Govt introduces new bidding scheme to lure investors

Government is offering new bidding scheme on some of the 26 exploration blocks it offered in this year?s bidding round in the hope of increasing investors? appetite, Director General of Oil and Gas Luluk Sumiarso said.

Luluk said government would not arbitrarily set split on the blocks, but instead will leave to the bidders to propose the split. The bidders which propose best split in government?s favor, will win the blocks, he said.

The new bidding scheme is offered for five offshore blocks in West Natuna: Cakalang, Baronang, Kerapu, Cucut and Dolphin blocks, all of which had been offered in the previous bidding rounds but failed to attract bidders.

Normally production split for oil is 85:15 and 70:30 in favor of government, but contractor?s split could increase to 49 percent (in the case of oil) in frontier areas.

Government has announced the offering of the 26 exploration blocks last October, but thus far terms and conditions have not been disclosed. (godang)