JAKARTA - The Energy and Mineral Resources (ESDM) minister Jero Wacik has asked BP Migas and the Directorate General of Oil and Gas to implement better supervision on each of the new oil and gas working.
He Hopes the government will sign at least 50 additional oil and gas blocks per year and has ask the director general for oil and gas as well as ESDM deputy minister to contribute in providing assistance to oil and gas conpanies.
"I ask the director general to work harder and in addition i also ask the new deputy minister to give his contribution in order to meet our goal in signing at least 50 new working areas per year. To ensure that all administration matters are clear and concise, all official must not complicate matters," he said.
Wacik also ask that winners of the oil and gas blocks who signed the contracts yersterday to fulfill their responsibilities, including paying a signature bonus and fulfilling their coommitment of 3 years exploration.
"There must be an annual progress report on developent of every field, and we will do an assesment on what we can improve on following that report," he continues. eh
When a delay has been found during an assessment, Wacik requests the oil and gas company to be given a warning. When a company ignores the warning, the business license to manage oil and gas blocks, which previously assigned to the company, might be revoked.
Yesterday, the government signed cooperation contracts for 10 new oil and gas blocks with a total investment commitment worth US$146,41 million for the first 3 years.
The investment consist of G&G studies worth US$14.43 million, seismic 2D (re-processing) with a distance of 2.150 km worth US$23,4million, seismic 3D with a distance of 150 km worth US$6 million and also investment in the drilling of seven exploration wells worth around US$102,63 million.
"The government will receive a signature bonus worth US$13.2 million," says general director for oil and gas at ESDM Ministry Evita Herawati Legowo.
Previously, on May 25, 2012, the government announced 13 winners in the oil and gas block auctions during the closing ceremony of the 36th Annual Convention and Exhibition of the Indonesian Petroleum Association (IPA). According to Evita, the three remaining contracts are waiting for administrative clearance.
All 13 winners of the oil and gas block contracts resulted from one regular second round auction in 2011 organized between 10 October 2011 - 22 February 2012. The 12 remaining auction winners are first round winners in 2012 for the period between 28 March 2012 - 14 May 2012.
Evita says that as many as five blocks are currently being auctioned in the first round of the regular tender 2012, which has been held commencing 28 March 2012 and will end on 26 July 2012.
The five blocks are West Pelikan Block, located offshore of West Natuna Beach, the East Sokang Block, located on offshore East Natuna Beach, the South Sampang Block, located on the onshore/offshore area of East Java, the Offshore South East Mangkalihat Block, located offshore East Kalimantan and the East Aru Block, located offshore of Maluku Beach.
Revoke The License
In response to better supervision of oil and gas working areas, Evita says that BPMigas have already appropriately carried out its function. The government through Directorate General for Oil and Gas has revoked business licenses of oil and gas companies that had failed to perform.
The reasons behind the removal, among others, are for those companies that are facing financial constraints, unresolved overlapping land issues, and for companies that withdraw voluntarily. The deputy of operation control at BPMigas I Gde Pradnyana said the ESDM Ministry's request to add 50 oil and gas field areas per year needs to be supported to encourage more companies to find new oil and gas reserves in Indonesia.
"Currently, only 284 companies are looking for oil and gas. (The Head of BP Migas) Mr. Priyono has said repeatedly that he has asked for 500 working areas. He argues that we will find oil and gas reserves easily if more parties look for them," he said after being inaugurated at the BPMigas office yesterday.