Jakarta will have few bidders for oil and gas blocks

Subject

Indonesia's upstream oil and gas industry.

Significance

Indonesia late last month opened a tender for five oil and gas blocks, two of which are already producing, with the bidding round to end on April 25. The blocks will be operated under gross-split contracts, whereby contractors bear operating costs in return for a fixed share of a well’s future production.

Impacts

• A win for incumbent Joko ‘Jokowi’ Widodo in the April 17 presidential election might persuade some prospective bidders of policy continuity.
• Indonesia will probably become the world’s top oil importer this year.
• The state oil and gas firm Pertamina will likely seek a partner to help it run the Rokan block from 2021.