OPINION: Indonesia has unveiled its first licensing round of 2022, offering five exploration and one exploitation blocks with all bids due back before the end of the year.
An upbeat Ministry of Minerals & Energy Resources’ Director General of Oil & Gas, Tutuka Ariadji, confirmed that the acreage on offer is being made available with “more attractive terms and conditions”.
Four of the blocks are offered under the cost recovery production sharing contract model, with the Bengara 1 and South Makassar blocks available either as cost recovery or gross split PSCs.
For these gross split PSCs, the base split before tax at the beginning of contract term would be 43% for oil and 48% for gas for contractors (operators).
However, at the Plan of Development stage, additional variable splits will be awarded.
These will be based on factors including the field location, reservoir depth, nearby infrastructure, reservoir type, reservoir depth, local content and prevailing oil and gas prices.
All of the six blocks on offer have seen historic drilling activity with 28 wells sunk on the Arakundo working area alone.
Each of the six blocks has also had 2D seismic acquired and, in some cases, 3D seismic too — so there are data aplenty for prospective bidders.
The Indonesian government has ambitious plans to boost production from the former Opec member nation to 1 million barrels per day of liquids and 12 billion cubic feet per day of gas by 2030.
Only time will tell if the government is pulling out the stops or simply clutching at straws with its latest acreage offering.
(This is an Upstream opinion article.)