The Indonesian government plans to offer six oil and gas blocks before the end of the year as part of its efforts to revive the country's dwindling output, a senior official said Wednesday.
"We will ask permission from the new energy and mines minister first. After securing his approval, we will offer the blocks soon," said Naryanto Wagimin, program director at the energy ministry's oil and gas directorate general.
Four of the blocks will be offered through direct tender, with the remaining two offered through regular tender, he said. The blocks include offshore and onshore areas.
"We have to increase our exploration activities to increase the production," Wagimin said. "Without any exploration it is impossible we can increase our production in the future."
Indonesia has two mechanism of block tender. Under the regular bidding system, the government would offer the blocks and interested companies would submit their proposals.
Under the direct offer mechanism, any company that was not offered under regular bidding may express interest to the government. The government would then offer the block to other investors. The first company would automatically get the block if it draws no other bidders or if other bids are lower.
Indonesia is making a concerted effort to ramp up exploration and development activity in the country as it has seen its crude output fall because of natural decline at aging fields. The country pulled out of OPEC in 2008.
Indonesia's proven reserves stand at 3.7 billion barrels of oil and 101.54 Tcf of gas. The country is estimated to contain 574 Tcf of potential shale gas, compared with 453.3 Tcf of coalbed methane potential and 334.5 Tcf of gas potential, respectively, according to energy ministry data.
