Indonesia picks five winners in 2017 energy tender

(Adds details on 2018 tender)

By Wilda Asmarini

JAKARTA, Jan 31 (Reuters) - Indonesia's energy ministry

announced on Wednesday five winning bids in its 2017 oil and gas

block tender, including businesses owned by Premier Oil (LSE: PMO.L - news) ,

KrisEnergy (Frankfurt: A1W2TD - news) and Perusahaan Gas Negara (PGN).

Former OPEC member Indonesia was once self-sufficient in oil

and gas, but has been struggling for years to attract investment

and prevent output from declining further.

Jakarta recently introduced tax breaks and a gross split

mechanism to encourage investment in the energy sector by

eliminating conflicts over project costs and

reimbursements.

The ministry described the 2017 tender result as a "new era"

in the country's upstream oil and gas industry, but noted that

five of the conventional oil and gas blocks did not attract any

bids in 2017 and will be re-tendered this year.

The 2017 tender was opened in May and was extended four

times while waiting for new government regulation on the gross

split production sharing contract mechanism, the ministry said

in a statement.

Premier Oil said in a statement on the tender outcome that

it sees "the potential for significant gas volumes which, in the

success case, would be delivered to existing gas consumers in

North Sumatra."

Deputy Energy Minister Arcandra Tahar told reporters on

Wednesday he expects the 2018 bidding round to commence in

mid-February.

Data presented by the energy ministry to parliament last

week shows plans to tender 40 conventional oil and gas blocks

and 3 unconventional oil and gas blocks this year.

The table below shows the results of the 2017 tender.

Work Area Winner

- Direct offers* -

Andaman I Mubadala Petroleum (SE Asia) Ltd

Andaman II Consortium: Premier Oil Far East,

KrisEnergy (Andaman II) BV, Mubadala

Petroleum (Andaman II JSA) Ltd

Merak-Lampung PT Tansri Madjid Energi

Pekawai PT Saka Energi Sepinggan

West Yamdena PT Saka Energi Indonesia

South Tuna None

- Regular tender -

Kasuri III None

Tongkol None

East Tanimbar None

Memberamo None

The table below shows oil and gas blocks expected to be

tendered in the 2018 bidding round.

Conventional

1 Rupat Labuhan

2 South CPP

3 Nibung

4 Batu Gajah Dua

5 Bukit Barat

6 South Tuna

7 Tongkol

8 Banyumas

9 Ampuh

10 East Sepanjang-Kangean

11 Kasongam Sampit

12 Southwest Bengara

13 Suremana I

14 Manakarra Mamuju

15 South East Mandar

16 Karaeng

17 Ebuny

18 East Tanimbar

19 West Berau

20 Onin

21 Kasuri II

22 Kasuri III

23 West Kaimana

24 North Arguni

25 Mamberamo

Terminated in 2017**

26 Air Komering

27 East Sokang

28 East Muriah

29 North Kangean

30 Palangkaraya

31 West Sangata

32 Belayan

33 Southeast Mahakam

34 South Sageri

35 Halmahera-Kofiau

36 Southwest Bird's Head

37 Semai IV

38 West Papua III

39 Cendrawasih Bay II

40 Cendrawasih Bay III

Unconventional***

1 Shale gas Sumut Tenggara

2 Shale gas Jembar Rimba

3 Coal bed methane Sumbagsel

* Direct offer tenders are preceded by a joint study

process, in which oil and gas companies and the government work

together to develop seismic data for certain blocks. Companies

involved in the study gain rights to match bids once the blocks

are offered in the tender, discouraging other participants.

** Conventional oil and gas blocks where contracts were

terminated in 2017.

*** Unlike the conventional pools of oil and natural gas,

unconventional oil and natural gas do not flow naturally through

the rock, making them much more difficult to produce.

(Reporting by Wilda Asmarini; Writing by Fergus Jensen, Editing

by Sherry Jacob-Phillips)