Multinational Companies are Ready to Participate in Phase I of the Oil and Gas WK Auction in 2022

JAKARTADAILY.ID – A number of multinational companies are reportedly interested in participating in the auction of six Indonesian oil and gas working areas (WK) in the first phase of bidding in 2022. The WK is offered through a joint study and regular auction mechanism.

"The direct offer/joint study auction is a multinational company (as a participant). We will announce it around September," said Director General of Oil and Gas, Ministry of Energy, Tutuka Ariadji in a report from the official website of the Ministry of Energy and Mineral Resources, Friday, July 22, 2022.

In phase I of the oil and gas WK bidding, the Government auctioned 3 WK through direct bidding, namely the Bawean WK, and two exploration CAs, namely the North West Aceh (Meulaboh) Offshore WK, and the South West Aceh (Singkil) Offshore WK.

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Bidders can access the Bawean WK bid document starting on July 20, 2022, until August 19, 2022, and the deadline for submitting participation documents is August 23, 2022.

As for WK Offshore North West Aceh (Meulaboh) and WK Offshore South West Aceh (Singkil), bid document access starts from July 20, 2022, to September 2, 2022. Meanwhile, the deadline for submitting participation documents is September 6, 2022.

Tutuka said, in order to attract more investors, the Government has also changed the terms and conditions including improving the Contractor's profit split by considering the WK risk factors, Signature Bonus is open to bargaining, FTP to 10 percent shareable, application of 100 percent DMO price during the contract, providing flexibility in the form contract (PSC Cost Recovery or PSC Gross Split).

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Additionally, new provisions for relinquishment (no refund of part of the area in the 3rd year of the contract), ease of data access through the Migas Data Repository (MDR) membership mechanism, and the provision of incentives and tax facilities according to applicable regulations.

"We will change the (terms and conditions) to make it more attractive. As for taxes, we will open a discussion later," he added.

Regarding these changes, he continued, there are already positive signals. However, the Government remains open to discussions so that more investors are interested in investing in Indonesia.

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