The Ministry of Energy and Mineral Resources (ESDM) has announced the offering of Phase III Oil and Natural Gas Working Areas (WK Migas) for the year 2023. These three oil and gas blocks are all located in the Papua region.
Noor Arifin Muhammad, Director of Upstream Oil and Gas Business Development at the Ministry of ESDM, stated that they are proposing an increase in profit sharing. This means that after taxes, contractors will receive 50% of the proceeds for WKs with very high risks.
Furthermore, contract contractors (KKKS) are given flexibility in choosing between cost recovery or gross split contract schemes.
“This is aimed at instilling greater confidence in investors to invest in Indonesia,” Noor said at the 4th International Convention on Indonesian Upstream Oil and Gas Industry (ICIUOG) 2023 in Nusa Dua, Bali on Wednesday (20/9).
Blocks for auction
Noor explained that the oil and gas blocks being auctioned off are Akimeugah I, Akimeugah II, and Bobara work areas. Akimeugah I is located in the mainland of Papua, South Papua, and the Papua Mountains, with estimated oil and gas resources of approximately 15 billion barrels of oil equivalent (BBOE).
The government has set a minimum commitment of three years for G&G studies, 2D/3D seismic acquisitions, or the drilling of one exploration well for the oil and gas working area, which covers an area of 10,791.05 square kilometers.
Meanwhile, the auction of Akimeugah II work area covers the same oil and gas area, which is also located in the mainland of Papua, South Papua, and the Papua Mountains. This oil and gas working area is also estimated to have oil and gas resources of approximately 15 BBOE.
For this work area, the government has set a minimum commitment of three years for G&G studies, 2D/3D seismic acquisitions, or the drilling of one exploration well, which covers an area of 12,987.68 square kilometers.
Noor explained that WK Akimeugah I and Akimeugah II are part of the Warim working area region, without including conservation forest areas and Lorentz National Park. “We want to convey that Indonesia still has abundant oil and gas resources to meet national energy needs,” Noor said.
Bobara working area
As for WK Bobara, it is located off the coast of West Papua, with estimated oil and gas resources of approximately 6.8 billion barrels of oil equivalent (BBOE). The Ministry of ESDM has set a minimum commitment of three years for G&G studies, 3D seismic of 750 KM for this WK Migas, which covers an area of 8,444.49 square kilometers.
Furthermore, the government is offering flexibility for KKKS to choose profit-sharing contract schemes for these three auctioned WKs, with a cost recovery mechanism of 55:45 for oil and 50:50 for gas. Meanwhile, gross split profit-sharing is set at 57:43 for oil and 52:48 for gas.
“We want to emphasize that Indonesia still has ample oil and gas resources to meet national energy needs. The oil and gas business investment is still very attractive. Therefore, we invite all of you to come and invest in Indonesia,” he said.