ESDM Auction 12 Oil and Gas Blocks in 2020

The Ministry of Energy and Mineral Resources (ESDM) plans to bid or auction 12 oil and gas blocks in 2020. Director of Upstream Business Development Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources Mustafid Gunawan said there were 10 conventional oil and gas blocks and two non-conventional blocks to be offered.

"This year the auction for oil and gas WK Working Areas has a conventional target of 10, and has been prepared for the scheme, judging from the technical side of whether cost recovery or gross split," he said.

Mustafid explained that in the first quarter of 2020, he would explain which 10 conventional WKs were offered. Meanwhile, oil and gas working areas Non-conventional, according to Mustafid, have not been offered for a long time.

West Ganal Block By ENI

Last year, 3 new working areas were signed, namely Anambas, Selat Panjang, and West Ganal. The government gets a signature bonus of US $ 37.6 million and a definite commitment of US $ 268.5 million. In addition, a contract to extend/manage 5 oil and gas blocks was signed. The total work commitment is definitely US $ 855.38 million and the signature bonus is US $ 1.04 billion.

In order to make investment in upstream oil and gas more attractive, Mustafid claims the government has taken various steps, namely by opening oil and gas data that can be accessed online, as stated in Minister of Energy and Mineral Resources Regulation (Minister of Energy and Mineral Resources Regulation) No. 7 of 2019 regarding Management and Utilization of Oil Data and natural gas.

The opening of the oil and gas data so far is still in a 6 month transition period. According to him, so far a discussion on the amount of membership fees, where investors who are members can access all data.

"We are in the transition period from the enactment of the Ministerial Regulation, so it will be around March [officially enacted]. We hope that as soon as it has been resolved many investors will ask for it, "he added.

On the other hand, Acting Director-General of Oil and Gas at the Ministry of Energy and Mineral Resources, Djoko Siswanto, confirmed that two contract schemes will be offered in the oil and gas block auction this year to avoid polemics between Cooperation Contract Contractors (KKKS). Joko said that cost recovery still dominated as many as 200 contracts, while gross split was only around 45 contracts.

"If the cost recovery is definitely split, the government will be greater because the government will share the costs. If it is a gross split, the portion of the government is small because it is the contractor, "he said.

Arifin Tasrif

Previously, ESDM Minister Arifin Tasrif ensured that the oil and gas Working Area auction would use the selection of two oil and gas contract schemes.

"We can use two oil and gas contract schemes, but we are changing the cost recovery first. We justified the less fitting, "he said.

Bisnis Indonesia, Page-20, Thursday, Jan 16, 2020