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Jakarta Post

Indonesia to auction 43 oil and gas blocks by March

  • Viriya P. Singgih and Stefani Ribka

    The Jakarta Post

Jakarta   /   Fri, January 19, 2018   /   06:30 pm
Indonesia to auction 43 oil and gas blocks by March Energy and Mineral Resources Ministry secretary general Ego Syahrial ( Ramdhani)

The Energy and Mineral Resources Ministry plans to offer 40 conventional and three unconventional oil and gas blocks through a tender in early March, including 32 blocks that failed to attract investors in 2015-2017 auctions.

The winners of the upcoming tender will operate all of those blocks using the new gross-split mechanism, which requires investors to pay exploration and production costs instead of relying on the government’s reimbursement as seen under the former cost-recovery scheme.

“We will offer all of those blocks in early March,” the ministry’s secretary-general Ego Syahrial told reporters on Thursday.

In December 2017, the ministry announced it had found bidders for five of 15 oil and gas blocks offered through that year’s auction.

Among the bidders are the United Arab Emirates-based Mubadala Petroleum, Spain’s Repsol Exploración SA and a consortium consisting of the United Kingdom-based Premier Oil Far East, Mubadala Petroleum and Singapore’s Kris Energy.

The ministry is optimistic that it will also find many bidders for blocks offered through the upcoming auction, especially considering the increasing crude prices.

The global benchmark Brent crude price reached last year’s peak of US$67.02 per barrel on Dec. 26 after falling to $44.82 on June 21. The price stood at $70.26 per barrel on Monday, before hovering at around $68 on Friday. (bbn)