RI secures $10.95m in investment for three oil, gas blocks

OIL AND GAS - JAKARTA. The Energy and Mineral Resources Ministry on Monday recorded a US$10.95 million investment commitment from operators (KKP) for exploration activities and well developments in three oil and gas blocks that were auctioned last year.

The South Andaman Block in North Sumatra will be operated by MP Holding RSC. LTD, the South Sakakemang Block in South Sumatra by a consortium of Spain oil giant Repsol and Japan-based MOECO and the Maratua Block in East Kalimantan by state-owned energy giant Pertamina.

The investment commitment was part of the contract between the government and the companies to ensure the latter would conduct activities to maintain or increase the production of their respective blocks.

"With this signing, there are 40 blocks that use the gross split scheme. This proves that Indonesia’s oil and gas industry is attractive to investors," deputy minister Arcandra Tahar said after the signing ceremony.

The 40 blocks comprise 14 exploration blocks and 26 ready-to-produce blocks.

In addition to the investment commitment funds, the government also received a signature bonus of $6 million for the three blocks.

Only one block from the same auction batch does not have a contractor, namely the Anambas Block in Aceh, which will be auctioned soon.

On the same day, the government also inked an amendment to the production sharing contract (PSC) for the ready-to-produce Sebatik Block in North Kalimantan with existing contractor Star Energy Sentosa Ltd., changing the contract from a cost recovery scheme to a gross split scheme.