The ministry announced Wednesday that it would offer four oil and gas working areas in the second round of the oil and gas block action, which would be open until July 31. The oil and gas blocks on offer include a production working area and three exploration working area.

The production area on auction is the West Kampar Block located in the border area of Riau and North Sumatra. The block produced 112 barrels per day in March 2017, before operations ceased.

The government expects a signature bonus of US$5 million from the auction of the West Kampar Block and an investment commitment for exploration work of at least $64.43 million.

Meanwhile, the exploration areas to be auctioned are the offshore West Ganal Block off East Kalimantan, the offshore Kutai Block off East Kalimantan and the offshore Bone Block off South Sulawesi.

For West Ganal, the government is asking a minimum signature bonus of $29 million, while for the Kutai Block, the government requests a signature bonus of $2.5 million and for the Bone Block, the minimum signature bonus is $2.5 million.

The auction was opened just a day after the ministry announced the results of the first auction round, which was launched earlier this year. In the first tender, the government only determined winners for two of the five oil and gas blocks being offered. West Ganal and West Kampar were among the unsold blocks in first auction.

The ministry’s director general for oil and gas, Djoko Siswanto, told reporters on Wednesday that the second auction would last for three months, one month longer than the first one.

From those four blocks, the government expected to secure at least $39 million in signature bonuses and $216.27 million in investment commitments for exploration activities.

In the first auction, the West Ganal block actually attracted bids from two potential investors, namely United Kingdom-based Neptune Energy Ltd. and a consortium of state-owned energy holding company Pertamina and Italian ENI S.p.A.

However, Deputy Energy and Mineral Resources Minister Arcandra Tahar said the two bidders had failed to meet all the auction requirements. The bidders rejected Tahar’s explanation and expressed dissatisfaction with the way the auction was conducted, saying the requirements for the signature bonus had been changed minutes before the auction was closed.

The Institute for Essential Services Reform (IESR), a local energy watchdog, said the ministry’s unclear bidding requirements indicated that the government was not serious and failed to enforce transparency.

“The bidding process should have clear steps and the process should be predictable. How can you change the terms when the participants have already submitted their documents?” IESR executive director Fabby Tumiwa said.

When asked about the reason for revising the requirements for the West Ganal Block at the end of the bidding process, Djoko said it had been changed for the sake of “fairness”.

A representative of Neptune Energy declined to comment on the last-minute change in the bidding requirements.

ENI S.p.A representative Davide Casini Ropa, VP for exploration at ENI Muara Bakau B.V., said he had no problem with the new amount and the last-minute change was a common thing.

However, Ato Suyanto, Pertamina’s project manager for West Ganal said after the announcement that his team with ENI S.p.A needed to discuss the block’s economical aspect in view of the new requirements, especially the new signature bonus.

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