JAKARTA (TheInsiderStories) – Indonesian government through the Ministry of Energy and Mineral Resources (MEMR) decided to auction the West Kampar Block because one of the rights holders is declared bankrupt and no contractor is interested in managing it, said one official government on Wednesday (19/09).
West Kampar Block is located in Riau Province, North Sumatra Province. Its working area reaches 2908.77 kilo square meters. The West Kampar Block production sharing contract was signed in October 2005. The term of the contract is 30 years and has the potential of 500 million barrels of oil.
Initially, this block was managed by PT Sumatera Persada Energi (SPE) and should completed the contract in 2035. However, the company has been declared bankrupt. Then on Dec. 28, 2008, Oilex Ltd bought the management rights of 45 percent from PSE, which is also a group of PT Asiabumi Petroleo.
However, in December 2016, the Central Jakarta Commercial Court disposed of SPE in bankruptcy cause has not paid a bill to PT Bank CIMB Niaga Tbk (IDX: CIMB) for US$2.44 million from January to October 2016.
According to MEMR’ Director General of Oil and Gas, Djoko Siswanto, the government’s decision to auction this block was because since March 27, 2017 the area was no longer producing. In March this block production only reached 112 barrels per day.
In addition, this block is recorded to have a debt of Rp1.3 trillion (US$89.66 million). This problem makes the government through ministerial decree Number 2974/12/MEM.M/2018 dated August 15, 2018 decide to auction the West Kampar Block which is a termination block.
“Actually the potential of this block is large, but the company has a problem so that it is declared bankrupt by the court,” Siswanto said at the ministry office, Jakarta by adding the block still has a potential of 8 million barrels.
The auction of the West Kampar Block will be combined with six other blocks that expire in 2021. The auction closes from these blocks on Oct. 12. For this block, the government set signature bonus for $5 million.
By putting this block into auction, the government hopes that the block’ production will reach 1,000 barrels per day. Siswanto encouraged state-owned energy firm PT Pertamina to manage a number of blocks that had been stalled and not being used optimally.
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