BUSINESS

Government Tries to Lure Oil, Gas Contractors Over Breakfast

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Energy and Mineral Resources Minister Ignasius Jonan (left) and his deputy, Arcandra Tahar (right), attend a hearing at the House of Representatives. (Antara/Agung Rajasa)

In 2015, the government found no suitable winners during the auction of 11 oil and gas blocks. A year later, it chose only one winner for 17 blocks offered.

Energy and Mineral Resources Minister Ignasius Jonan (left) and his deputy, Arcandra Tahar (right), attend a hearing at the House of Representatives. (Antara/Agung Rajasa)

 

The Energy and Mineral Resources Ministry held for the first time a breakfast meeting on Friday with 52 oil and gas firms in order to lure them to join the auction for 15 working areas amid sluggish investment in the upstream sector.

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Ten conventional and five unconventional working areas are offered through the first bidding round, which started on May 29. The government claims that, as of today, 12 investors have accessed the bid document.

Bids under the direct proposal mechanism are accepted until July 12, while bids for the regular tender can be submitted until Sept. 25.

“Last year, many investors were interested in joining the tender, but eventually there were [almost] no winners. This year, we have changed our approach to be more proactive,” Deputy Energy and Mineral Resources Minister Arcandra Tahar said at his office in Jakarta on Friday.

In 2015, the government found no suitable winners during the auction of 11 oil and gas blocks. A year later, it chose only one winner for 17 blocks offered.

The situation contrasts starkly with the 2012-2014 period, when there were 89 winners in the auction of a total of 50 blocks.

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“We have been drafting a new government regulation [PP] on the tax treatment of contractors working under the gross split scheme,” Arcandra said.

“This new regulation has long been awaited by contractors that are interested in the offered blocks, so it is crucial.” (bbn, Viriya P. Singgih, The Jakarta Post)

 

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