IAGO Wins Offshore Oil Exploration Block In Indonesia

Online, July 17, 2012 (Newswire.com) - Canadian oil and gas exploration giant IAGO Limited, has won a bid for a key oil and gas exploration block in the second day of Indonesia's first International auction round of 2012. The block IAGO won covers about 3,600 sq. km and is located about 125 km north-west of the Bontang LNG processing facility.

The second day of bidding followed a sluggish start to the auction on Wednesday when only one block was taken by Italian oil and gas exploration company ENI, four other blocks got no bids and another deal failed after companies rejected the government offer. Bidding at the auction was decided according to the remuneration fees offered, with the lowest bids winning blocks.

Oil and gas exploration companies who won blocks will immediately be able to extract oil and gas discovered at their sites, but the Indonesian government has retained the option to pay compensation to companies to keep crude in the ground to help boost its reserves.

Indonesian government is hoping that, this auction would spur the expansion of the energy sector of country and also declared that it would shortly open a second round auction with more new oil and gas exploration blocks.

According to the deal, IAGO will be the operator with 90% interest in this block and the Indonesian government has a 10% interest, prior to designation of any commercial discovery. The exploration procedure will include a full 3D seismic survey of the whole area and the drilling of one well. IAGO hopes to complete it within the next three years.

IAGO Limited is heavily involved in the exploration and development of commercial oil and gas projects with a direct focus on offshore and deep water drilling projects. The global economy is always changing, but demand for oil and gas is ever increasing. World economic events over the last few years have dramatically increased the price of oil and gas. Many areas of exploration and production that were once considered too expensive are now accessible for company project expansion due to technological advances.