ASIATODAY.ID, JAKARTA – The Indonesian Ministry of Energy and Mineral Resources has 54 potential oil and gas blocks to be auctioned to contractors during the 2024-2028 period.
Director of Upstream Oil and Gas Development at the Ministry of Energy and Mineral Resources, Ariana Soemanto, said that 27 blocks came from a joint study. Meanwhile, 57% of them are in the western Indonesian basin. The remaining 27 blocks came from regular auctions.
“The other blocks will be offered in an auction round after the joint study is completed,” said Ariana at the 48th IPA Convex panel discussion forum, ICE BSD City, Thursday, May 16 2024.
Ariana emphasized that the government will provide attractive terms & conditions (T&C) for cooperation contract contractors (KKKS) who wish to continue exploration of the blocks that have been mapped by the upstream oil and gas authority later.
“We no longer require gross split contracts as before, apart from that the split for cooperation contracts can be more than 50%,” said Ariana.
The Ministry of Energy and Mineral Resources is currently also offering a first tranche petroleum (FTP) of 10% shareable and an open bid signature bonus which is expected to help the contractor’s economy.
Furthermore, the DMO price is set at 100% ICP, there is no obligation to return part of the work area for the first 3 years, and there is no cost ceiling for cost recovery.
Previously, the Indonesian Petroleum Association (IPA) assessed that Indonesia was not competitive enough for upstream oil and gas investment compared to a number of countries in the Asian region.
President of IPA and President of Petronas Carigali Indonesia, Yuzaini Md Yusof, said that a number of countries had made fiscal improvements and made investments easier than Indonesia over the last 5 years.
“Indonesia is currently only number 4 in Asia in terms of the investment attraction index, several countries such as Bangladesh, Vietnam, Thailand and Vietnam have progressed faster,” said Yuzaini during the ’48th IPA Convex’ discussion panel, BSD Tangerang, Tuesday, May 14, 2024.
Yuzaini said that the government together with cooperation contract contractors (KKKS) must sit down together again to formulate more attractive fiscal incentives and investment facilities to increase competitiveness at the regional level.
For example, related to simplifying and trimming the process for obtaining approval for a development plan or plan of development (PoD).
According to him, the lengthy PoD approval process has resulted in stagnation in the development of a number of oil and gas fields. (ATN)
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