JAKARTA (TheInsiderStories) – Indonesian Ministry of Energy and Mineral Resources (EMR) announced state-owned energy producer, PT Pertamina, Eni Indonesia Ltd and Neptune Energy West Ganal BV as the winner of West Ganal block auction. The project has commitment value and a signature bonus of US$189.4 million.

“The consortium is able to provide a signature bonus of $30.1 million and a definite commitment of exploration worth $159.3 million. The figure is the highest, beating the Selat Panjang block offering value with a $5 million signature bonus and commitment definitely $74 million,” said EMR Deputy Minister Arcandra Tahar on Monday (08/26).

The West Ganal block off the Makassar Straits is not a new area because it has been auctioned several times. In fact, the consortium was almost declared as the winner of the block auction in the previous stage. But at that time the government canceled the determination of the managing contractor.

The value of the signature bonus this time has increased compared to the government requested which is a minimum of $15 million and with a minimum of definite work commitments.

Tahar said that in the second stage of the auction there were four oil and gas blocks being auctioned with 13 companies accessing data. But in the final decision, the government set only one block that finally had a winner. Although only one block was sold, the quality of the offer from the contractor was better than the previous offer.

Three unsold blocks such as Bone, Kutai and West Kampar, became available work areas. The government will re-evaluate the three work areas to be offered again at the next auction opportunity.

He revealed, that there were actually companies that also took an interest in other oil and gas blocks, only that they did not end up bidding because they lacked time to evaluate the three blocks. In addition, the three blocks will also be evaluated in terms of the value of the signature bonus that becomes a requirement.

“We will re-auction other blocks for which there are no winners because there are some who ask for time. We will auction in the fourth stage this year. There are many enthusiasts, there are reasons for more time and the signature bonus needs to go down,” he said.

At present, the block auction third phase is still ongoing, consisting of four blocks, namely East Gebang, Belayan I, West Tanjung I and Cendrawasih VIII. The time of accessing the bid documents is still open until 18 October 2019.

The West Ganal Working Area is estimated still have a gas content more than 600 BSCF that will contribute to Pertamina‘ oil and gas production in East Kalimantan after Mahakam Block, Sangasanga Block, and East Kalimantan – Attaka Block.

According to Pertamina’ Upstream Director, Dharmawan Samsu, the West Ganal working area will complement Pertamina’ upstream business portfolio. With this new work area, the company could synergize with other oil and gas blocks which are also managed by Pertamina’ subsidiary, particularly in East Kalimantan.

He explained, PT Pertamina Hulu Indonesia has been operating in East Kalimantan through its subsidiary PT Pertamina Hulu East Kalimantan, Pertamina Hulu Mahakam, and Pertamina Hulu Sanga-sanga.

“In this work area, together with the consortium we have a definite commitment to explore, including drilling four wells,” he concluded

Written by Lexy Nantu, Email: lexy@theinsiderstories.com