Publications

Exploration projects are the only way to increase oil and gas reserve and production for Indonesia and have not however shown a progressive trend in the last decade, even though some fiscal incentives and new regulations have been introduced to support such projects. The phenomenon of fallow assets has therefore occurred in many of these exploration blocks. To define this further, a fallow asset is classified as a fallow block and a fallow discovery is an asset which has no activity for a certain period of time, i.e. no seismic or drilling activity. Another report published by the Ministry of Energy and Mineral Resources (EMR) regarding analysis and evaluation of data packages in the offering process of oil and gas fields (2014) mentioned that the current trend has shown a deteriorating interest of oil and gas companies to bid for the fields offered by the government. The government report investigated some technical and non-technical aspects that should be included in the governmental tender document. This paper will describe the profile of exploration projects and some relevant key information of oil and gas exploration blocks under production sharing contract (PSC) terms in Indonesia. Furthermore, the exploration commitment and its realised activity will be analysed. Finally, some recommendations are proposed to balance the interests between government and investors (companies) in order to attract more investment in exploration projects in Indonesia. Keywords: bidding process, exploration, fallow asset, PSC