One of Mahakam Block processing facilities in East Kalimantan (Photo source: SKK Migas)

Jakarta(TheInsiderStories)–Indonesia state-owned oil and gas holding firm PT Pertamina and foreign oil and gas companies signed production sharing contract (PSC) under gross split scheme for three oil and gas working areas, said government official on Thursday (31/05).

Director General for Oil and Gas at the Energy and Mineral Resource Ministry (MEMR) Djoko Siswanto said that the contracts of the three blocks, Jambi Merang, Raja/Pendopo and Seram Non Bula are expected to expired by 2019.

Two blocks are awarded to Pertamina through its subsidiaries, while one block is given to existing contractors. PSC for Jambi Merang is given to PT Pertamina Hulu Energi Jambi Merang as operator with 100 percents participating interest.

Currently, Jambi Merang block is managed by Joint Operating Bodies Pertamina-Talisman Jambi Merang and will expire on Feb. 9, 2019. While PSC for Raja/Pendopo is granted for PT Pertamina Hulu Energi Raja Tempirai as operator with 100 percent participating interest. The block is controlled by JOB Pertamina-Golden Spike Energy Indonesia Ltd. and will expire in July 5, 2019.

PSC Seram Non Bula is awarded to CITIC Seram Energy LTd as contractor as well as operator with 41 percent participating interest, Gulf Petroleum Investment  Company KSCC with 16.5 percent participating interest , Lion International Investment Ltd with 2.5 percent, and PT GHJ Seram Indonesia with 10 percent and PT Petro Indo Mandiri with 30 percent. The contract of Non Bula block will expire on Oct. 31, 2019.

All participating interests in the PSCs are subjected to a mandatory 10% offer to regional governments or enterprises.

Siswanto said the government received US$19.2 million as signature bonus from the three PSC. The contracts also entail investment commitments of $303.7 million for the first five years. He added that the fixed commitment contribution was given by Pertamina for Jambi Merang block.

“The fixed commitment is worth US$239.9 millions. This is the biggest in Indonesian history, “said Siswanto after the signing of the contracts at the MEMR office (31/05).

He continued, that the fixed commitment for Raja/Pendopo block and Seram Non Bula block worth $15.55 million and $48.892 million respectively.

The government urged the contractors to increase the production of oil and gas after the signing of the contract and meet their investment commitment by doing the exploration activities to find new oil and gas reserves.

EMR Deputy Minister Archandra Tahar urged for exploration activities to be carried out not only in the working area based on contract but also outside the working area.

“The additional exploration activities are quite big in Indonesia oil and gas industry. The current strategy is through fixed work commitment. I hope that this strategy can be accepted by all, but if there is something that need to be improved please, we are very gladly to review it,” he said.

In Jan. 31, 2018 The EMR Ministry also announced the winners of the conventional oil & gas Working Areas or block auction. This was the first auction of Working Areas to be offered based on the much-debated gross-split production sharing scheme, instead of the cost recovery-based PSC applied previously.

The winners for the 5 Working Areas:

  1. Mubadala Petroleum (SE Asia) Ltd was awarded as the winner for Andaman I Working Area. Mubadala was the only bidder for the Working Area

2. Consortium of Premier Oil Far East Ltd-KrissEnergy (Andaman II) BV-Mubadala Petroleum (Adaman II JSA) Ltd has been selected as the winner for Andaman II.Three participants were interested in the block. The other two were Repsol Exploracion SA and PT Energy Mega Persada Tbk.

3. PT Tasri Madjid Energi was awarded as the winner for Merak-Lampung Working Area. The company was the only bidder for the Working Area.

4. PT Saka Energi Sepinggan, a subsidiary of PT Saka Energi, was awarded as the winner for two Working Areas, namely Pekawai Working Area, and West Yamdena Working Area.

The EMR said the five winners are committed to invest $23.58 million to carry out exploration. The government receives $3.25 million in a signature bonus.

Tahar said the ministry plans to auction around 40 new Working Areas this year. He expects more and more participants will be interested in the next auction, as participants would have better understanding of the gross-split PSC scheme.

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