EWC is at the bottom of this article in bold print.

They may not have the $10M for the upfront payment of the bonus!

New Contract 3 Block Termination 2022 at the End of this Month

November

22

/ 2018

21:02 WIB

By:Dewi Aminatuz Zuhriyah

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Illustration of an offshore refinery. - Bloomberg / Rue Team

Bisnis.com , JAKARTA - The Ministry of Energy and Mineral Resources will sign a contract for three termination blocks that expire in 2022 at the end of November 2018.

Djoko Siswanto, Director General of Oil and Gas, said the agreement would be made if the three-block contractor was to carry out its obligations, namely paying a signature bonus. "[PSC signatures for termination blocks] hopefully [done] later this month," he said, Wednesday (11/21).

The three termination blocks are Coastal Plains and Pekanbaru (CPP), Tarakan and Tungkal whose contracts expire in 2022. "Depends on the payment of the bonus bonus . Medco on November 27 will only pay. The other plan is to pay for the end of the month. "

Djoko hopes that if the process is completed, the three block contracts can be signed later this month."Hopefully later this month."

For information, the Ministry of Energy and Mineral Resources announces three managers of 2022 termination of Oil and Gas WK, namely the Tarakan Block, Blok Coastal Plain and Pekanbaru and Blok Tungkal. The three oil and gas WKs are returned to the existing operators to be managed for the next 20 years.

Especially for the Coastal Plain and Pekanbaru Blocks, 100% of the participation rights are held by PT Bumi Siak Pusako. In fact, currently Pertamina Hulu Energi still holds a 50% participating interest in the block.

At that time, Deputy Minister of ESDM Arcandra Tahar said, currently there are only three winners announced for the 2022 termination WK. "For today there are only 3 blocks. For 100% CPP for PT Bumi Siak Pusako," he said.

For the management of the CPP Block, PT Bumi Siak Pusako will deposit a signature bonus worth US $ 10 million and work commitments must be US $ 130.41 million. PT Medco E and P Tarakan as the owner of the management rights of the Tarakan Block will deposit a signature bonus worth US $ 1.5 million and KPP worth US $ 35.5 million.

Finally, for Blok Tungkal, Montd'or Oil Tungkal with 70% participation rights and 30% Fuel-X Tungkal Ltd will pay a signature bonus worth US $ 2.45 million and KPP worth US $ 13.23 million.

Later, for the Tarakan and Tungkal Blocks, 10% participation rights are given to BUMD, while the CPP which is actually managed by BUMD does not need to share participation rights for regional business entities.

Meanwhile, at the same opportunity, the ESDM Ministry has not yet decided on the management of the Sengkang Block which will be terminated in 2022. 
In this case, Arcandra refused to comment much on the status of government studies for the Sengkang Block.

In fact, on August 31, Arcandra said that the fate of the blocks in South Sulawesi would be re-managed by Energy Equity Epic (Sengkang) Pty Ltd for 20 years after the contract period expired in 2022.

This extension was decided because no other contractor had submitted a proposal for the management of the block. With the extension of the Sengkang Block, the country received a signature bonus worth US $ 10 million and a Definite Work Commitment (KKP) of US $ 60 million.

"One clear, namely, Energy Equity Epic in the Sengkang Block, was given to Sengkang, existing or existing operators with KKP of US $ 60 million and a signature bonus of US $ 10 million," he said at that time.

For now the Sengkang Block has a working area of 2,925.23 km with a contract period up to 24 October 2022. EPIC (Sengkang) Energy Equity Pty. Ltd. has proven gas reserves of 800 BCF (billion cubic feet) and has 2 TCF (trillion cubic feet) of resources.

The average production of the Sengkang Block gas period from January to July 2018 is around 32 mmscfd. As an illustration, 1 mmscfd of gas can be used as fuel for a 4 MW power plant, so 32 mmscfd can be analogous to the equivalent of 128 MW of electricity generation.