Lawmaker suggests for open tender for expiring oil, gas block contracts

Lawmaker Satya W. Yudha urged the government to offer expiring oil and gas block contracts to investors through open tender mechanism, instead of renegotiating them directly with the contractors, Bisnis Indonesia reported on Thursday.

?The government currently tends to take a difficult path of direct negotiation (with the contractors). The oil and gas blocks operated by production sharing contractors whose contracts have expired should be simply taken over by the government, and then hold an open tender to determine would be operating the blocks next,? Satya said.

He also criticized the government for being overly slow in responding to request from production sharing contractors for contract extension, a factor he said has contributed to the current decline in the country?s oil production.

Satya said that the House of Representatives is considering a move to give a deadline for the government in responding to request for contract extension. He said that the government should already make a response 6-12 months after the extension request is made, to avoid the current problem of protracted process.

The paper said that several oil and gas block contracts are about to expire in the next few years. Total EP Indonesia?s contract over the Mahakam block in East Kalimantan will expire in 2017. Chevron Pacific Indonesia?s Siak block in 2013, VICO?s Sanga-Sanga block in East Kalimantan, and CNOOC?s Southeast Sumatra block in 2018, Kalrez?s Bula block in Maluku in 2019, South Jambi B block operated by ConocoPhillips in 2020, and Petronas? Muriah Block in Central Java in 2021. (*)