Hexindo-Indelberg signs contract to develop Lemang block

A consortium of PT Hexindo Gemilang Jaya-PT Indelberg signed a production sharing contract (PSC) with the government in Jakarta on Thursday to operate Lemang block in onshore Jambi.

Under the contract, the consortium is committed to investing a total of US$28.6 million to develop the oil and gas block and to pay a signature bonus of about US$5 million to the government.

The contract should have been signed early this week together with the signing of other 16 oil and gas contracts, according to director general of oil and gas Luluk Sumiarso.

Luluk said that the signing of the contract for the consortium was delayed because another bidder for the Lemang oil and gas block offered a high signature bonus. "The bonus signature was then increased to $5 million from just only $1 million," he added.

PT Insani Bina Perkasa which won the tender to operate Alas Jati block in onshore East Java had not signed its contract yet for a similar reason. "The government has not set the deadline for the company to sign the contract," he added. (*)