The Ministry of Energy and Mineral Resources (ESDM) has announced the auction of six oil and gas working areas (WK Migas) under phase II of 2024, five of which are offered through direct bidding and the one remaining via regular auction.
Acting Director General of Oil and Gas at the ESDM ministry, Dadan Kusdiana, said that the cumulativepotential of the six working areas − Air Komering in South Sumatra, Serpang in East Java, Kojo in Makassar Strait, Binaiya in Maluku, and Gaea, and Gaea II, both in West Papua − is estimated at around 48 billion barrels of oil equivalent (BOE).
This offer increases the number of WKs auctioned by the government to a total of 11 WKs this year.
“The Indonesian government remains committed to supporting upstream oil and gas activities in the country by improving the management of oil and gas businesses,” Dadan told the SKK Migas Media Briefing held in Jakarta on Tuesday, December 3, 2024.
Access to bidding documents for the second phase of the auction has been opened since December 3, 2024. The deadline for submitting bidding documents for the regular auction is set until April 10, 2025, while for direct bidding auction until January 17, 2025.
Dadan said the government invited investors and oil and gas companies that have the ability and commitment to meet the requirements to participate in this auction.
New incentives
The government is offering several attractive incentives in this auction, including increasing profit sharing (split) and reducing the signature bonus requirements.
“The profit sharing for offered contractors is at 45-50 percent, a significant increase compared to the previous 15-30 percent,” Dadan said.
In addition, the signing bonus requirement is also lower, ranging from US$200,000 to US$300,000, compared to the previous period of US$300,000 to US$400,000.
“This incentive is given so that activities in the upstream oil and gas sector can move faster and have a greater impact on the national economy,” he said.
“With this measure, the government hopes to attract global investors to contribute to oil and gas exploration and development in Indonesia, while strengthening the national energy sector,” Dadan concluded.
