Big oil firms win new exploration rights

Ika Krismantari, The Jakarta Post, Jakarta

Global oil giants, including ExxonMobil of the United States, Total E&P of France, Britain's Premier Oil and Norway's StatOil ASA, have won the right to drill in Indonesian oil and gas blocks that are believed to hold potential reserves of between 20 and 200 million barrels of oil equivalent.

A total of nine companies won exploration rights during the regular tender held in August last year.

Total and its partner, Japan's largest oil company, Inpex, won the right to explore an area of 2,004 square kilometers in Southeast Mahakam, East Kalimantan, while a consortium made up of Premier and Japan's Mitsui Exploration won the Tuna block off Natuna island. Meanwhile, Statoil, in partnership with Indonesia's state oil and gas firm, Pertamina, took the Karama block in the Makassar Strait, western Sulawesi.

Also in the Makassar Strait, a unit of Exxon, Esso Exploration International, won the right to explore the Mandar block.

Other winners include Malaysian energy company M3nergy Berhad, and Canada's Talisman Ltd., which won the exploration rights in the Ujung Kulon block, West Java, and Sageri, West Sulawesi, respectively.

Speaking to reporters Friday following the announcement of the winners in Jakarta, the Energy and Mineral Resources Ministry's director general of oil and gas, Luluk Sumiarso, said that of the 20 blocks on offer, only 12 had attracted bidders.

However, he explained that only nine blocks could be definitively awarded as the bidders for the other three failed to meet the requirements.

Luluk said that the nine winners would spend a total of $411 million on drilling and seismic surveys over the next three years, while the government would earn total signature bonuses amounting to about $31.45 million.

"We hope that the contracts will be signed in mid March at the latest," Luluk said.

Under the production-sharing contracts to be signed with the winners, the government's share of the split will range between 65 and 85 percent, depending on the location of the blocks.

On the same occasion, the ministry's director for the upstream oil and gas industry, R. Priyono, said that the government would offer another 40 oil and gas blocks in April or August, either through a regular tender or a direct offer.

He said that the blocks that had not been taken up could also be offered during the upcoming tender, including the Cucut, Cakalang and Baronang blocks in Natuna.

The government has signed a total of 104 production-sharing contracts since 2001, 18 of which were awarded last year.

Indonesia, the second-smallest member of the Organization of Petroleum Exporting Countries, is intensifying exploration to meet its target of increasing output by 30 percent to 1.3 million barrels per day by 2009.

In 2006, Indonesia's crude oil production fell to 1.01 million barrels per day from 1.06 million barrels the previous year, much less than the government's target of 1.05 million barrels per day.

No. Block Location Winner

1. Southeast Mahakam Off-shore Kalimantan Consortium of Total E&P and Inpex Corp.

2. West Air Komering Petroleum South Sumatra PT Tiara Bumi

3. Tuna Natuna Consortium of Premium Oil Ltd. and Mitsui Oil Exploration

4. Karama Offshore West Sulawesi Consortium of Pertamina and StatOIL ASA

5. Mandar Offshore West Sulawesi Esso Exploration International

6. Sageri Offshore South Sulawesi Talisman Ltd

7. Lampung 1 Offshore Lampung PT ANP Energy

8. Ujung Kulon Offshore Onshore Banten M3nergy Berhad

9. Enrekang Onshore South Sulawesi PT Sigma Energy Petrogas

Source: Energy and Mineral Resources Ministry