The two cost recovery production sharing contracts are exploration contracts with a term of 30 years with a production sharing split of 60:40 for oil and 55:45 for gas.
Jakarta (ANTARA) - The Energy and Mineral Resources Ministry has approved cooperation contracts for two oil and gas blocks in Aceh waters.

Energy and Mineral Resources Minister Arifin Tasrif witnessed the signing of the contracts for the Offshore North West Aceh (Meulaboh) Work Area and the Offshore South West Aceh (Singkil) Work Area.

"Prior to today's contract signing, the contractor has completed all administrative and financial obligations, those being a signature bonus and submitting implementation guarantees in accordance with the applicable regulations," director general of oil and gas at the Energy and Mineral Resources Ministry, Tutuka Ariadji, said here on Thursday.

The two contracts are the result of the first phase of direct bidding auctions in the July to September 2022 period, he added.

The production sharing contract for the Offshore North West Aceh (Meulaboh) Work Area off the coast of Aceh has been signed with ONWA Pte Ltd as the contractor, and the production sharing contract for the Offshore South West Aceh (Singkil) Work Area situated off the coast of Aceh has been inked with OSWA Pte Ltd as the contractor.

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The contracts cover exploration in the form of a G&G study, acquisition of three-dimensional seismic data covering an area of 500 square kilometers, and one exploration well with US$15 million of total investment, and a signature bonus of US$50 thousand.

"The two cost recovery production sharing contracts are exploration contracts with a term of 30 years with a production sharing split of 60:40 for oil and 55:45 for gas," he informed.

"Overall, the total investment commitment for exploration from the signing of the production sharing contract for the work area amounts to US$30 million, with a signature bonus of US$100 thousand," he added.

The Offshore North West Aceh (Meulaboh) Work Area has potential reserves of 800 million barrels of oil and up to 4.8 trillion cubic feet of natural gas. The South West Aceh (Singkil) Offshore Work Area has potential reserves of 1.4 billion barrels of oil and 8.6 trillion cubic feet of natural gas.

Acting governor of Aceh, Achmad Marzuki, said that his administration fully supports the exploration activities. They are expected to bring good results for the Aceh government and the people of Aceh, in particular, he added.

"We expect that in the future, there will be many other activities from the Energy and Mineral Resources Ministry in our place, so that Aceh province will become more developed and more prosperous," Marzuki said.

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Translator: Sugiharto Purnama, Mecca Yumna
Editor: Yuni Arisandy Sinaga
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