The Indonesian authorities have signed production sharing contracts for three new blocks, with combined commitment exploration spending of $22.7 million.
The Ministry of Energy & Mineral Resources (ESDM) has formally inked the PSCs for the East Natuna, Sangkar and Peri Mahakam working areas.
The ministry noted that domestic energy demand continues to increase in tandem with economic growth in various sectors and, as such, the government encourages oil and gas exploration and production activities.
Pertamina Hulu Energi, a subsidiary of Indonesia’s Pertamina, has been awarded the East Natuna block while Sangkar and Peri Mahakam were respectively snapped up by Saka Energi and a partnership of Eni and Pertamina Hulu Borneo.
The three PSCs also boosted the government’s coffers with combined signature bonuses of $600,000.
Pertamina Hulu’s commitment workscope for East Natuna involves geological and geophysical studies, the acquisition of 430 square kilometres of 3D seismic data and the drilling of one exploration well for a minimum spend of $12.5 million. The company also stumped up half a million dollars for its signature bonus.
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Meanwhile, Indonesia’s Saka Exploration Timur has been awarded the Sangkar block where it plans to invest a minimum of $3 million on G&G studies plus the acquisition of 150 square kilometres of 3D data. Saka’s signature bonus was $50,000.
The Sangkar block, which is located onshore and offshore Central Java and East Java provinces, has a potential resource of 130 million barrels of oil and 300 billion cubic feet of natural gas.
Italy’s Eni was the only non-Indonesian player to be awarded acreage this week, picking up the Peri Mahakam PSC in a 49:51 joint venture with Pertamina Hulu Borneo.
The duo has committed to G&G studies, the acquisition of 150 square kilometres of 3D seismic and the drilling of one wildcat for a total minimum spend of $7.2 million. The signature bonus for the Peri Mahakam block was also $50,000.
The 7414.43-square kilometre tract has potential resources of 1.3 billion barrels of oil equivalent of gas and oil, the ESDM earlier said.
“All KKKS (contractors) have completed their financial obligations, namely the payment of signature bonuses and submitted implementation guarantees in accordance with the applicable regulations before signing the cooperation contract,” director general of oil and gas, Tutuka Ariadji, said on Tuesday.
He urged the PSC contactors to play and active role in supporting Indonesia’s future domestic energy demand, adding the Jakarta government remained committed to supporting oil and gas development.
“The Indonesian government will continue to strive to support the development of upstream oil and gas activities by continuing to make improvements in the oil and gas management system so as to increase investor confidence in investing,” said Tutuka.
Indonesia this year has already signed cooperation contracts for five other blocks – Offshore North West Aceh, Offshore South West Aceh, Central Jabung, West Kampar and Paus.
The bid process is now ongoing for the three blocks offered in the 2023 first licensing round, namely Bengara I, Akia and Beluga.