January 31, 2018 / 11:16 AM / a year ago

UPDATE 1-Indonesia picks five winners in 2017 energy tender

 (Adds details on 2018 tender)
    By Wilda Asmarini
    JAKARTA, Jan 31 (Reuters) - Indonesia's energy ministry
announced on Wednesday five winning bids in its 2017 oil and gas
block tender, including businesses owned by Premier Oil,
KrisEnergy and Perusahaan Gas Negara (PGN).
    Former OPEC member Indonesia was once self-sufficient in oil
and gas, but has been struggling for years to attract investment
and prevent output from declining further.
    Jakarta recently introduced tax breaks and a gross split
mechanism to encourage investment in the energy sector by
eliminating conflicts over project costs and
    The ministry described the 2017 tender result as a "new era"
in the country's upstream oil and gas industry, but noted that
five of the conventional oil and gas blocks did not attract any
bids in 2017 and will be re-tendered this year.
    The 2017 tender was opened in May and was extended four
times while waiting for new government regulation on the gross
split production sharing contract mechanism, the ministry said
in a statement.
    Premier Oil said in a statement on the tender outcome that
it sees "the potential for significant gas volumes which, in the
success case, would be delivered to existing gas consumers in
North Sumatra."
    Deputy Energy Minister Arcandra Tahar told reporters on
Wednesday he expects the 2018 bidding round to commence in
    Data presented by the energy ministry to parliament last
week shows plans to tender 40 conventional oil and gas blocks
and 3 unconventional oil and gas blocks this year.
    The table below shows the results of the 2017 tender.
 Work Area       Winner
                    - Direct offers* -
 Andaman I       Mubadala Petroleum (SE Asia) Ltd
 Andaman II      Consortium: Premier Oil Far East,
                 KrisEnergy (Andaman II) BV, Mubadala
                 Petroleum (Andaman II JSA) Ltd
 Merak-Lampung   PT Tansri Madjid Energi
 Pekawai         PT Saka Energi Sepinggan
 West Yamdena    PT Saka Energi Indonesia
 South Tuna      None
                    - Regular tender -
 Kasuri III      None
 Tongkol         None
 East Tanimbar   None
 Memberamo       None
    The table below shows oil and gas blocks expected to be
tendered in the 2018 bidding round.
  1   Rupat Labuhan
  2   South CPP
  3   Nibung
  4   Batu Gajah Dua
  5   Bukit Barat
  6   South Tuna
  7   Tongkol
  8   Banyumas
  9   Ampuh
 10   East Sepanjang-Kangean
 11   Kasongam Sampit
 12   Southwest  Bengara
 13   Suremana I
 14   Manakarra Mamuju
 15   South East Mandar
 16   Karaeng
 17   Ebuny
 18   East Tanimbar
 19   West Berau
 20   Onin
 21   Kasuri II
 22   Kasuri III
 23   West Kaimana
 24   North Arguni
 25   Mamberamo
     Terminated in 2017**
 26   Air Komering
 27   East Sokang
 28   East Muriah
 29   North Kangean
 30   Palangkaraya
 31   West Sangata
 32   Belayan
 33   Southeast Mahakam
 34   South Sageri
 35   Halmahera-Kofiau
 36   Southwest Bird's Head
 37   Semai IV
 38   West Papua III
 39   Cendrawasih Bay II
 40   Cendrawasih Bay III
  1   Shale gas Sumut Tenggara
  2   Shale gas Jembar Rimba
  3   Coal bed methane Sumbagsel
    * Direct offer tenders are preceded by a joint study
process, in which oil and gas companies and the government work
together to develop seismic data for certain blocks. Companies
involved in the study gain rights to match bids once the blocks
are offered in the tender, discouraging other participants.
    ** Conventional oil and gas blocks where contracts were
terminated in 2017.
    *** Unlike the conventional pools of oil and natural gas,
unconventional oil and natural gas do not flow naturally through
the rock, making them much more difficult to produce.

 (Reporting by Wilda Asmarini; Writing by Fergus Jensen, Editing
by Sherry Jacob-Phillips)
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