BP's Tangguh Project, West Papua

BP is eying a new oil and gas exploration area in Indonesia's West Papua province near Tangguh to boost reserves, an official at the Indonesia energy ministry said. 'BP has an intention to explore oil and gas in a new area in Western Papua and it has submitted its request. We welcome their intention and we are now studying their proposal,' Edy Hermantoro, a director at the ministry, told Reuters. An official of BP's Indonesia unit confirmed the company intended to expand its area in West Papua but gave no further details.

BP Indonesia is the operator of the Wiriagar, Muturi and Berau blocks in West Papua, which together have combined reserves of 14.4 trillion cubic feet (tcf) of gas. Another Indonesian energy ministry official, who declined to be identified, said proven plus probable and possible reserves in West Papua's Tangguh were estimated at around 23 trillion cubic feet of gas.

In December last year, Indonesia offered a new tender for 24 oil and gas blocks as part of efforts to boost investment and lift dwindling production. The areas include blocks in West Berau, offshore of Bintuni, West Papua. This area is near to BP Indonesia's current operation.

In Indonesia's most recent tender, which was for 31 oil and gas blocks, six blocks were awarded to foreign and local companies including Canadian oil firm Talisman Energy and Canadian company Niko Resources. The remaining blocks received no expressions of interest from investors. Indonesia has said it will offer new incentives to oil and gas investors, including more favourable tax treatment and production splits, in order to encourage exploration and stem a steady decline in production. But industry players have said the incentives are not enough.

Indonesia's proven and potential oil reserves have dropped to 8.3 billion barrels, from 9.6 billion barrels in 2001.

Indonesia 2010 tender / direct offer

In the latest tender, Indonesia's government is offering 24 new oil and gas blocks. Twelve blocks will be allocated via regular tenders and the remaining 12 are open to direct offers.

The blocks investors can bid for in regular tenders are the South East Andaman, Tarakan I, Tarakan II, Tarakan III, North Masela, West Berau, Cendrawasih Bay I, Cendrawasih Bay II, Cendrawasih Bay III, Cendrawasih Bay IV, Cendrawasih Bay V and East Aru. Those available for direct offers are Puri, Sakakemang, Selar, Sunda Strait I, North Madura, Karapan, Mandala, Long Hubung-Long Bagun, Malunda, Sadang, South Mandar and South Sageri said.

Investors can obtain documents for the blocks to be offered in tenders from December 15 - April 13. Bids must be submitted by April 14. Documents for the blocks open to direct offers will be available from December 15 - January 28. Investors must submit their bids for these blocks by Jan. 29. Further information is available at www.bpmigas.com/english/default.asp 

Source: Newswires