HIGHLIGHTS OF UPSTREAM GOI POLICIES CURRENT OIL & GAS BIDDING ROUND Presented in AAPG International Pavillion RIO DE JANEIRO, BRAZIL, NOVEMBER 2009 DIRECTORATE GENERAL OF OIL AND GAS 1

WHERE IS INDONESIA Indonesia - Total 1,904,569 km2 Source: WorldAtlas.com & Wikipedia

Directorate General of Oil & Gas MINISTRY OF ENERGY AND MINERAL RESOURCES Directorate General of Oil & Gas Directorate of Upstream Business New Oil & Gas Acreage Management Exploration Plan of Oil & Gas Development Production Gas Utilization & CBM (Coal Bed Methane)

HYDROCARBON BASIN (TERTIARY SEDIMENT BASIN) 4

OIL & GAS CONTRACTS TOTAL CONTRACT : 190 PSC PSC Exploration : 126 PSC PSC POD in process : 13 PSC - PSC Production : 51 PSC

GOI’s POLICY IN THE BIDDING ROUND MEMR Regulation No.35/2008 Policy of the offering of working acreage is implemented through Regular Tender and Direct Proposal Tender Regular Tender  We come to investor, promoting blocks Direct Proposal Tender  Investor comes to MIGAS, and choose the block Cooperation agreement will be Production Sharing Contract - Exploration period : 6 years + 4 years (additional) - 30 years contract

DIRECT PROPOSAL TENDER REGULAR TENDER Working acreage are prepared by MIGAS Held periodically, 2 times in a year DIRECT PROPOSAL TENDER Working acreage are freely nominated and proposed by investors MIGAS and investors conduct joint study (approx. 8 months) Joint study includes the study of hydrocarbon potential of the area (acquiring new data, data reprocessing, etc), cost and risk will be borne to company Area of joint study will be opened/announced for tender, it means that the area of joint study is not directly awarded to the company who conduct joint study Company who conduct joint study will has a right to match with the highest bids

Getting The Data Availability Information Visit DAVAL (Data Availability Online) which covers GIS View of Exploration Data Information (Seismic, Well, Geo-Report/Map) and is accessible online through www.patranusa.com Arrange Data Corner at our sites which are available to adequate the needs to review data quality for your Selected Data (terms & condition applied) Rental Room Services which has been provided for having more private and convenience time and place of Data Review (terms & condition applied) Directly contact Business Center Unit for further assistance

BIDDING PROCESS IN GENERAL OBLIGATION TO SUBMMIT “BID BOND” ANNOUNCEMENT ACESS BID DOCUMENT ACESS DATA PACKAGE BID EVALUATION BIDDING AWARD CONTRACT SIGNING INITIAL PSC CLARIFICATION FORUM BID SUBMISSION OBLIGATION TO SUBMMIT “BID BOND” - At once bid is submitted, - The value is 100% of the signature bonus commitment - To guarantee that the winning bidder will sign the PSC and pay bonus, OBLIGATION TO SUBMMIT “PERFORMANCE BOND” - At once PSC is signed, - The value of this bond is 10 % of firm commitment

BID EVALUATION Technical evaluation / EXPLORATION COMMITMENT (Mostly Weighted) - Seismic Survey Commitment - Well Commitment, - G&G Study Financial Evaluation (Second Weighted) - Signature Bonus - Financial capability Performance Evaluation (Third Weighted) - Experiences in the oil and gas business - Compliance with provision and regulation of oil and gas law

2ND OIL & GAS BIDDING ROUND 2009 (21 BLOCKS RELEASE IN END OF NOVEMBER 2009)

frontier area deep water MANDAR SEMAI V PASANGKAYU SEMAI II SE MAHAKAM NE MADURA III TUNA MAKASAR STRAIT NATUNA OFF-ON EAST KALIMANTAN CENTRAL- SOUTH –NORTH SUMATRA OFF –NORTH JAVA OFF – EAST JAVA EAST frontier area deep water

THANK YOU www.migas.esdm.go.id

OIL RESERVES OIL RESERVES (MMSTB) (AS OF JANUARY 1ST, 2008) 113.34 852.48 596.81 414.03 765.75 60.83 913.09 PAPUA OIL RESERVES (MMSTB) NATUNA MALUKU PROVEN = 3,747.50 MMSTB POTENTIAL = 4,471.72 MMSTB TOTAL = 8,219.22 MMSTB 136.71 58.02 144.42 NAD SUMATERA UTARA SUMATERA TENGAH SUMATERA SELATAN JAWA TIMUR JAWA BARAT SULAWESI KALIMANTAN 4,163.75

GAS RESERVES GAS RESERVES (TSCF) (AS OF JANUARY 1, 2008) NAD 6.30 1.27 3.18 8.15 4.16 52.59 24.96 24.21 5.08 PAPUA GAS RESERVES (TSCF) NATUNA PROVEN = 112.47 TSCF POTENTIAL = 57.60 TSCF TOTAL = 170.07 TSCF 5.72 SUMETERA TENGAH SUMATERA SELATAN SUMATERA UTARA JAWA TIMUR KALIMANTAN TIMUR JAWA BARAT SULAWESI MALUKU 13.65 28.00 ACEH (NAD) GAS RESERVES (AS OF JANUARY 1, 2008)

OIL & GAS CONTRACTS TOTAL CONTRACT : 190 PSC PSC Exploration : 126 PSC PSC POD in process : 13 PSC - PSC Production : 51 PSC

REQUIREMENT OF DIRECT PROPOSAL : Investor’s proposal shall be completed with the following document: Poposed open area or available blok must be proposed with a grid code and not more than 8 (eight) grid (approx 5,000 km2); Short geological report of potensial oil and gas (exploration history, data acces that represent in the propose area, geology regional, petroleum system, and exploration concept) Profiles of the Business Entity or Permanent Establishment; Business Entity or Permanent Establishment activities Last 3 (three) years financial report Confirmation letter from prime bank in Jakarta, confirming that new Business Entity or Permanent Establishment has ability to financing Joint Study Human Resources experience in oil and gas activities A Statement letter affirming of the Business Entity or Permanent Establishment to provide Performance Bond (US$ 1 MM) for Joint study; Work Program and schedule of Joint Study

Total of CBM Basins = 11 (Advance Resources International, Inc., 2003) This figure shows us the Coalbed Methane Resources in Indonesia. The largest CBM Resources are located in South Sumatera, East Kalimantan, and South Kalimantan. Total CBM resources is about 453.3 TCF Total of CBM Basins = 11 (Advance Resources International, Inc., 2003)