Friday, 19 July 2019 | 04:36 WIB

Gov’t Set Three Criteria on Deciding Oil-Gas Work Area Bidding Winner

Deputy Minister of Energy Arcandra Tahar (left) (kemenesdm)

JAKARTA, NNC - Arcandra Tahar, Deputy Minister of Energy and Mineral Resources, says the Indonesian government has set three main criteria in determining the winning bidder of the Phase II Year 2018 Oil and Gas Work Area . The three criteria are fulfilling the requirements and conditions of auction, financial health and company track record .

"What we see is whether their offer is in accordance with the terms and conditions that we have set before, such as the Definite Work Commitment. There is an indication of what they input, on average more than IDR1 trillion," Arcandra said on Monday (10/22).

He continued that the government has carried out an in-depth evaluation of the proposed proposals submitted by auction enthusiasts. "Their proposal is interesting enough to not be attractive to the Government so that the oil and gas blocks can be further developed," Arcandra explained.

Furthermore, another criterion taken by the Ministry of Energy and Mineral Resources is the financial health of companies that follow the auction process. That way, the company is able to finance and carry out petroleum operations, "There would not be any financial problem," he said.

The last consideration that is no less important is a good track record in petroleum activities. "The company must be truly engaged in the oil and gas sector," Arcandra added.

Of the two work areas that were sold, the government obtained a Total Signature Bonus of US$ 5,500,000, and a Definite Commitment of US$ 64,000,000 which included G&G activities of US$ 1,000,000, Seismic 2D Survey of 300 km, Seismic 3D 400 km2 and drilling four wells.

Meanwhile, four work areas, namely Makassar Strait, Panjang Strait, Andika Bumi Kita and South East Kalimantan who do not have winners will be auctioned again next week. "For blocks that do not sell, there is a possibility that we will enter the auction stage. the next one will open next week, "he explained.

The government also gave an opportunity to return to the company that had participated in the Phase II Conventional Oil and Gas WK auction but failed to become a winner. "We are opening companies that if interested in re-bidding (re-bidding) to the WK that is set today that has no winner. They are allowed (to join again)," concluded Arcandra.

In addition, the Government has other options by offering oil and gas work areas with no declared winners to state-owned energy company Pertamina. "Pertamina has spoken of its interest in conducting a joint study, we will see it later," said Director of Oil and Gas Djoko Siswanto.