Ministry sees rising interest in this year?s oil, gas blocks tender

The Ministry of Energy and Mineral Resources said there has been rising interest among investors on new oil and gas working areas (WKs) offered by the government this year, Kontan reported on Saturday.

The government since May of this year has been offering to investors 15 WKs, comprising of 10 conventional WKs and five non-conventional WKs.

The paper quoted Dadan Kusdiana, Head of Communications, Public Information and Cooperation Bureau at the ministry, as saying that so far tender participants have purchased bid documents for nine WKs. He is optimistic that this year?s WKs tender will receive strong response from investors.

After failing to get interest in oil and gas block tender during the past couple of years, with last year?s offer only succeeded in getting one bid, there has been concerns that this year?s tender will suffer similar fate amid the lingering weak oil price environment, and following a new government policy to apply so-called gross split mechanism, to replace cost recovery scheme, in new oil and gas contracts, which has been criticized by some industry players as it would make investment in the upstream sector to be less attractive.

But Director General of Oil and Gas at the ministry, Ego Syahrial said that the gross split mechanism is aimed at improving investment climate in the sector.

He acknowledged that some of the WKs offered this year have yet to receive interest from investors. ?But the interest (for the 2017) offer is there. That?s why the government extends the tender period until September,? he said to the paper. (*)