Indonesia’s energy ministry on Monday said none of the eight oil and gas blocks put up for tender last year has attracted a winning bidder.
According to Jakarta Post, a local newspaper, companies were given a lengthy four-month deadline to register an offer. The lack of bids was emphasized by the fact that the government increased the revenue proportion for contractors by 35 percent for oil and by 40 percent from gas, from 15 and 30 percent, respectively, the newspaper said.
Although two companies expressed interest for two blocks namely Oti block and Kasuri II block, their offers were below the minimum amount required. A similar situation was witnessed in 2014 as well when 10 out of 21 oil and gas blocks put up for auction failed to find new contractors, Jakarta Post added.
Officials have cited low oil prices as the reason for lack of interest. The blocks that failed to illicit interest will be put up for auction again this year along with 11 other blocks. This year, the government will offer open bid split schemes in which potential investors can propose their own economically feasible revenue split, conducive to their current situation.
Indonesia has been struggling to maintain domestic oil and gas production from ageing fields amid rising local demand. Many experts believed the country will become a gas importer by the end of this decade from being an exporter.
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