Petroleum, PT Kencana Surya Perkasa, and PT Petross secured rights to explore on the Tonga Block in North Sumatra, while Ranhill Jambi Inc. won rights to prospect on the Batu Gajah Block in central Sumatra.

Another consortium of PT Hexindo Gemilang Jaya and PT Indelberg secured rights to explore on the Lemang Block in central Sumatra.

Contact Eric Watkins at [email protected].