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Bumi Pratiwi Hulu Energi wins Bawean block auction, pledges $22.3m investment
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The Oyong oil and gas rig in the Sampang block, located in the Madura Strait off the coast of East Java, is pictured in this undated photo. (SKK Migas/SKK Migas)
T
he Energy and Mineral Resources Ministry has announced energy company PT Bumi Pratiwi Hulu Energi as the winning bidder for the Bawean oil and gas block off the coast of East Java.
The ministry’s oil and gas director general, Tutuka Ariadji, said the company’s five-year total investment commitment was US$22.39 million, while the total signing bonus was $300,000.
“Bawean can contribute to the government’s program in increasing oil and gas production in Indonesia,” Tutuka said in a virtual briefing on Tuesday.
The firm's commitments in the five-year contract include repairing production facilities, constructing a development well and carrying out a geology, geophysics, reservoir engineering (GGRE) study.
Read also: Govt offers oil, gas areas through ‘more flexible’ production-sharing scheme
The Bawean block, which has a surface area of about 2,756 square kilometers, has an estimated 100 million barrels of oil and 680 billion cubic feet of gas (bcf).
The tender was open for bidding from July 20 to Aug. 19.
The government offered five oil and gas working areas and one exploitation working area in the auction with what it said were “more attractive” terms and conditions, as part of the country’s effort to boost investment and meet its ambitious oil and gas production targets by 2030.
The oil and gas blocks have, in total, an estimated 3.94 billion barrels of oil and 14.08 trillion cubic feet of gas, energy ministry data show.
The areas on offer were in northwest Aceh, off the coast of southwest Aceh, the Arakundo block in Aceh, the Bawean block, the Bengara 1 block in North Kalimantan and the Maratua 2 block in the Makassar Strait.
Read also: RI lacks ʻsense of urgencyʼ in oil and gas investment
Indonesia’s oil consumption is forecast to more than double to 3.97 million barrels of oil per day (bopd) by 2050, according to Upstream Oil and Gas Special Regulatory Taskforce (SKK Migas) data, while natural gas consumption is expected to more than quadruple to 26,000 million standard cubic feet per day (mmscfd) in the same time period.
The country’s oil industry hit its peak in the 1970s and 1980s, when oil production exceeded 1 million bopd and oil exports drove economic growth.
However, production has been steadily declining – mostly due to aging wells and a lack of new discoveries – and was last recorded at 616,600 bopd in June this year, according to SKK Migas data.
