Oil, gas explorers offered up to 40% of revenue

Government will offer explorers as much as 40 percent of oil and gas production revenue from areas put forward in its latest bidding round.

Explorers will get between 15 percent and 35 percent of oil output after tax, and between 30 and 40 percent of gas revenue, Luluk Sumiarso, director general of oil and gas at the ministry of energy, said in Jakarta Tuesday.

?With higher level of complexity, it?s only suitable to get a bigger split,? Sumiarso said. ?We are keen to get oil produced soon.?

Government announced on Aug. 15 that it seeks bids for 41 oil and gas areas to replace aging fields and reverse a decade-long trend of declining production.

The government plans to award exploration rights in 20 areas through regular tender and in 21 areas through the so-called direct offerings.

Winners of areas offered through regular tenders will be announced within four months after bids are submitted.

Under the direct offering system, companies identify the blocks they wish to develop and the government advertises to see if there are any rival bids.

The government will announce the winners of exploration rights for such areas in 45 days.

Tender winners will have to pay a bonus of between $1 million and $5 million to the government upon signing the contracts.(*)