Pertamina seeks clarification over failure to win coveted block

State oil, gas company PT.Pertamina (Persero) is seeking clarification from the government over its failure to win the highly coveted Semai V exploration block offshore West Papua in 2008 bidding round.

Upstream Director Karen Agustiawan said Pertamina was seeking clarification over the matter to Director General of Oil and Gas at the Ministry of Energy and Mineral Resources.

Pertamina, which teamed up with Anglo-Dutch giant Royal Dutch/Shell lost to US oil, gas firm Hess Corp. in the bidding despite proposing higher investment proposal than the winner. The block was formally awarded to Hess on Thursday.

According to a source, Pertamina/Shell consortium proposed investment of round US$250 million on the block in the first three years, including drilling six exploration wells. The consortium offered $15 million of signing bonus. Hess, on the other hand, offered investment of $183 million investment on the block including US$40 million of signing bonus and drilling of three exploration wells.

The source said that apparently the tender committee selected Hess to win the block due to much higher signing bonus than Pertamina/Shell consortium.

Another source said Pertamina might bring the case to competition watchdog KPPU. Karen, however, said that Pertamina had yet considered such move. (bernard)