15 blocks to go up for bid in Indonesia

The Indonesian government on Friday confirmed it would be pressing ahead with an oil and gas blocks bidding round this year. The offering will include both conventional and unconventional assets.

The Tongkol, East Tanimbar and Memberamo blocks will be made available through regular bids, while the Andaman I, Andaman II, South Tuna, Merak, Pekawai, West Yamdena and Kasuri III are up for grabs via direct offers.

Included in the unconventional offering are the Jambi shale gas blocks I & II, as well as the Raja, Bungamas and West Air Komering CBM assets.

In its announcement, the government stressed the flexibility of the contractual arrangements as a means to incentivise investors. According to Deputy Minister of Energy and Mineral Resources Arcandra Tahar, the authorities will listen to suggestions regarding production sharing rules, recoverable costs and even import duties.

“If you can show us in your analysis and data that the split is not good enough, let’s talk,” the official was quoted as saying by Reuters on Friday.

“In fact, we are now more open to change things that never used to be changed. We have opened everything now,” he added.

The government’s comments have received a lacklustre response from the industry.

WoodMackenzie’s director for upstream oil and gas research in the Asia Pacific region, Andew Harwood, said, “In Indonesia at the moment, the returns are difficult, the time to get a return is too long, and the risks of political involvement is quite high.”

An executive at an IOC, speaking on the condition of anonymity, noted that the country was “less economically competitive than other countries.”