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Indonesia awards first oil and gas blocks in 2 years

Indonesia awards first oil and gas blocks in 2 years

FILE PHOTO: A worker prepares to label barrels of lubricant oil at the state oil company Pertamina's lubricant production facility in Cilacap, Central Java, Indonesia November 6, 2017 in this photo taken by Antara Foto. Picture taken November 6, 2017. Antara Foto/Rosa Panggabean/ via REUTERS /File Photo

JAKARTA : Indonesia has awarded oil and gas blocks to local upstream energy company Energi Mega Persada and Canada's Husky Energy Inc, a senior official said on Friday, in the country's first such tender in nearly two years.

Energi Mega Persada was awarded the South CPP block located on Sumatra island, which is estimated to recover 49.1 million barrels of oil and 87.09 billion of standard cubic feet of gas, energy ministry data showed.

Husky Energy Inc, meanwhile, was awarded Liman block on Java island, which is estimated to recover 316 bscf of gas, Tutuka Ariadji, director of oil and gas at the energy ministry, told a virtual conference.

State oil company PT Pertamina will have a 15per cent participating interest offer on the two blocks, Ariadji added.

Energi Mega Persada won the tender with a US$500,000 signature bonus, or a one-time fee for securing a license, and a three-year US$13.6 million commitment for geological, geophysical and seismic studies, and an exploration well.

Husky won the Liman working area tender with a US$200,000 signature bonus and a three-year, US$6.7 million studies commitment.

Those were the first tenders Indonesia has awarded since 2019 after delaying them due to the coronavirus pandemic.

"I hope this gives a positive signal of the promising Indonesia's upstream oil and gas investment amid current challenging global conditions," Ariadji said.

The South CCP and Liman blocks are among six worth more than 900 million barrels of oil that were up for grabs in June.

The other four, Subagsel and Merangin in Sumatra and Rangkas and North Kangean in Java have yet to be awarded.

(Reporting by Bernadette Christina Munthe; Writing by Fathin Ungku)

Source: Reuters

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