Eni, Santos seek better terms on Indonesian blocks

Eni SPA and Santos Ltd. are seeking to renegotiate their agreements with Indonesia for better incentives, according to an official with BP Migas, the country's oil and gas regulatory body.

Jun 19th, 2007

Eric Watkins
Senior Correspondent

LOS ANGELES, June 19 -- Eni SPA and Santos Ltd. are seeking to renegotiate their agreements with Indonesia for better incentives, according to an official with BP Migas, the country's oil and gas regulatory body.

Achmad Luthfi, BP Migas director for planning, said Eni had requested a better split in connection with its operations on the Krueng Mane Block in Nanggroe Aceh Darussalam, while Santos is seeking a better split together with additional incentives for its operations on the Jeruk Block in East Java.

Luthfi said the companies' requests, said to be for a split of 51:49 in favor of the government, were based on one that had been applied in Block A in Aceh, where operators, including Eni and Santos, had also encountered difficulties in developing the block. Luthfi said the two companies' requests were informal and that official requests had yet to be filed.

Last month, Eni said it found significant oil and gas deposits in its Tulip-1 exploration well drilled in 800 m of water northeast of Kalimantan Island, Indonesia (OGJ Online, May 14, 2007).

Contact Eric Watkins at hippalus@yahoo.com.

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