Ministry Of Energy And Mineral Resources Sets Deadline For Contractors To Develop Scaled Oil And Gas Blocks

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) has asked Migas Cooperation Contract Contractors (KKKS) to immediately seek a potential oil and gas working area that is not being worked on (idle) or return it.

This is in accordance with the Decree of the Minister of Energy and Mineral Resources concerning Guidelines for Returning the Potential Working Area which is Not Encouraged in the Context of Optimizing Oil and Gas Production.

The potential oil and gas section (WK) criteria that are idle include production fields that have not been produced for 2 consecutive years, or there are fields with plans of development (POD) other than the 1st POD that have not been carried out for 2 consecutive years.

In addition, if there is a structure in the exploitation WK that has received a disclosure status and has not been carried out for 3 consecutive years.

Against the potential oil and gas working area (WK) but idle, efforts need to be made, it cannot continue to be silenced. Currently being inventoried and optimization efforts are being taken immediately. There are at least 4 optimization efforts that can be carried out later," said Director of Upstream Oil and Gas Business Development Ariana Soemanto, quoted Monday, July 8.

First, the KKKS is asked to immediately work on the idle potential WK section.

"In the event that economic improvement is needed, it can be submitted to the Ministry of Energy and Mineral Resources through SKK Migas or the Aceh Oil and Gas Management Agency (BPMA)," added Ariana.

Second, the KKKS is working on the idle potential WK section through collaboration with other Business Entities for the application of certain technology in a business manner.

Third, the KKKS proposes the idle potential WK Section to be further managed by other KKKS in accordance with the provisions of the legislation.

Fourth, the KKKS returned the idle potential WK Section to the Minister of Energy and Mineral Resources, taking into account post-operational obligations, the obligation to return upstream oil and gas data, and other obligations, to be subsequently determined and offered to become a new WK in accordance with the provisions of the legislation. The four efforts are in accordance with the evaluation, plan and timeframe recommended by SKK Migas or the Aceh Oil and Gas Management Agency (BPMA).

As is known, the Government continues to actively encourage increased exploration and oil and gas production. Oil and gas block auctions are made more attractive by improving contract terms, including that contractor yield sharing can reach 50 percent, previously only around 15-30 percent. In addition, the Government can also provide upstream oil and gas incentives in order to support the economy of contractors.